MPSC makes further requests for ratepayer relief following passage of new federal tax law

The Michigan Public Service Commission (MPSC) has asked the Federal Energy Regulatory Commission (FERC) to direct interstate natural gas pipeline operators to adjust their rates in response to lower corporate rates under the federal tax law changes.

The request follows a Commission order in December that all 13 rate-regulated utilities in Michigan report to the MPSC how their savings from the new tax law will benefit ratepayers (Case No. U-18494). All utilities have filed their proposals and the public and other stakeholders have until Feb. 2 to respond. The Commission will then determine how and when savings will flow back to ratepayers.

In a letter sent Jan. 11 to FERC, the MPSC requested the federal board “take immediate action directing all interstate natural gas pipelines” to either voluntarily adjust their rates effective Jan. 1 or be subject to the FERC Natural Gas Act, Section 5, which allows for an investigation into whether rates are just and reasonable.

“The Michigan Public Service Commission contends that such action is in the public interest,” according to the letter signed by Chairman Sally Talberg and Commissioners Norman Saari and Rachael Eubanks.

Under the Tax Cuts and Jobs Act, the corporate tax rate dropped from 35 percent to 21 percent, effective Jan. 1. Savings realized by interstate pipeline operators could be passed on to ratepayers in the form of a reduced gas cost recovery charge, which is how much a utility pays for the gas it supplies to its customers.

In separate actions, Michigan joined letters to FERC from the Organization of MISO States (OMS) and the Organization of PJM States Inc. (OPSI) asking FERC to study how changes in the tax law could affect the electric transmission costs that consumers pay. Michigan customers pay transmission costs through their utility bills, but FERC has jurisdiction over rates.

PJM and MISO are regional transmission organizations that run the electric transmission systems in 28 states, including Michigan. MISO covers all of the state except for the southwest portion, which is served by Indiana Michigan Power Co. and is under PJM’s jurisdiction. Talberg is on the OMS Board of Directors and Eubanks is secretary of OPSI.