Lower corporate tax rate projected to save Wisconsin utility customers more than $275 million

Customers of Wisconsin utilities are projected to save more than $275 million from the new lower rate for federal corporate taxes, based on estimates compiled by the Citizens Utility Board of Wisconsin and the Wisconsin Industrial Energy Group.

The corporate tax rate was lowered to 21% from 35% as part of the recent tax reform and tax cut legislation.

Projected taxes are included as an expense when setting utility rates and the cost is passed onto customers.

The state’s utilities were required to file their projected tax savings with the Public Service Commission last month.

We Energies electric customers are projected to save $97 million a year from the lower corporate tax rate based on the estimates.

The utility has proposed using the savings to offset more than $400 million in deferred costs, some going back as far as 2002, primarily from the utility’s transmission system and a power plant in the Upper Peninsula of Michigan.

At least some of those costs would eventually be passed onto customers.

The estimate does not include the projected tax savings from the power plants in Oak Creek and Port Washington. Those savings will be spread among customers of We Energies and other utilities.

Several utilities have proposed giving customers a credit on their bills.

Wisconsin Public Service has proposed using the savings to help offset the cost of a project at one of its coal plants and other projects.

We Energies and WPS are part of WEC Energy Group.

The Citizens Utility Board; the Wisconsin Industrial Energy Group, which represents large industrial customers; and the Wisconsin Paper Council want WPS and We Energies natural gas customers to receive credits on their bills, said Tom Content, executive director of the Citizens Utility Board.

Matthew Spencer, a spokesman for Public Service Commission, said the commission is expected to decide this year on how to apply the savings to customers’ bills.

Based on the PSC filings, the initial annual savings from the lower tax rates are:

We Energies natural gas customers — $20 million.

WPS electric customers — $41 million.

WPS natural gas customers — $7 million.

Madison Gas & Electric — $6 million to $9 million for electric customers and $2 million to $3 million for natural gas customers (1.2% to 1.9% average reduction).

Alliant electric customers — $40 million to $50 million

Xcel electric customers — $25 million to $30 million.

The projected savings range roughly from 1% to 4% of customers' bills, depending on the utility.