PSC OKs plan to pass on federal utility tax cuts to Chesapeake, water customers

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The Delaware Public Service Commission on Thursday approved an overall rate reduction for regulated utilities related to the overcollection of federal corporate taxes due to the Tax Cuts and Jobs Act of 2017.

Last year, the Public Service Commission approved an overall rate reduction for Delmarva Power electric and natural gas customers, which is already in effect.

Federal tax savings realized by additional Delaware regulated utilities will be passed on to residential customers in the following average dollar amounts per billing cycle:

Utility Company
Average Usage Billing Cycle Savings
Yearly Residential Customer Savings
Artesian Water Company
$2.35 per bill (4.58% bill savings)
$28.20
Long Neck Water Company
$2.04 per bill
$24.48
Suez Water
$1.71 per residential bill (4.5% bill savings)
$20.52
Chesapeake Utilities
$1.52 per residential bill (1.57% bill savings)
$18.20
Sussex Shores
$1.71 per residential bill
$6.84 (billed quarterly)
Tidewater Utilities
$8.17 per residential bill (4.21% bill savings)
$32.68 (billed quarterly)
*Customers of Broadkill Beach, Wilkerson Water Company, and Inland Bay and Artesian Wastewater Management, Inc. will not see a change as these utilities did not collect more than 21 percent federal tax prior to the enactment of the Tax Cuts and Jobs Act.

In January 2018, the Public Service Commission granted the Delaware Public Advocate’s petition to reduce the rates of all regulated utilities due to the reduction of the federal corporate tax rate from 35 percent to 21 percent. Thursday’s decision is the culmination of the PSC’s efforts to reduce the rates for customers of regulated utilities in Delaware. Overall, the rate reduction to Delaware’s regulated utilities totals more than $18 million.

“These are substantial savings for all regulated utility customer classes and especially the residential sector. I want to thank the Commission for approving our petition to reduce rates last year, the 38 members of the General Assembly for their support of that petition, led by Representative John Kowalko and Representative Kim Williams, and for today’s approval of the final rate reduction due to the Tax Cuts and Jobs Act of 2017. These reductions, coupled with the overall reduction from Delmarva Power’s electric and natural gas rate cases, have ensured all excess taxes flow back to customers in the form of reduced rates” said Public Advocate Drew Slater.

“We appreciate the Commission’s leadership on this issue and we are ecstatic that these lower gas rates come just in time for the winter heating season” said Raj Barua, PSC’s Executive Director.

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