The Montana Public Service Commission voted unanimously to approve an agreement for Montana-Dakota Utilities’ electric business to refund to consumers the benefits they received from the Tax Cuts and Jobs Act. The agreement, or Stipulation, calls for a $1.5 million consumer refund as a result of the TCJA.
“The consumers of Montana get to keep more of their hard-earned money. The utility is treated fairly. This agreement is a win for all concerned,” said Commissioner Tony O’Donnell, R-Billings, whose district is served by MDU.
In response to the tax cuts passed by Congress and signed into law by President Donald Trump, the PSC required major regulated utilities in Montana to pass any benefits on to consumers. The reduction of the corporate income tax from 35 percent to 21 percent could have potentially created substantial savings to the utilities.
MDU initially argued that they were currently under-earning from their authorized rate of return, and thus should not have to refund the benefits from the TCJA. Consumer groups, however, argued that utilities are not guaranteed to earn their expected rate of return, and that regardless of MDU’s actual earnings, tax savings should be refunded to the consumer.
The stipulation settles the dispute in favor of a $1.5 million refund to electric consumers. It comes on the heels of a stipulation from NorthWestern Energy, the other large regulated electric and gas utility in Montana, returning $20 million to their consumers. MDU customers will receive their refunds as bill credits next April. The average bill credit is expected to be about $23. For those no longer receiving utility service from MDU, if the amount they are owed is $5 or more they will receive a check. For amounts less than $5, the amount will be applied to the company’s deferred fuel cost account.
MDU’s gas business had already returned the tax benefits to consumers in the context of a different proceeding.
Commission Vice Chairman Travis Kavulla voted in favor of the Stipulation, and noted it was the final proceeding before the Commission to resolve the distribution of tax benefits. “I’m pleased that we finally finished our work to make sure Montana consumers received the benefits of the tax cuts,” he said.