Utility passes entirety of tax break to customers
Avangrid stated it will pass to its electricity and gas customers the full benefit of savings it will realize from the federal Tax Cuts and Jobs Act, with the Orange-based company’s service area covering portions of the New Haven and Bridgeport areas.
Avangrid issued a statement Wednesday night confirming the policy as “a matter of fairness” in its words, more than a week after the Connecticut Public Utilities Regulatory Authority stated it would review Avangrid’s rates and those of other Connecticut electricity and gas utilities, with federal taxes a factor in the rates approved by PURA.
Avangrid subsidiaries include United Illuminating, Southern Connecticut Gas and Connecticut Natural Gas, as well as Central Maine Power and Maine Natural Gas; Berkshire Gas in Massachusetts; and New York State Electric & Gas and Rochester Gas & Electric.
Under the new tax law, U.S. companies will pay a 21 percent rate on their corporate income taxes, down from 35 percent previously. In December, PURA approved electricity rates for United Illuminating amounting to $375 million in 2018. The new federal tax rate would reduce that total by between $10 million and $11 million, according to Rich Sobolewski, supervisor of utility financial analysis for the office of Connecticut Consumer Counsel Elin Swanson, wiping out nearly the entirety of an $11.5 million distribution increase PURA had approved for this year.
Sobolewski calculated at between $6 million and $7 million this year’s tax benefit for customers of Southern Connecticut Gas.