Alaska Power & Telephone ratepayers will likely receive a small refund if the power company complies with an Aug. 24 Regulatory Commission of Alaska order to refund its rate payers.

The commission considers $452,000 of AP&T revenue refundable after the Tax Cuts and Jobs Act of 2017 was signed into law last year. The Act reduced the amount AP&T owed in corporate income taxes—a variable the company uses when setting annual rates. The Act included a reduction of corporate income tax from a maximum of 35 percent to a 21 percent flat rate.

Utility companies estimate their revenue requirements and adjust their rates accordingly. The commission regulates utility companies to ensure their revenue requirement is an amount necessary for the utility to cover its financial obligations associated with providing safe, reliable service to customers, along with earning a reasonable return, said commission consumer protection and information office media liaison Grace Salazar.

“The current rates charged by [AP&T]) were established using a revenue requirement based upon the expected need to pay the higher tax rates in effect before the enactment of the 2017 Tax Act,” a commission order to AP&T says.

The RCA held a hearing with AP&T officials in June to investigate whether the company’s rates were reasonable given the reduction in taxes. AP&T representatives said other cost increases offset that additional revenue and argued its actual return was $8,565, according to commission documents.

The commission, however, found it to be “uncontested” that the Tax Act caused a $452,000 reduction in its revenue requirement and issued the order.

The commission looked into the revenue requirements for all for-profit utilities in Alaska and requested information on the effects of the new tax cut.  Among those sent the letter were [AP&T], Alaska Electric Light & Power Company, TDX North Slope Generating Inc., Golden Heart, College Utilities Inc., and ENSTAR Natural Gas Company, Salazar said.

Alaska Electric Light & Power Company and ENSTAR have already reduced their rates to reflect the updated revenue requirements.

APT&T serves roughly 8,000 customers in Tok, the Upper Lynn Canal and Prince of Wales Island. AP&T did not respond to a request for comment by press time.