Private water utilities have been provided a tax refund due to the Tax Cut and Jobs Act of 2018, but Global Water’s Maricopa customers aren’t getting the full amount they deserve. Their tax savings have been reduced to only a one-time bill credit for the tax credits of their January through September 2018 bills.
The plan approved by the Commission after Commissioner Olson’s amendment is that the rest of the tax credits will be provided over a period of four years as the new, higher rates for Global Water are phased in over an eight-year phase in that started a few years ago. Commissioner Olson authored the amendment that puts off the rest of the credits until after the next water rate case for the Global Water’s Palo Verde Utilities, which his amendment also prevented from occurring in 2019. Commission staff had recommended that Global Water return for a rate review because the staff believed Global Water is over-earning. Staff believes that the rates are going to be so high that consumers won’t be able to afford them.
Olson’s amendment also allowed Global Water to continue to pass through its income taxes to ratepayers, which was one of the issues recently reversed in the ongoing Johnson Utilities scandal. No other water company regulated by the Commission is being allowed to do this. Sandra Kennedy asks, “So why are the customers of Global Water paying the taxes for their parent company ?” Olson’s amendment also only reduced the amount of taxes being passed through from 35% to 21%.
Sandra Kennedy noted, “I see Commissioner Olson and RUCO (Residential Utility Consumer Office) making the same mistakes as in the Johnson Utilities tax scandal, but this one will be even worse. I think the ratepayers should have that money in their own pockets now instead of over four years while the Commission decides about Global Water’s Palo Verde Utilities rate issues. And why do these customers have to pay the taxes of a water company when the Commission supposedly ended that practice?” There are more complications regarding this issue: Global Water’s parent is a C-corporation and is not regulated by the Corporation Commission, but Global Water is an LLC and is regulated by the Commission.
“There is a disturbing trend I have noticed about this Commission letting utilities keep money that belongs to ratepayers as possible rate increases and decreases, as well as future infrastructure investments are considered, rather than leaving the money in customers’ pockets while these decisions are being made. “ added Kennedy.
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