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Trump tax cuts should benefit Arizona’s utility customers

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The Tax Cuts and Jobs Act signed by President Trump last month has been great news for the economy. If I am successful in my effort at the Arizona Corporation Commission, this federal tax reform will not only lead to lower income taxes, it will also lead to lower monthly utility bills.

As a result of the legislation, many Arizona utility companies will see a significant reduction in their federal income tax bill. It is my desire that the tax savings be passed on to Arizona customers in the form of lower utility rates.

Justin Olson

Justin Olson

To accomplish this effort, I scheduled a workshop at the Corporation Commission to propose an efficient process for passing these tax savings to consumers. The workshop took place January 31. This public meeting provided an opportunity for all interested parties to speak in support or opposition to this proposal as the commission gathered public input to inform its decision on this issue. The archive of the live broadcast of the meeting can be viewed at www.azcc.gov/livebroadcast.asp.

As a professional tax analyst, the possibility of federal tax reform captured my attention when I was appointed to the commission by Gov. Doug Ducey in October. I was very excited in December to see the congressional legislation succeed in making the United States’ income tax rates more competitive. Among other changes, the legislation dramatically lowers the corporate tax rate from 35 to 21 percent. This rate reduction will lead to significantly lower tax expense for many utilities whose rates are set by the commission.

The effect is not insignificant. Last year, the commission approved an adjustment provision in the APS rate case. I am very encouraged by the recent response from APS to lower customer bills by a total of $119 million a year. The estimate would reduce monthly residential bills by an average of $4.68 per month.

But this effort does not end with APS. I expect all for-profit electric, gas, and water utilities to present similar plans. The day after the passage of the legislation, I requested our commission to open up a new docket on the tax reduction. Our commission was one of the first public utility commissions in the United States to call for an adjustment of the utility rates. I am happy to report that my fellow commissioners, the commission staff, and many regulated utilities have been responsive to this effort. It is a significant task to adjust hundreds of utility rates in short order. But I am confident that, with the support of the consumers, the commission will be successful in passing these savings on to ratepayers.

The economic growth spurred by the federal tax reform is already evident. Adding utility rate cuts to the tax rate reduction will fuel that economic growth to even further heights.

You can view items submitted to the electronic docket on the Arizona Corporation Commission website at http://eDocket.azcc.gov and search docket number AU-00000A-17-0379.

— Justin Olson is a member of the Arizona Corporation Commission.

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The views expressed in guest commentaries are those of the author and are not the views of the Arizona Capitol Times.

2 comments

  1. bradley taylor hudson

    People that taut the benefits of the recent “tax cuts” scare me. I doubt a man such as Mr. Olson is ignorant enough to believe that these tax cuts will, in the long run, help anyone but the rich, so his statements seem insincere. It is good to make moves to lower our utility bills, but this can be done with obsequious statements about the “… great news for the economy,” that we will eventually pay dearly for. This is disconcerting because he has been appointed to the A.C.C. and will be making decisions about our relationships with corporations.

  2. It’s a message that liberals don’t want you to hear. They have politically doomed themselves by refusing to own at least a little piece of the tax cuts, in their hatred of anything Trump.

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