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UtilitiesNC Policy Watch followers will recall that last week we reported on a an recent and egregious giveaway to big utility companies in which the North Carolina Utilities Commission pulled a mysterious and unforeseen rabbit out of a hat to reverse its own previous ruling from earlier this year.

The case revolves around whether all of the 2013 tax cuts enacted by the General Assembly and Governor McCrory should be accounted for when it comes to computing the rates that regulated monopolies like Duke Energy are allowed to charge ratepayers. In May, the Commission ruled by a 6-1 vote that they must.

A few months later, however, in an abrupt and apparently unprecedented move, three McCrory appointees to the Commission changed their minds and signed on to a new opinion by the Commission chair, Ed Finley, in which the May ruling was summarily reversed and the “exceptions” (i.e. the appeal) submitted by two of the power companies upheld. Parties in the case were not even given a chance to submit arguments on the question.

According to the new majority, the cut to the state’s corporate income tax should not be factored into rates and companies should be free to keep the windfall if they like. According to the three overruled commissioners:

“The Majority’s decision, rescinding, in part, the Commission’s May 13, 2014 Order in this docket, allows the utilities to charge ratepayers in perpetuity to collect for taxes that the utilities no longer pay. The Majority’s decision errs with respect to fairness to ratepayers; errs procedurally with respect to due process and the limitations of the Commission’s right to rescind, alter, or amend an Order; and errs in its content with respect to its legal conclusions.”

As it turns out now — perhaps because of the adverse publicity here and elsewhere — most, if not all of the big utilities are now saying they will not keep the windfall.

This is good news for consumers but it should not be the end of the story. Even if the utilities are too embarrassed to keep their unearned money, the Commission majority’s heavy-handed action was and is still unacceptable and sets a terrible precedent — both with respect to substance and procedure.

Let’s hope that both the Utilities Commission Public Staff and Attorney General Roy Cooper stick to their guns, appeal the matter to the state judiciary and secure an order vindicating the rights of consumers ASAP.

NC Budget and Tax Center

As our state leaders continue to look for ways to give more and more tax cuts to profitable corporations, these corporations continue to find ways to avoid paying their fair share of taxes. It is a win-win proposition: Heads they win; Tails they still win!

A report released today by the Institute on Taxation and Economic Policy and Citizens for Tax Justice finds that 269 Fortune 500 companies collectively avoided paying $73.1 billion in state corporate income tax between 2008 and 2012. Nine of these multi-state corporations are headquartered in North Carolina and earned more than $51 billion in combined profits during this period.

The nine NC-based multi-state corporations paid an average overall corporate income tax rate of just 3.7 percent, which is well below North Carolina’s 6.9 percent statutory rate at the time. Unfortunately, our state leaders prefer to focus on optics rather than reality. Read More