ROANOKE – The recently passed tax reform could mean a lower utility bill this year.
Utility customers can expect the federal tax overhaul to cut down on their energy costs.
The State Corporation Commission issued an order Monday to reduce the federal corporate income tax rate from 35 percent to 21 percent, effective Jan. 1.
Attorneys general in more than a dozen states, including Virginia asked the Federal Energy Regulatory Commission to insure that utility customers, not just utility companies benefit from corporate tax cuts.
In a letter sent to the commission on Tuesday, the coalition of attorneys general called for an investigation into the "justness and reasonableness" of utility rates now that the tax cuts were approved by Congress.
According to Monday’s SCC order, utility companies such as Dominion Energy, Roanoke Gas and Appalachian Power will now evaluate how to pass those savings on to their customers.
Appalachian Power spokesperson John Shepelwich talked to 10 News about how that could cut costs on power bills in 2018.
"There should be some relief," Shepelwich said.
Sheplewich said the order drawn up by the SCC requires utility companies to put a placeholder in accounting that will essentially pass savings from the corporate tax cuts down to the customer.
The move could possibly change the base power rate which Shepelwich said hasn’t increased since 2015. He explained how American Electric Power, which operates Appalachian Power will be affected by the tax reform.
"It is part of the cost of doing business. And as part of the cost of doing business, it is included in the rate base for customers,” Sheplewich said. “We indeed will provide that money back to the customers. That's where it should go.”
Shepelwich says some portion of the 14 percent savings that AEP will get will translate to customers' power bill.
"We certainly believe that customers will get a break. We will provide that break when the tax estimate becomes available, when the process becomes available and is ordered by the SCC,” Sheplewich said.
Shepelwich said it's not clear whether the relief will take the form of a bill credit or a rate decrease. He expects it to take effect sometime this year.