The reduction and forthcoming rate credits continues a directive of the Commission issued in January 2018 that ensures customers receive the benefits of the corporate tax cut contained in federal tax legislation passed by Congress in December 2017. The federal corporate income tax rate was reduced from 35% to 21% effective January 1, 2018. A week later, on January 8, the SCC ordered the companies to preserve the savings from this tax cut for the benefit of their customers.
Last July, in response to legislation passed by the 2018 Virginia General Assembly, Dominion Energy Virginia reduced rates by $125 million, on an interim basis subject to further Commission review. Because of the same legislation, Appalachian Power reduced rates by $50 million last July, also subject to further review. And, in November, Appalachian Power applied certain Federal tax savings as an offset to the revenue generated by the portion of the monthly bill that pays for the fuel used to generate electricity.
Since then, each company submitted additional filings with the Commission to make certain the tax savings are properly calculated and reflected in base rates as of April 1, 2019. Dominion Energy Virginia’s base rates are being reduced by $182.5 million, or $57.5 million more than the interim rate reduction last July. Appalachian Power’s base rates are being reduced by $80.1 million, or $30.1 million more than last July.
Each company will be providing a one-time credit to customers to account for the difference in rates between the January 1, 2018 effective date of the Federal tax reduction and March 31, 2019, the last day of interim rates.