Texas gas utility regulators, taking a cue from some business leaders in sectors ranging from retail to air travel, say they’ll attempt to ensure that benefits of the federal government’s recent corporate tax cuts are passed on to regular people.
“We will look at the effect on gas rates to guarantee companies share their savings with their customers, allowing Texans to keep more of their paycheck as (the new tax law) intended,” said Christi Craddick, who chairs the Railroad Commission of Texas. The commission regulates gas utility rates in the state.
A number of major companies — including Southwest Airlines, Apple and Walmart — have opted to award one-time bonuses to their employees in the wake of the $1.5 trillion, GOP-backed tax overhaul that President Donald Trump signed into law last month. Detroit-based DTE Energy also announced Tuesday that it is lowering electric and gas utility rates by about 3 percent for its Michigan customers to account for the tax cut.
Craddick has directed the Railroad Commission staff to assess the law — which reduced corporate tax rates from 35 percent to 21 percent effective Jan. 1 — and recommend ways to ensure that it is reflected in the gas utility bills paid by Texans.
She didn’t say how long the assessment might take, but commission spokeswoman Lauren Hamner Spreen called it a priority.
“I can just tell you without question that (Texas gas utility customers) will see the impact of it at some point soon,” Spreen said. “We are going to ensure that, because of that huge reduction (in the corporate tax rate), customers will realize those savings in their bills.”
It’s not clear at this point if the commission will proactively examine all gas utility rates or do so as individual gas utility companies come before it to advocate for new rates. Spreen said the precise mechanism will be determined by the entire Railroad Commission once it receives the staff recommendations.
It’s also possible that all consumers won’t see reductions in their gas utility rates, because in some cases rates simply might not rise as much as they otherwise would have.
Regardless, Spreen said the commission will be scrutinizing rates closely to ensure that consumers benefit from any windfalls from the corporate tax cut.
“We want to make sure that (gas utility) companies have a directive from this agency to set aside the cost-savings for the purpose of giving those dollars saved back to the consumer” one way or another, she said.