DTE customers have already seen the benefits of federal tax savings through bill credits over the last year. Now, with the approval of plans by the Michigan Public Service Commission to finish refunding those tax cuts, natural gas customers will start receiving additional savings every month.
The plan will place a monthly credit, Credit C, on natural gas customer bills to refund DTE’s savings on deferred taxes. This credit will return just over $12 million to customers annually and more than $330 million over the life of the credit. The credit will start appearing on bills in September.
The Tax Cuts and Jobs Act, which took effect in January 2018, reduced the federal corporate tax rate from 35 percent to 21 percent, a savings of more than $200 million annually across DTE’s customer population.
Those savings were refunded to customers through a series of three bill credits over the last year, with the first credit, Credit A, appearing on bills beginning last summer and based on usage. This credit reflected DTE’s reduced tax rate going forward and was based on each customer’s individual usage. Credit A has now been incorporated into DTE’s regular rates for natural gas and no longer appears as a separate line item on bills.
A second credit, Credit B, also based on usage, refunded excess tax money collected between January and June 2018. That credit ended earlier this summer once funds were fully returned to customers.
The credits are one of many efforts DTE is making to keep natural gas service affordable for customers. New, low-cost natural gas supplies have driven down customers’ cost for natural gas and resulted in a more than 30 percent decline in total bills over the last decade. In addition, DTE’s buying and storage strategy help keep prices stable and supply always available.
As a regulated utility, DTE passes on its cost for natural gas to customers with zero markup, meaning every dollar DTE saves on purchasing natural gas is a dollar that customers save on their cost for natural gas.
To save customers money, DTE purchases gas from across the United States and Canada during the summer months, when prices and demand are lower. This gas is stored in underground reservoirs for future use, allowing DTE to manage the need for purchasing gas during the winter, making prices more stable even during periods of increased demand.