The D.C. Public Service Commission yesterday ordered utility companies in the District to cut their rates to customers starting Jan. 1 between 1 and 2 1/2 percent to reflect a reduction in the federal corporate tax rate that goes into effect on that date.
The order will save a typical electric residential customer in the District $10 a year, while the typical natural gas customer who heats with gas will save 73 cents a year and the typical residential telephone user will save $6 a year, local utilities said yesterday.
C&P Telephone Co. was ordered to reduce its revenue by 2.3 percent, or $5.4 million a year, while Potomac Electric Power Co.'s revenue was reduced by about 2.5 percent, or $14.3 million a year.
District of Columbia Natural Gas, a division of the Washington Gas Light Co., was ordered to reduce its revenue by one-tenth of a percent, or $155,000 a year.
Tax revision reduces the federal corporate tax rate from 40 percent to 34 percent starting Jan. 1.
Since utilities pass taxes along to customers in the rates they are charged, they can charge less because of the tax cut.
The Public Service Commission took similar action last year, when the corporate tax rate fell to 40 percent from 46 percent. That action, coupled with yesterday's order, reduces the companies' revenue by a total of $32.6 million for Pepco, by $8.7 million for C&P, and by $556,000 for D.C. Natural Gas.