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4/24/2018
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Minority Leader Patricia Morgan Demands Reduction in Utility Rates
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Minority Leader Patricia Morgan Demands Reduction in Utility Rates
Wants to Pass Federal Tax Savings on to Consumers
STATE HOUSE -- House Minority Leader Patricia Morgan (R-District 26 Coventry, Warwick, W. Warwick) will testify today, Tuesday, April 24, 2018 before the House Committee on Corporations about reducing utility rates across Rhode Island.
In December, Congress passed the Tax Cuts and Jobs Act, a comprehensive tax reform bill that has had a positive effect on corporate earnings. The reforms lowered the federal corporate tax rate from 35% to 21%. Tax reform has been a windfall for corporations, including public utility providers, with some economists estimating the new changes will reduce the public utility industry’s tax burden by billions.
Such estimates have prompted a growing number of states to call for utility companies to reduce their rates, including Massachusetts, which ordered its electric, gas, and water companies to determine new rates based on the tax savings.
Leader Morgan feels that Rhode Island should do the same, stating: “The federal tax cut offers state regulators the opportunity to roll back some of the recent electric rate increases and provide consumers with much needed relief. Passing these savings on to consumers will contribute to our economy and reduce the cost of living in Rhode Island.”
In November, National Grid, asked the Public Utilities Commission to approve a rate increase that would bring in $71.6 million in additional revenue. The company reduced their request after the federal tax package passed but still asked for a revenue increase of $45.6 million to cover operating costs, equipment, and cybersecurity investments. State regulators have recently recommended deep cuts to the new proposal but would still allow National Grid to raise rates and generate $11.3 million in additional revenue.
The bill (2018-H 7628) calls on public utility providers in Rhode Island to decrease their rates based on the savings they will receive from the lower federal tax rate to ensure the savings are passed on to customers.
“Consumers here in Rhode Island pay 56% above the national average for their electricity. Public utility carriers simply cannot keep these savings for themselves. Rhode Islanders have seen their utility bills surge over the years, increasing our already exorbitant cost of living. It has also hurt businesses, encouraging them to look elsewhere, and weakening our economy. My legislation will lift some of that burden and provide Rhode Islanders with some much-needed relief.”
For more information, contact:
Ian O'Connor, House Minority Office
State House Room 106
Providence, RI 02903
(401)222-2259
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