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Tax cut drives rebates from SWL&P

MADISON — Residential customers of Superior Water, Light & Power will receive a $31.80 lump-sum credit on July bills as a result of savings accrued from the tax law Congress passed last year, according to an order issued Thursday by the Public Service Commission.

Earlier this year, the PSC ordered the state's investor-owned utilities to make a lump-sum credit by July 31 on customer bills based on estimated tax savings for January through June, and to issue ongoing monthly credits for energy and water usage beginning July 1 until the PSC takes further action or the utility files a new rate request.

SWL&P's last rate increase was implemented in August 2017. It is eligible to file for new rates next year, but Robert Sandstrom, manager of electric operations and customer service, was not ready to discuss that possibility last week.

In December, Congress lowered the maximum corporate tax rate from 35 percent to a flat 21 percent. Utility rates are based on anticipated company expenses, including taxes. When Congress lowered the tax rates, it created a refund situation for utilities as of Jan. 1.

On Thursday, the PSC broke down the credits SWL&P's residential customers will receive by service category — $7.54 for electric, $5.06 for gas, $13.59 for water and $5.70 for public fire protection.

The ongoing monthly credits are based on usage of kilowatt hours of electricity, natural gas therms and cubic feet of water. The ongoing credit for the monthly public fire protection charge is a flat 95 cents.

Customers in all categories will receive lump-sum and ongoing credits for each provided service. The largest electrical customer will receive a $61,807 lump sum credit and other non-residential customers will receive lump-sum electric credits varying from $13.70 to $3,106 depending on customer classification, according to the PSC order.

SWL&P estimated its total customer credits this year at $1.322 million.

Sandstrom said the utility was pleased to refund the overage.

"We want to be able to pass savings back to our customers as soon as we can, and it is nice to have guidance from the PSC as the best way to do that," he said Friday.

Citizens Utility Board Executive Director Thomas Content called Thursday's action, "good news for Xcel customers in western Wisconsin."

"Although Wisconsin wasn't the first state to push savings out to customers ... they waited until they got numbers they had confidence in ... and (customers) will get savings they wouldn't have seen absent tax reform," Content said

In other developments:

* SWL&P recently filed a request with the PSC to replace aging equipment at its Winter Street substation. The utility has a $5.6 million capital budget for 2019 and impact on customers for the project is expected to be "pretty minimal," said Sandstrom, as recovering the project's estimated $3.09 million cost is partly based on its 40-year useful life. The project is located in an industrialized area north of Winter Street and the switch over to new equipment in late 2019 should been done without any customer interruption.

* Outage to SWL&P's customers from the recent Husky Energy explosion was limited to "a few" and service was restored before 11 a.m. the next day, Sandstrom said.

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