A federal tax credit that has been on Entergy residential customer bills for 21 months will end at the end of 2019. The result of the credit ending will be an increase of about $15 on a typical residential bill. However, rates will remain unchanged in early 2020, according to a news release from Entergy Arkansas.

“We want all of our customers to be aware that the tax credit of nearly $230 million that has been returned to residential customers since April 2018 ends this month. Bills will return to levels very similar to March 2018 before the credit was applied,” said Michael Considine, vice president of customer service. “It’s important to note that this tax credit roll-off is not a rate increase. However, because the credit ends, this will affect bills going forward.”

In December of 2017 the United States Congress passed the Tax Cuts and Jobs Act. The new law lowered the federal tax rate of 35 percent to 21 percent, which resulted in Entergy Arkansas crediting customers’ bills with the goal of returning to all customers nearly $500 million in accumulated deferred income tax. For residential customers, the total amount to be returned was nearly $230 million.

Entergy Arkansas proposed at the time, and the Arkansas Public Service Commission agreed, that it would be in customers’ best interest to spread the credit for residential customers over a 21-month period, from April 2018 through December 2019. The result was a monthly credit of approximately $15 per 1,000 kilowatt hours. A typical residential customer consumes around 1,000 kilowatt hours (kWh) a month. Consuming more than 1000 KWh would result in a larger credit.

Additionally, pending approval by the Commission, a nominal true-up of $0.91 per 1,000 kWh will be on residential bills for 12 months beginning in January. The reason for this is: over the previous 21 months, the company returned approximately $7 million more than the $230 million authorized. The true-up will account for the $7 million excess credit.

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