NJ Board of Public Utilities signs mandate ordering utility companies to pass tax savings onto consumers after MacArthur’s letter
WASHINGTON, D.C. – Today, the New Jersey Board of Public Utilities (BPU) signed an order that mandates utility companies to pass any savings from the new federal tax law onto consumers. This news comes after Congressman Tom MacArthur wrote a letter to the NJ BPU on January 23rd urging the exact same action.
“I called on the BPU to pass along benefits of tax reform to consumers on January 23, because New Jerseyans deserve additional relief,” said Congressman MacArthur. “Make no mistake, this savings on utility bills is a direct result of the Tax Cuts and Jobs Act and will mean even more money in the pockets of middle class taxpayers in New Jersey. In voting for the Tax Cuts and Jobs Act, I voted to lower tax rates, double the standard deduction and child tax credit, preserve property tax deductions, and to make it easier for companies to invest in their employees and customers, and it’s great to see this good economic news continue for ratepayers in New Jersey.”
Full Text of Congressman MacArthur’s Letter to BPU:
January 23, 2018
Joseph Fiordaliso, President
Mary-Anna Holden, Commissioner
Dianne Solomon, Commissioner
Upendra Chivukula, Commissioner
New Jersey Board of Public Utilities
44 S. Clinton Avenue
Trenton, NJ 08625
Dear President Fiordaliso and Commissioners,
I’d like to draw your attention to the anticipated impacts of the recently enacted Tax Cuts and Jobs Act to the public utility companies your board (BPU) oversees, and request that a significant portion of anticipated savings from that legislation are passed along to consumers in the form of lower rates on electricity and gas.
A recent study by The University of Pennsylvania’s Wharton Budget Model estimated that the newly enacted law (Public Law No: 115-97) will reduce the industry’s federal tax bill by $1 billion this year and increasing to $5 billion by the year 2021 nationwide. The Penn economists also projected that the law will yield a reduction of about 0.5 percent in electricity prices. Electric companies in Massachusetts, Illinois, Oregon and Washington D.C. have already announced plans to pass their tax cuts on to customers through lower rates, and New Jersey utilities should join this group.
Public utilities will realize significant savings in the upcoming years that need to be ultimately passed along to the consumer. This will help to fully realize the intended economic benefit of tax reform to all New Jerseyans. One of the expectations of being removed from market competition through the current structure is passing along company savings to consumers. We expect the Board to ensure those benefits materialize for the ratepayers and not just the shareholders.
That said, we also understand the need for infrastructure improvement, especially for improved storm hardening and resiliency measures in light of the devastation caused by Hurricane Sandy. We request you take careful consideration of any proposed rate reviews that do not prioritize passing along savings to the end consumer, with an allowance for necessary infrastructure investment.
We’d also request the BPU require the public utilities to analyze and report the anticipated impacts of the Tax Cuts and Jobs Act to ensure these goals are being met and that any positive effects from the bill ultimately benefit the consumer.
We look forward to continued engagement to ensure these goals are met as the rate setting process continues, and offer any assistance the federal government is able to guarantee they are.
Rep. Tom MacArthur