MidAmerican Energy Co. plans to pass its $42 million federal tax break to customers.
The Des-Moines based MidAmerican said the average residential customer in Iowa would save $20 a year on an electric bill and $10 a year on natural gas under a proposal submitted to the Iowa Utilities Board, or IUB. IUB must approve the plan.
In the IUB filing, MidAmerican proposed to return 100 percent of the savings to residential, commercial and industrial customers. If approved, Iowa customers would see monthly credits for the next year beginning with the May bill.
"A big part of the tax reform is the corporate income tax rate changing from 35 to 21 percent," said MidAmerican spokeswoman Tina Hoffman. "That is what the $42 million represents, with 100 percent going back to the customers."
The company expects to distribute $33 million on electrical bills and $8.8 million on natural gas bills. The total also includes annual savings for commercial and industrial consumers: $75 in electricity, $25 in natural gas for commercial customers and $8,000 in electricity, $175 in natural gas costs for industrial customers, she said.
In addition, Hoffman said MidAmerican expects to save another $40 million to $50 million in 2018 from other tax-related benefits including new provisions related to how companies account for excess accumulated deferred taxes and depreciation. The utility plans to create an account to capture these benefits and use them to reduce the size or need for a future rate case in Iowa.
"That benefit goes to customers in a different way," Hoffman said. "It's not unlike a savings account on behalf of our customers."
In Illinois, where MidAmerican's plan has been approved, customers will begin to see credits this month. Customers there will share in a total of $3.6 million in savings, she said.
The Iowa proposal is in response to the IUB's order, issued Feb. 2, that required rate-regulated utilities file proposals detailing how they would share the tax rate savings realized with utility customers. Hoffman said the utility will continue passing along the tax savings until the next time regulators consider rate changes.
MidAmerican serves serves 680,000 electric and 585,000 natural gas customers in Iowa as well as 85,000 electric and 66,000 natural gas customers in Illinois.