Duke Energy Paid Less Than Zero in Federal Taxes
Nation’s Largest Electric Utility Among Biggest Winners Under Trump Tax Cut
WASHINGTON – The nation’s largest investor-owned electric utility – which is seeking huge customer rate hikes, making puny investments in renewable energy and emitting vast amounts of pollution that worsen the climate crisis – paid less than zero in federal taxes in 2018.
In a new report on the impact of President Trump’s tax cuts, the Institute on Taxation and Economic Policy, or ITEP, said Duke Energy’s effective federal tax rate in 2018 was minus 21.4 percent on more than $3 billion in revenue. In effect, U.S. taxpayers paid $647 million to the North Carolina-based utility, which serves 7.7 million customers in six states. Out of 91 corporations that ITEP found paid no federal taxes in 2018, Duke ranked 15th, with what is by far the largest windfall of all U.S. utilities.
The Trump tax cuts lowered the corporate tax rate from 35 percent to 21 percent, but by exploiting deductions and loopholes, the largest corporations consistently pay far less, if anything. The tax cuts have swelled the federal budget deficit by 50 percent since Trump took office, according to The New York Times.
ITEP calculated the difference between what Duke would have owed under the 21 percent rate and what it actually paid. The utility’s 2018 tax break totaled $1.28 billion.
“Although Duke’s customers, including millions of middle- and low-income working families, pay their fair share of taxes, this multibillion-dollar utility pays less than zero,” said EWG President Ken Cook. “Customers – and state regulators and legislators – should remember that the next time Duke tries to pile up more profits on the backs of its customers with rate increases to pay for pollution cleanup, greater dependence on fossil fuel or extended use of aging nuclear power plants.”
In Indiana, Duke is asking regulators for a $400 million rate increase. In North Carolina, legislators recently denied Duke’s bid for a blank check worth more than $20 billion to pass on to customers the cost of upgrading infrastructure and cleaning up toxic coal ash.
Duke runs six uneconomic nuclear power plants in the Carolinas, for which ratepayers are paying both construction and maintenance costs. In 2014, Duke charged Florida ratepayers more than $1.5 billion for a nuclear plant that it never finished building, according to a report by Integrity Florida, a nonprofit watchdog.
Duke is the single biggest emitter of carbon dioxide of any U.S. electric utility, releasing more than 66,000 tons of CO2 pollution from its coal- and gas-fired power plants in 2017 alone. Its natural gas plants also release methane, a far more potent greenhouse gas than CO2.
This year, EWG published results of a year-long investigation into Duke that dubbed the company “Public Energy Enemy No. 1,” citing its puny investments in renewable energy, its schemes to penalize customers who want to go solar, and its record of heavy air and water pollution.
Duke was not the only major utility to pay less than zero in federal corporate taxes. Xcel Energy, Dominion Energy, American Electric Power and First Energy also took full advantage of the loopholes in the new tax law.
“It’s disgraceful that Duke pays less in federal taxes than a teacher in North Carolina or Indiana, while seeking to jack up their electricity rates,” said Cook. “This is the latest example of Duke’s greed for profits over the environment, public health and fair treatment of its own customers.”
The Environmental Working Group is a nonprofit, non-partisan organization that empowers people to live healthier lives in a healthier environment. Through research, advocacy and unique education tools, EWG drives consumer choice and civic action.