Iowa utilities will deliver $147 million in tax reform savings to consumers

Iowans could see up to a $147 million reduction on their heating and cooling bills as a result of federal tax reform.

MidAmerican, Alliant and other investor-owned utilities in Iowa will save millions as a result of the new tax law signed by President Donald Trump shortly before Christmas.

The utilities outlined those savings during a recent Iowa Utilities Board meeting and discussed how they would return the tax savings to consumers.

The new law, which became effective Jan. 1, lowers the corporate federal income tax rate from 35 percent to 21 percent.

Exactly how utilities will pass that money on to consumers is yet to be decided.

Some utilities discussed lowering rates, while others want to provide a "tax rider" that would result in a monthly credit to consumers' bills.

"It's hard to say what the dollar amount will be at this time," said Mark Schuling, the state consumer advocate. "You have to get to how utilities will give it back.

"What's the method you look at when you give it back. Is it per gallon of water? Will you do a megawatt of electricity, a therm of gas?" he said.

All the utilities said they want to pass the tax break back to consumers as soon as possible, Schuling said.

MidAmerican Energy estimated it it would return between $90.8 million and $112.3 million to electric customers.

The Des Moines utility, owned by Warren Buffet's Berkshire Hathaway Energy, suggested retaining between $7.5 million and $8.4 million from gas customers to make infrastructure improvements and offset future rate increases.

Interstate Power & Light, an Alliant Energy's subsidiary based in Cedar Rapids, said it would return between $18.6 million and $19.6 million to customers.

Alliant's gas customers could have between $500,000 and $3.7 million returned to them.

Black Hills Energy would return $1.6 million to its gas customers, the only service it provides in Iowa.

And Iowa-American Water Co., which provides service in eastern Iowa, would provide $1.5 million and $1.8 million to customers.

Related: Memo could provide possible roadmap to Iowa tax reform