Duke Energy to Deliver More than $140 Million in Annual Savings to Customers from New Tax Law
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Duke Energy's Indiana customers will receive approximately $142 million in annual savings on their electric bills from the new federal tax law if a proposed settlement with consumer groups is approved by state utility regulators. Duke Energy, the Indiana Office of Utility Consumer Counselor, the Indiana Industrial Group and Nucor Steel submitted an agreement to the Indiana Utility Regulatory Commission outlining how to pass along the benefits of the Tax Cuts and Jobs Act, which federal lawmakers passed in late 2017.
"The federal tax act is an opportunity for us to lower customer bills and help offset future rising costs," said Duke Energy Indiana President Melody Birmingham-Byrd. "We've reached an agreement to pass along tax savings embedded in our electric rates over the next two years. It's a constructive agreement that reduces rates while still preserving our credit quality, which is important for keeping customer bills low."
Duke Energy began reflecting the lower federal tax rate in customer bills earlier in 2018 when filing new electric bill riders with the state utility regulatory commission. In addition to the tax reductions in bill riders, the settlement proposes reducing base rates in September 2018 to reflect the lower tax rate. The settlement also includes refunds of accumulated deferred taxes in 2018 and 2020.
The cumulative impact of all these steps is a 5.6 percent average rate reduction by 2020, with most of the savings beginning in 2018. Additional savings as a result of the federal tax act and the settlement will be reflected in future filings before state utility regulators.The amount of the tax savings will vary by customer class. An average residential customer using 1,000 kilowatt-hours a month will save $7.33 per month from the Tax Reform Act.