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Opinion | Fed tax cut will benefit Michigan utility customers

To make sound decisions, government bodies allow ample time for outside input and thoughtful deliberations. At times, it appears reaching a consensus moves very slowly.

That makes the Michigan Public Service Commission’s extraordinary efforts in response to the federal Tax Cuts and Jobs Act even more noteworthy. The Commission acted quickly to bring maximum utility bill relief to Michigan customers after the lower corporate tax rates took effect at the start of this year.

My colleagues and I at the Commission were adamant that if utilities are going to benefit from a corporate tax rate that fell from 35 percent to 21 percent, then their customers should benefit, too, and as soon as possible without sacrificing the Commission’s core principles of accuracy and opportunity for stakeholder input.

In the first phase of calculations, which is now complete, the Commission approved $379.5 million in rate relief for customers of investor-owned utilities statewide. So far in the second phase of our three-step process, more cuts totaling nearly $7.8 million have been OK’d for customers of six investor-owned utilities.

The tax savings have resulted in lower gas and electric bills for residential and business customers of the utilities the Commission regulates, such as DTE Energy Co. and Consumers Energy Co., with the average savings for a residential customer of $1.93 a month. Some customers have seen the impact on their bills since July, just 90 days after utilities were told to make their first filings with the MPSC.

The MPSC’s process has been an exemplary example of government being proactive in the public interest. Our staff had been tracking the tax legislation as it developed on Capitol Hill late last year. By the time the President and Congress reached an agreement last December, the Commission had already designed a plan of action.

To prepare the cases for Commission votes, our staff reviewed every case filing for its impact on previously approved rate orders. They filed testimony, rebuttal testimony, initial briefs, reply briefs, and participated in cross examination of expert witnesses. Staff also participated in numerous other meetings with utilities and intervening parties.

The thorough work our staff has done – in conjunction with utilities and other stakeholders, and with input from the public – has been truly impressive, especially given the expedited deadlines the Commission set to bring timely rate relief to Michigan residents and businesses.

There is more ahead to take advantage of additional savings in addition to the reductions that have already been announced. In the coming months, expect more news on further bill reductions from savings on long-term business expenses such as excess deferred taxes.

The MPSC’s mission is to ensure safe and reliable utility services at reasonable rates for Michigan’s residents. The Commission’s timely action to lower rates to make sure the benefits of the tax law changes flow in a timely manner to customers is just one way the MPSC looks out for the public interest.

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