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Wednesday, July 6, 2005

An easy fix

While the City of Portland blows millions, on its way to blowing billions, all in the vain hope of taking over Portland General Electric, two members of the Oregon legislature have dropped in a bill that would eliminate some of the most egregious shenanigans conducted by PGE's former owner, Enron. Here's the press release:

SALEM -- Rep. Greg Macpherson (D-Lake Oswego) and Rep. Jeff Barker (D-Aloha) introduced legislation Wednesday that would require investor-owned utilities to pay the actual amount of state corporate income taxes for which they bill their customers.

"Our legislation says to investor-owned utilities, 'If you collect money from Oregonians to pay your state income taxes, you must pay the state the money you collect,'" Macpherson said. "In the past, some utilities have set rates that assumed much higher taxes than they actually paid. Rather than refund that money to rate payers, they simply kept it. This bill is about truth in utility rates."

Macpherson and Barker developed their bill after a legislative committee considered Senate Bill 408, which tried to address the issue of taxes covered in utility rates and the actual taxes that utilities pay to local, state and federal governments. The Oregon Constitution, however, requires that tax bills originate in the House of Representatives, rather than the Senate.

Macpherson explained that requiring utilities to pay Oregon income taxes on the basis of what they collect from customers would generate substantial additional revenue, possibly tens of millions a year. "Every extra tax dollar that the utilities pay is an extra dollar toward a full school year, home care for needy senior citizens, putting state troopers back on the road, and waging the war on methamphetamine," Macpherson said.

"Oregonians need the assurance that their utility payments go where they're supposed to go," Barker said. "It's just plain wrong if a utility over-estimates its Oregon tax liability, and subsequently over-bills Oregon's customers to cover that liability. It's doubly wrong if that money disappears before it gets to the state."

Barker said his and Macpherson's proposal responds to the experience of Portland General Electric (PGE) during the late 1990's, when the utility billed rate payers to cover its Oregon corporate income taxes. When PGE's parent company, ENRON, sustained losses on other operations, the companies' consolidated tax return showed that the losses offset the taxes owed to Oregon, which meant that they paid only the state corporate minimum tax -- just $10.

Barker's and Macpherson's legislation would apply only to the future, not to the years when ENRON filed consolidated tax returns with PGE. The bill now awaits referral to a House committee.

This is perfectly sane legislation that ought to be passed in, like, 10 minutes. Then the city ought to do what voters told it to do by a more-than-2-to-1 vote the last time a public power takeover was on the ballot in these parts. Namely, give it up!

Let's let PGE become a Portland-based public company again. It would be one of the few we have left!

Comments (5)

A novel concept, but as a consumer (and therefore payor of the additional taxes) I would much rather see legislation that required PGE to kick the extra back to me rather than paying it over to the state.

The funniest/scariest thing about the whole PGE mess is the popularly-held notion that Erik "Water Bureau" Sten and the rest of the Fourth Avenue Midgets are remotely capable of running the company.

I'm with ya on this one, Jack....Let it be a publicly-held company again.

Qwest did the same thing a couple years ago, in terms of not paying City Tax - to the tune of >$20-million.

I remember Willamette Week had a form letter you could cut out and send in with your phone bill. The form spelled out that you-the-bill-payer were omitting the City Tax portion of you bill - the portion which Qwest themselves wasn't paying.

I usually find WWeek annoying in it's preachiness, but that was a darn good idea. And an example of some decent journalism to boot.

Mr Bog, not to be an alarmist/conspiracist, but you know Sam Adams still lunches with Tom Imeson (at least according to his calendar on May 13th http://www.portlandonline.com/adams/index.cfm?c=37871) I was having lunch at Higgns that day also.

This is the Tom Imeson of Imeson Carter (the Goldschmidt is silent.) Maybe another end run at PGE? Sigh, when will this city lose Neil's fingerprints?

To jj:

I would agree that the money staying with the consumer is better than the deception practiced by utilities such as PGE and Qwest, but I believe the law, as outlined, would achieve your goal. This law would encourage Utilities to state correctly their tax obligation, which, if $10, would lead to the savings you desire.

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