JEFFERSON CITY, Mo. – As new corporate tax cuts roll into effect, many have been wondering what impact it might have for Missourians.
Utility companies are expected to save millions due to the corporate tax rates being cut under the tax reform signed into effect by President Donald Trump.
As the Missouri Legislature continues debating over bills that would enact a number of utility reform measures, including rate caps and rate adjustment mechanisms, one of the major caveats in the proposed utility legislation would enact a quick return to customers from the new tax savings.
The question, however, is how much could be returned? Several experts and analysts have estimated that it could be in the range of two to four percent in terms of reduction.
But a motion filed by Ameren Missouri before the Missouri Public Service Commission on March 26th shows that the number could lean to the higher side of the spectrum.
The filings, which are now being made public, show that the federal tax cut has resulted in approximately $133 million in savings to the company.
If that amount were refunded to customers, as is laid out in the two utility reform proposals, HB 2265 and SB 564, then it would result in a 4.86 percent rate cut to customers.
There is some fluctuation in the numbers based on the factors, as seen in the document below, but all of the possible rate outcomes in those scenarios result in at least 4.6 percent in cuts.
Under the two proposed bills, the companies would return the proceeds of the federal tax cut to the customers within 90 days of the legislation being signed into law.
Missouri electric rates have risen by an average of five percent annually over the past decade, but if passed, these two bills would not only refund hundreds of millions of dollars but would also place rate cap increases on companies.
So where are those bills at now? The Senate version, SB 564, is currently waiting in the Missouri House of Representatives, being held over until the Senate takes another crack at the proposed utility legislation by working on the House version, which began as an identical bill to the Senate one.
HB 2265 was heard in committee in late March, and now just needs to pass out of committee before heading to the Senate floor for perfection.
Benjamin Peters is a reporter for the Missouri Times and Missouri Times Magazine, and also produces the #MoLeg Podcast. He joined the Missouri Times in 2016 after working as a sports editor and TV news producer in mid-Missouri. Benjamin is a graduate of Missouri State University in Springfield. To contact Benjamin, email firstname.lastname@example.org or follow him on Twitter @BenjaminDPeters.