Private natural gas suppliers like Black Hills Energy and Northern Natural Gas will keep more of their profits after the federal tax overhaul that passed last month.
Their customers could benefit, too. But it’s not yet clear how soon that might happen: It could mean lower bills or simply a longer period of time without rate increases.
“They have told us they are interested in giving some money back to the ratepayers,” Deb Collins, spokeswoman for the Nebraska Public Service Commission, said of potential outcomes for Nebraska ratepayers. She said the commission didn’t know any details yet.
The Public Service Commission oversees some utilities in the state. Those utilities must notify the commission about changes in rates.
Building out and maintaining natural gas infrastructure like pipelines is an expensive proposition that frequently requires companies to take on debt to finance the projects.
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Changes in the new tax plan lower the top corporate tax rate from 35 percent to 21 percent, meaning companies like Omaha-based Northern Natural Gas are likely to have more money on hand to finance infrastructure projects if they so choose.
The Berkshire Hathaway-owned company owns and operates the largest interstate gas pipeline system in the U.S., and it hasn’t raised rates it charges to wholesale customers — like Omaha’s Metropolitan Utilities District — since 2004. That shouldn’t change any time soon.
Said Northern spokesman Mike Loeffler: “The tax changes that have been recently implemented will help in further deferring necessary rate actions and will allow Northern to accelerate infrastructure investments.”
Northern supplies a great deal of natural gas to MUD, whose executives say it’s too early to speculate on benefits to ratepayers.
MUD President Scott Keep said he expects some benefit to be passed along to the utility, “whether it’s in the form of a rate reduction or deferral of a rate increase.”
Black Hills Energy and Northwestern Energy have both told state regulators that they plan to pass on some of their tax savings to customers, but it’s not clear how soon those new rates could begin showing up in bills.
Black Hills is the largest natural gas provider with about 300,000 customers in the state, including some in Sarpy County. Northwestern serves 45,000 customers in Kearney, Grand Island, North Platte and Elba.
“We did notify the Public Service Commission that we intend to pass those savings on (to customers) but we don’t know what that looks like at this point,” Black Hills spokeswoman Brandy Johnson said.
This report includes material from the Associated Press.
The Omaha World-Herald is owned by Berkshire Hathaway.