The R.I. Public Utilities Commission has asked National Grid PLC to recalculate its rate request for gas and electricity delivery based on the drop in the federal corporate tax rate to 21 percent from 35 percent.
It makes sense. If National Grid gets to deduct less in federal income tax on the same amount of revenue, it should not be able to just pocket the difference. Utilities such as National Grid live in an extremely regulated world, with transmission rates subject to approval and profit guaranteed.
If it pays less in taxes, that amount should be returned to ratepayers. And that is especially true given that National Grid has proposed adding $71.6 million to the total amount it collects from gas and electricity customers.
As of press time, it was not clear how National Grid was going to adjust its rates. But Eversource, a utility that serves parts of Massachusetts, already has proposed dropping its rates by a total of nearly $50 million, according to Bloomberg News. National Grid should be paying attention.