In a letter sent Wednesday to state regulators, Green Mountain Power promised to pass on the proceeds of the Trump tax cut law to its customers.
The law, which took effect this month, cuts corporate tax rates from 35 percent to 21 percent. As a subsidiary of a shareholder-owned corporation, Green Mountain Power will get the benefit of that tax cut.
Utility president and CEO Mary Powell wrote to Department of Public Service Commissioner June Tierney that company staff are still determining how much GMP will save.
"We plan to share that calculation with you and the Public Utility Commission and then return 100 percent of the tax benefit to customers," Powell wrote. "We will also include the new tax rate in future proposed rates. "
Powell's promise came in response to a request from Tierney. On December 22, the DPS commissioner wrote to Powell seeking "an expeditious assessment of these federal legislative impacts to ensure the justness and reasonableness of your company's rates." Tierney asked for a response by January 13.
(The PUC is a three-member board that regulates utility rates. The DPS serves as ratepayer advocate in PUC processes. Pardon the alphabet soup.)
Tierney sent her inquiry just after the state PUC approved a rate hike of nearly 5 percent for GMP. Her letter made reference to the rate increase and noted that it was based on a 35 percent federal tax rate.
"This rate setting assumption is now clearly out of date," Tierney wrote. She further noted that her staff had been pondering the issue for weeks, but the DSP made no apparent effort to inject the looming corporate tax cut into consideration of the rate hike itself, or to postpone the rate case until the impact of the tax cut could be assessed.
Powell wrote that there are some other aspects of the tax cut legislation, such as asset depreciation, that will reduce the amount returned to ratepayers. She promised more information later this month.
Read Tierney's letter and Powell's response below: