Lehigh Valley

Utility bills could decrease based on new tax law

America's new tax law lowered the corporate rate from 35 percent to 21 percent, which is good, clearly, for large companies including utilities like PPL and First Energy.

Since utilities are paying lower taxes, does that mean you could soon pay less on your bills?

"Perhaps we need to look at how are utilities structured and what's their business model," Dr. Rudy Shankar told WFMZ. 

Shankar is the director of Lehigh University's Energy Systems Engineering Institute, and was Vice President at Tennessee Valley Authority during his 40-year career.

Utilities like these, he pointed out, do not just decide rates.

"What they have to comply to is a public utility commission called PUC," he explained. 

The Pennsylvania PUC approves what rates utilities can charge and assesses the basis for them, which is why PPL told WFMZ they are waiting for guidance from that commission, and they do not know specifically how prices could be affected. 

A representative of the PUC told WFMZ they are still examining the situation, but if other states are an indication, prices could be coming down.

Utilities owned by PPL in Kentucky, for instance, have already been told to pass savings to consumers. 

The next question, of course, is if this happens, how much might your bill go down?

Nobody knows for sure, but Dr. Shankar had an educated estimate.  

"Take a typical electric bill of a hundred dollars," he said. "The difference could be anywhere from 5-10 bucks."

This adds up to a lot of money.    

"If you just take the millions of customers, that's a huge amount," he said. 

Pennsylvania's Acting Consumer Advocate Tanya McCloskey, whose job is to represent utility consumers before the PUC, told WFMZ "savings should be flowed through to ratepayers."

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