The University could see a significant decrease in utility prices if Gov. John Bel Edwards’ letter to the Public Service Commission pays off.
Edwards, in his appeal to the PSC on Jan. 4, asked for lower utility rates due to the steep reduction in federal corporate income tax rates. The reduced costs would result in the University and its students paying less for utilities. The University’s utility costs include electricity, water and gas.
“I am officially requesting that the PSC undertake a review of all current rate plans for the public utilities doing business in Louisiana and make the necessary adjustments to reflect the reduction in corporate income taxes from 35 percent to 21 percent,” Edwards stated in his letter to the PSC commissioners. “I want to ensure the benefit of this federal tax savings is passed on to the ratepayers in this state.”
The PSC regulates 12 energy companies, all of whom would be forced to lower utility rates if the commissioners decide the cut in corporate income taxes merits a change in Louisiana utility prices. The company that would be most affected by this rate reduction would be Entergy, which is the supplier for almost half of the state’s energy, including the New Orleans and Greater Baton Rouge area. Entergy along with Enterprise, is also the supplier for the University’s gas.
“Entergy believes that the [corporate income] tax reform legislation will benefit our customers by lowering the tax costs that they otherwise would pay in rates,” said Entergy officials in a statement to The Daily Reveille. “These lower tax costs come at a time when our utility is making significant investments to modernize our electric infrastructure in order to better serve our customers, and they will help us keep rates down.”
Edwards is trying to push for more tangible consumer benefits, using the example of Dominion Energy, which has lowered consumer rates by about 5 percent in South Carolina.
“We hope to hear similar news from Louisiana companies as they carefully review the impact of the federal tax legislation on their bottom lines,” Edwards said in his letter to the PSC.
While it seems unlikely that the energy companies such as Entergy would voluntarily lower rates, the PSC might do it for them.
“Federal income tax rates are one of the factors the PSC considers in setting utility rates in Louisiana,” said Secretary of Revenue Kimberly Lewis Robinson in a statement to The Daily Reveille. “The Edwards administration believes that with the federal corporate income tax rate dropping from 35 percent to 21 percent, it is important that we examine whether these savings can be passed along to Louisiana ratepayers.”

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Haskell Whittington

Large power lines stand tall along LSU's west campus border on Tuesday, Jan. 8, 2018.