Utilities calculate impact of tax break on NH ratepayersBy MICHAEL COUSINEAU
New Hampshire Union Leader
April 02. 2018 11:39PM
Lower federal and state business taxes will mean more than $17 million in yearly savings for various water, gas and electric customers around New Hampshire.
“There’s a significant ratepayer benefit to be had as a result of tax reform and those ratepayers will feel those effects,” said Donald Kreis, the state’s consumer advocate, who advocates on behalf of ratepayers, on Monday.
Some folks will see the savings reflected in their bills quicker than others.
Unitil calculated around $2.24 million in yearly tax savings.
Unitil said that would mean a decrease of about $1.42 per month, or 1.2 percent, on bills for customers using 600 kilowatt hours a month if its rate request is approved, according to spokesman Alec O’Meara.
Other costs increased by about $1.54, so an average customer’s bill still is forecast to rise 12 cents a month, he said.
The state Public Utilities Commission must finalize the request, which would adjust rates starting May 1.
In January, the PUC in January ordered investor-owned public utilities regulated by the state to calculate and report their tax savings to the PUC by April 1.
The federal corporate income tax rate dropped from 35 percent to 21 percent in 2018. Also this year, the New Hampshire Business Profits Tax declined from 8.2 percent to 7.9 percent and the New Hampshire Business Enterprise Tax fell from 0.72 percent to 0.675 percent.
Eversource, the state’s largest electric utility, calculated tax savings of nearly $12.3 million annually.
“The news is that we’ve identified the amount that under current rates we are overcollecting if you will and that is about $12 million in 2018 if nothing changed,” said spokesman Martin Murray.
Murray didn’t have a calculation available on how much the average residential customer would save from the lower taxes.
Customers could see those savings starting later this year. But Murray said it is too soon to say whether people’s bills would decline or just go up less because of other costs factored into rates.
“Within a couple of months, we will file to introduce or request the beginning of a comprehensive rate review,” which typically takes about a year, Murray said.
Eversource also will request proposed temporary rates, which will factor in the $1 million per-month tax savings.
If the temporary rates, for example, start Sept. 1, then Eversource would owe a refund for those eight months of higher taxes, or more than $8 million to be returned to ratepayers, he said.
“Using that scenario, it would be up to the NH PUC to decide how, and over what period of time, to provide the $8 million refund to customers,” Murray said.
The temporary rate going forward would account for the lower tax rates, meaning ratepayers still would be enjoying $1 million per month in tax savings collectively.
Meanwhile, Liberty Utilities’s natural gas customers starting May 1 will feel the effects of lower taxes, with the average residential gas customer saving about $10 a year, according to spokesman John Shore.
Liberty Utilities factored in about $2.4 million in tax savings into its proposed gas rates, which still needs PUC approval.
Granite State Electric Corp., which does business as Liberty Utilities, asked for an extension with the PUC until April 13.
Aquarion Water Co. of New Hampshire calculated savings of around $200,000 a year, according to Kreis.
Kreis said some utilities would rather calculate the tax savings as part of the next rate case rather than seek an immediate rate reduction.
“I think, in general, my bias is in favor of immediate ratepayer relief,” Kreis said.