Illinois Attorney General Kwame Raoul has officially asked the Illinois Commerce Commission to reconsider its decades-long timeline for rebating Ameren and ComEd customers hundreds of millions of dollars that were collected after the federal tax cuts boosted the utility ledgers.
The ICC ruled in December that the utilities, Ameren owing $158 million and ComEd owing $385 million, would have 38- and 35-year periods, respectively, to return the funds to ratepayers. The utilities charged customers based on a rate that paid for a 38 percent federal tax hit, but the Tax Cuts and Jobs Act lowered that burden to 21 percent on Jan. 1, 2018.
“Consumers paid public utility rates to ComEd and Ameren reflecting the higher federal tax rate, and now that the federal tax rate has lowered, fairness dictates that consumers should get that money back,” Raoul said in a statement. “Allowing an unreasonable refund period of close to 40 years nearly guarantees many customers will never get their fair share of the refunds.”
The reason for the long payback period, the ICC ruled in December, was to be more equitable in returning the money over the life of the assets that the companies used as tax deferments during the period of lower taxes. This, they decided, would ensure that the same customers who are paying overtime for the underlying assets also realize the benefits of the new lower tax rates going forward.
“...the Commission is tasked with balancing interest of all customers, in the short-term and long-term, and must ensure that [excess amortization of deferred income tax] balances are refunded in a manner that is equitable and benefits all customers,” ICC Chairwoman Carrie Zalewski said in December.
Raoul, as well as the Chicago-based Citizens Utility Board, said a five-year or seven-year plan would reduce rates by $62 million for ComEd customers and $20 million for Ameren customers.
“We thought it should be returned in more reasonable time periods,” CUB spokesman Jim Chilsen said. “Many customers should be getting dollars off their electric bills but now they’ll only be getting pennies each month.”
Other states, Chilsen said, have adopted shorter payback schedules, but the utilities said in their testimonies to the ICC that each situation was different.