Congressman MacArthur Urges NJ Public Utility Companies to Pass Along Tax Reform Savings to Consumers
Congressman MacArthur Urges NJ Public Utility Companies to Pass Along Tax Reform Savings to Consumers
WASHINGTON, D.C. – Today, Congressman MacArthur wrote a letter to the New Jersey Board of Public Utilities urging public utility companies to pass along the savings they will receive from the new tax law directly to New Jerseyans. A recent study by The University of Pennsylvania’s Wharton Budget Model estimated that the newly enacted tax law will reduce the industry’s federal tax bill by $1 billion this year and increasing to $5 billion by the year 2021 nationwide.
“Public utilities will see significant savings in the upcoming years that need to be ultimately passed along to the consumer,” wrote Congressman MacArthur. “Electric companies in Massachusetts, Illinois, Oregon and Washington D.C. have already announced plans to pass their tax cuts on to customers through lower rates, and New Jersey utilities should join this group. This will help to fully realize the intended economic benefit of tax reform to all New Jerseyans.”
Full Text of Letter:
January 23, 2018
Richard S. Mroz, Esq., President
Joseph L. Fiordaliso, Commissioner
Mary-Anna Holden, Commissioner
Dianne Solomon, Commissioner
Upendra Chivukula, Commissioner
New Jersey Board of Public Utilities
44 S. Clinton Avenue
Trenton, NJ 08625
Dear President Mroz and Commissioners,
I’d like to draw your attention to the anticipated impacts of the recently enacted Tax Cuts and Jobs Act to the public utility companies your board (BPU) oversees, and request that a significant portion of anticipated savings from that legislation are passed along to consumers in the form of lower rates on electricity and gas.
A recent study by The University of Pennsylvania’s Wharton Budget Model estimated that the newly enacted law (Public Law No: 115-97) will reduce the industry’s federal tax bill by $1 billion this year and increasing to $5 billion by the year 2021 nationwide. The Penn economists also projected that the law will yield a reduction of about 0.5 percent in electricity prices. Electric companies in Massachusetts, Illinois, Oregon and Washington D.C. have already announced plans to pass their tax cuts on to customers through lower rates, and New Jersey utilities should join this group.
Public utilities will realize significant savings in the upcoming years that need to be ultimately passed along to the consumer. This will help to fully realize the intended economic benefit of tax reform to all New Jerseyans. One of the expectations of being removed from market competition through the current structure is passing along company savings to consumers. We expect the Board to ensure those benefits materialize for the ratepayers and not just the shareholders.
That said, we also understand the need for infrastructure improvement, especially for improved storm hardening and resiliency measures in light of the devastation caused by Hurricane Sandy. We request you take careful consideration of any proposed rate reviews that do not prioritize passing along savings to the end consumer, with an allowance for necessary infrastructure investment.
We’d also request the BPU require the public utilities to analyze and report the anticipated impacts of the Tax Cuts and Jobs Act to ensure these goals are being met and that any positive effects from the bill ultimately benefit the consumer.
We look forward to continued engagement to ensure these goals are met as the rate setting process continues, and offer any assistance the federal government is able to guarantee they are.
Sincerely,
Rep. Tom MacArthur
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