El Paso Electric customers will get refunds from lower tax rates

El Paso Electric customers can expect a refund on their utility bills as early as the summer, officials said Tuesday.

The amount of the refund will be based on a reduction to the federal income tax rate that still is being calculated by EPE, but officials said customers may see a credit by mid-2018.

“So there will be a credit related to the new tax rate that is expected to appear on customers’ bills in Texas later this year, but that number and amount is currently being calculated,” said EPE spokesman George De La Torre.

More: El Paso Electric mobile payment service provider TIO Networks hacked

The credit comes from a provision that was included in the rate settlement with the utility approved by the City Council in September and subsequently approved by the Public Utility Commission of Texas in December. The provision stipulated that El Paso Electric’s Texas customers would receive a refund if there was a reduction in the federal income tax rate.

Outside legal counsel representing the city said on Tuesday that the new income tax rate for corporations was enacted in December, which lowered the rate for corporations from 35 percent to 21 percent.

During the presentation to City Council, Norman Gordon, the attorney that represents the city in utility rate cases, said El Paso Electric would likely get an approximately $21 million refund with residential customers receiving about 46 percent of that.

Mayor Dee Margo asked Gordon if that meant the $21 million refund to the utility would cancel out the $14.5 million rate increase that went into effect in January and also provide a $7 million refund for customers.

Gordon said it would, but De La Torre disagreed with that estimate.

De La Torre said he is not sure where the $21 million figure came from. He also said the $14.5 million rate increase will remain in effect.

More: El Paso Electric residential customers' bills to rise after rate hike OK'd

More: El Paso Electric has $59.7 million profit in Q3, down 20 percent from 2016

“So we are still working through the calculations and I’m not sure how the city came up with $21 million,” De La Torre said. “They then subtracted $21 million from the $14.5 million approved in the Texas rate case and came up with $7 million to be refunded.”

De La Torre said the refund will be based on whatever was collected from the date the new tax rate went into effect on Dec. 31.

The amount that is calculated for the refund will be filed in mid-April with the municipalities, including El Paso and the Public Utility Commission of Texas. It must then go through an approval process.

“Again, the numbers are still being calculated and I won’t have them until we file the refund tariff in April,” De La Torre said.

Margo said he went by the figures that were presented by the city’s outside legal counsel.

“The bottom line is yes, there is going to be a credit,” Margo said.

Texas Gas Service customers may also see a credit coming from the tax rate reduction, but those figures were not available Tuesday.

Officials with Texas Gas said they are committed to lowering rates and may have figures available at the next City Council meeting in two weeks.

Elida S. Perez may be reached at 546-6137; eperez@elpasotimes.com; @ElidaSPerezEPT on Twitter.