Georgia Residents Will Get Stuck with Higher Utility Bills Due to Biden Corporate Tax Rate Hike

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Posted by John Kartch on Thursday, April 1st, 2021, 12:35 PM PERMALINK

If Warnock and Ossoff increase the corporate income tax rate, they will have to explain why they just increased your utility bills

If President Biden and Senators Warnock and Ossoff raise the corporate tax rate, Georgians will get stuck with higher utility bills. The higher bills will hit households and businesses just as they are trying to dig out from the pandemic.

Utility customers bear the cost of taxes imposed on utility companies. Utility companies are subject to the corporate income tax. Corporate income tax cuts drive utility rates down, corporate income tax hikes drive utility rates up.

Utility companies -- electric, gas, water -- must get their billing rates approved by the respective state utility commissions. When the Tax Cuts and Jobs Act lowered the corporate income tax rate from 35% to 21%, utility companies worked with officials to pass along the tax savings to customers.

As noted in a March 2018 statement from Georgia Power:

Georgia Power has completed an assessment of the impact of the Tax Cuts and Jobs Act for the company – including approximately $1.2 billion in benefits for customers. The benefits were confirmed as part of an agreement with Georgia Public Service Commission (PSC) Staff and include approximately $130 million in reduced taxes on financing costs for the Vogtle nuclear expansion; $330 million in direct credits to customers as a result of lower federal income tax rates over the next two years and approximately $700 million in future benefits to be addressed in the company's next base rate case in 2019, which also includes the benefits of last week's reduction in state of Georgia income tax rates. If approved by the Georgia PSC, the typical residential customer using an average of 1,000 kilowatt-hours per month could receive approximately $70 in refunds over the two-year period.

"We are committed to offering the highest customer value with rates below the national average, and we're pleased to be able to continue to pass the benefits of the new tax laws on to our customers," said Paul Bowers, chairman, president and CEO of Georgia Power.

Atlanta Gas Light customers benefited as well:

The Georgia Public Service Commission (PSC) recently approved a stipulation between the Commission staff and the Atlanta Gas Light Company under which the company’s customers will receive 100 percent of the net benefits from the 2017 federal Tax Cuts and Jobs Act (TCJA).

These benefits include $16 million in direct credits to be distributed in two installments of 50 percent each. Customers will receive the first credit on their July bills and the second on their October bills. The credits will appear as separate line items on customers’ bills. The average residential customer will receive approximately $8.62 on each bill. -- May 2018 Daily Energy Insider article.

Conversely, a vote for a corporate income tax rate hike is a vote for higher utility bills right as the USA is trying to recover from the pandemic.

Biden wants to impose a corporate income tax increase to 28%, even higher than communist China's 25%.

Sens. Ossoff and Warnock would be wise to stay away from tax increases.