Kansas Gas Service ordered to pass tax break to customers

Kansas creates plan to recover deferred energy payments
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Revision from KCC: The total amount of the tax savings realized by Kansas Gas Service in the accrued regulatory liability account is approximately $16.6 million. The one-time bill credit for residential customers will be $21.06 instead of $22.78 as stated yesterday. The amounts are slightly lower than what was included in yesterday’s release due to the fact that on February 6th, new rates were put in place for Kansas Gas Service customers. The new rates took into account the lower tax rate, meaning only 5 days of tax savings from February were put into the regulatory liability account versus the entire month of February.

Release: In an order issued this afternoon, the Kansas Corporation Commission (KCC) instructed Kansas Gas Service (KGS) to return just over $17.9 million in tax savings to its customers. For residential customers, that will mean a one-time bill credit of $22.78.

The savings resulted when the Federal Tax Cuts and Jobs Act (TCJA) reduced the corporate tax rate from $35% to 21% in January of last year. The KCC required utilities to track savings resulting from the tax cut and maintain those funds in a separate interest bearing regulatory account pending Commission review.

In a rate case filed in June, KGS asked to retain the accrued tax savings to offset its cost of service. The Commission determined that was not in the public interest and as today’s order states, “KGS has provided no evidence that returning the regulatory liability to its customers will endanger KGS’s health and viability in providing reliable, sufficient and efficient service”.
Today’s order can be viewed on the Commission’s website at: http://estar.kcc.ks.gov/estar/ViewFile.aspx?Id=baeb37be-b6f3-42cb-a812-9236b52a11d5