PHOENIX — The Arizona Corporation Commission is following through on its promise to pass savings created by the Tax Cuts and Jobs Act to Arizona utility ratepayers. As of August, the effort has totaled $189,088,437.
In December 2017, Federal Tax Reform was passed which lowered the corporate tax rate from 35 percent to 21 percent. This significant change affected all regulated entities that maintain an allocation in their rates for paying federal corporate taxes.
Commissioner Justin Olson led the effort to ensure that tax savings would be returned to customers in an efficient manner. Commissioner Olson opened a docket and held a workshop on the matter in January 2018. The Arizona Corporation Commission was one of the first state commissions in the country to address the changes resulting from Federal Tax Reform. In February, the Commission unanimously ordered all effected utilities make a filing detailing how the tax savings would be returned to the customers.
“I am proud of the work that our Commission has done this year passing the savings of federal tax reform back to the ratepayers,” said Commissioner Olson. “It has not been an easy process for our regulated utilities or for our Commission but passing the savings back to customers is the right thing to do. Although the effort is not completed yet, our Commission has worked diligently to review, analyze and rule on tax adjustment filings from almost every large electric, gas, water and wastewater utility regulated by the Corporation Commission. I’ve been pleased to use my professional background in corporate tax to help our Commission deal with this important issue.”
The Commission has been working on rate adjustments every month since February. At the July Open Meeting, the Commission addressed federal tax adjustments for both Southwest Gas and Liberty Utilities with adjustments made to their revenue requirements of $20 million and $1.9 million respectively. At the August Open Meeting, the Commission addressed tax adjustments for both the Quail Creek and Bermuda Water Companies. The largest tax adjustment occurred earlier this year when the Commission approved a $119 million dollar reduction to benefit APS customers.
About Commissioner Justin Olson:
Justin Olson was appointed to the Arizona Corporation Commission in October 2017. Commissioner Olson began his public service in the Arizona State House of Representatives where he served from 2011 to 2017. During his tenure in the State Legislature, Commissioner Olson chaired the House Appropriations Committee and the Federalism and Fiscal Responsibility Committee. In addition to his public service, Commissioner Olson has extensive experience in the private sector where he has worked as a research analyst and a tax manager. Commissioner Olson currently chairs the Commission’s Tax, Accounting and Finance Committee. Commissioner Olson led the Commission’s efforts to reduce utility rates to account for savings realized by the 2017 Federal Tax Reform.
The Arizona Corporation Commission was established by the state’s constitution to regulate public utilities and business incorporation. The five Commissioners elected to the Corporation Commission oversee executive, legislative, and judicial proceedings on behalf of Arizonans when it comes to their water, electricity, telephone, and natural gas resources as well as the regulation of securities, pipeline, and railroad safety. To learn more about the Arizona Corporation Commission and its Commissioners, visit