Some 35 Utah utility companies stand to reap a property tax windfall this year if they do not voluntarily reduce customers' rates.
Joseph L. Ingles, director of the Utah Committee of Consumer Services, says a law passed by the Legislature will reduce tax rates for the utilities by 6.8 percent this year and another 0.4 percent next year. Anticipated tax payments are routinely included in utility rates."Our dilemma is getting these utilities to reduce their rates without having to go through a major rate case for each company," Ingles said. "These companies are going to collect more money for taxes than they are going to pay, and we don't think that's right."
Of Utah's big three utilities, Mountain Fuel Supply, US WEST Communications and Utah Power & Light Co., only UP&L is scheduled for a rate case that could address the committee's concern. The Utah Public Service Commission completed a rate case for Mountain Fuel last fall and is currently in the process of weighing testimony from US WEST's recently completed case, which is currently pending a final order from the commissioners.
The UP&L case is scheduled to begin in June, and Ingles believes the tax issue can be addressed in that proceeding as it relates to the power company.
Ingles said the committee will be sending letters to the various companies, making them aware of the tax reduction contained in SB 397, which resulted after AMAX won a favorable tax ruling from the Utah Supreme Court last fall. He said the companies will be urged to make adjustments where possible to either reduce rates, or use the tax windfall to offset expenses that might otherwise result in a rate increase request.
"We're looking for ways that we can adequately address this issue," Ingles said. "We hope we can avoid opening new major rate cases and still get the reductions that appear justified."