Study claims 2017 tax act will save billions in electricity fees
JEFFERSON CITY - The U.S. Chamber of Commerce Global Energy Institute said the Tax Cuts and Jobs Act of 2017, otherwise known as the 2017 tax plan, will end up saving electricity customers billions of dollars across America. Missouri specifically will save about $652 million over the next five years.
It also estimates the cuts will create 2,098 jobs.
The Chamber of Commerce said that because the tax plan cut tax rates on utility companies, utility companies would, in turn, cut rates for customers.
This change doesn't effect all electric companies, though. It really only affects companies classified as "investor owned utilities."
"The reason we focused on investor owned utilities is because their rates are set on their cost of service," Global Energy Institute Vice President of Policy Heath Knakmuhs said. "The other utilities that are not investor-owned, like cooperatives and municipals, are actually tax-exempt organizations. So, they haven't had to pay taxes in the past and so a tax cut is not having a real impact for those entities."
That means these savings don't mean much in Columbia, where the dominant providers of electricity are the City of Columbia and Boone Electric Cooperative, which are a municipal and a cooperative, respectively.
However, Ameren Missouri is an electricity provider in Missouri that is categorized as an investor owned utility. It is already seeing some benefits.
At the beginning of August, Ameren was able to cut its customers rates by 6% as a result of the tax cut. Ameren also plans to hold that rate until April 2020.
Knakmuhs insists the reduced electric rates will be especially good for small business owners.
"I mean, a lot of small business owners, one of their biggest bills they probably pay, aside from the raw materials they might have to buy and the employees that are either making their products or selling their projects, is going to be their energy bill," Knackmuhs said.