As Raleigh’s News & Observer reported this morning, a study committee at the General Assembly appears to be in the process of advancing a legislative proposal for the 2015 session that would reverse a controversial Utilities Commission decision from last fall that provided a windfall to big utility companies.
As I explained in the Weekly Briefing last October, the ruling allowed utility companies the option to keep charging consumers for income taxes that the companies no longer paid as a result of recent corporate tax cuts. The ruling was especially controversial in that it came in the form of a direct about-face from a previous 6-1 Commission decision from just months before. In the latter ruling, three new McCrory appointees joined with the Commission chair to overrule the previous decision — a move that sparked bitter dissent from three holdover Perdue appointees.
According to news reports, most companies have not actually been collecting the windfall. Only Dominion North Carolina Power — which serves a swath of northeastern North Carolina — has been pocketing the cash thus far. Nothing, however, would prevent Duke and the other big guys from following suit at some point unless the courts and/or the General Assembly step in.
This brings us back to the Revenue Laws Study Committee which included language in its draft report to the 2015 session reversing the decision yet again — see pages 4-6. This morning’s N&O story — especially the headline (“NC lawmakers to end policy letting utilities overcharge customers”) indicated that the draft report would be adopted today and that the legislature would pass the legislation into law.
A closer look, however, shows that such an optimistic take may well be premature.
This is because of the simple and hard reality that the power of utility company lobbyists remains near or at an all-time high on Jones Street. In other words, it’s all well and good for a group of legislators to pass a recommendation that slaps down powerful utilities and their regulator allies, but it’s quite another for the entire General Assembly and the Governor to turn that recommendation into law.
Maybe Duke Energy, et al. have already resigned themselves to this change and allocated the lost potential revenue stream to corporate image burnishing. If so, the proposal might well sail through without objection. If not, however, proponents of the legislation would do well to keep their eyes peeled in the weeks and months ahead for backroom legislative monkey business.
(Note: This post has been updated. The initial version reported in error that the final committee report had not been adopted today. This was incorrect.)