The Utah Division of Public Utilities has announced that federal tax savings filed by Dominion Energy will be passed to Utah consumers. The company filed for $17 million in adjustments as the result of the recently enacted federal tax cuts, explained Chris Parker, director of the state Division of Public Utilities.
Utah utility customers should expect to begin seeing savings over the next few months, Parker said, with the first wave of cuts expected to take effect within the next 30 days, providing $2.5 million in savings on infrastructure.
The division is working with other agencies to immediately lower base rates to customers by an additional $14.5 million, he said, with further reductions to follow Dominion Energy’s gas cost filing later this spring.
“Ever since federal tax reform legislation was passed, our Division of Public Utilities has been working closely with the Public Service Commission and utilities to determine the best method to pass on tax savings to Utah customers,” Parker said. “Consumers should begin seeing lower gas bills soon, and our division will continue to ensure other tax cuts reach customer bills as quickly as possible.”
A local analyst said the consumer savings due to the congressional tax plan would likely continue in Utah and across the country.
Some people predicted that firms would just keep all the corporate tax savings, but that’s not how economies work, said Jeff Steagall, professor of economics and dean of the John B. Goddard School of Business and Economics at Weber State University. Just like the cost of any tax is shared between producers and consumers, the benefit of a tax cut is also shared by both groups, he added.
“While corporate tax cuts will put funds into consumers’ pockets, it’s less clear what the changes to the personal tax system will mean for consumers. Some will gain, others will lose,” he said. “Since it appears that those with higher incomes will be among the winners, they’re more likely to invest as opposed to consume with their windfalls. For those on the lower end of the economic spectrum, they are likely to see tax bills increase.”
Since those with lower incomes can least afford it and because they normally consume all of their income, their consumption is likely to fall, he added.
“The corporate tax cuts will keep more money in the hands of consumers,” Steagall said. “Most consumers will turn around and spend that extra money, stimulating the economy further.”
The increased consumer spending would almost certainly benefit firms and their employees in the short term, he said, although it could also fuel inflation, given how low unemployment is right now.
“It’s impossible to tell, but it’s a risk,” he said.