[CFR-Announce] Steve Duin (Oregonian) on Phony Utility Taxes in Rates: Lobbyists and lackeys cripple the Legislature

[Dan Meek]

  Lobbyists and lackeys cripple the Legislature

Sunday, May 15, 2005 *The Oregonian*

T he fate of Portland General Electric -- and the bogus tax collections 
by PGE and other Oregon utilities -- remain so intentionally murky that 
one can't help but think some folks are benefiting from the chaos, 
misinformation and legislative incompetence.

Well, of course they are. Hundreds of millions of dollars are in play. 
The greed and ambition that got Neil Goldschmidt and his posse involved 
and brought Texas Pacific to our door hasn't dissipated in the least.

That brings us to the numbing idiocy that is Senate Bill 171.

It's foolish, I know, to complain that most of what moves through the 
Capitol is scripted by lobbyists and industry lackeys, then approved by 
legislators who are thrilled when someone tells them what to do. For all 
I know, SB 171 is no more compromised or cynical than most of what is 
being championed in Salem.

The bill was introduced because the Texas Pacific fiasco highlighted a 
riotous tax scam. With the loving approval of the toothless guard dogs 
at the Public Utility Commission, the regulated utilities in Oregon are 
billing ratepayers $180 million per year in state and federal income 
taxes that are never forwarded to the state and federal governments.

PGE, of course, is the worst offender, collecting $92 million in said 
taxes and shipping the booty to Enron, but PacifiCorp and Northwest 
Natural Gas are doing their best to keep up. Dan Meek, one of several 
attorneys in this state who will not let this matter rest, estimates 
those utilities charge ratepayers $75 million more each year than they 
pay to the taxing authorities.

Senate Bill 171 was heralded as an attempt to change all this. 
Unfortunately, the heralds were the utility shills at the PUC, and they 
made sure the bill was a gutless piece of legislation.

A serious attempt to end this tax dodge -- and one proposed by Sen. 
Vicki Walker, D-Eugene -- would simply mandate to the utilities that any 
and all portion of their rates designated as "taxes" must be paid to the 
proper taxing authority. Obviously, this would apply to both state and 
federal taxes because the issue is utility rates, not taxes.

SB 171 has a different aim: It only prohibits public utilities from 
filing consolidated state returns, which -- notes Portland attorney Ken 
Lewis -- they don't do anyway. There's nary a word about the inclusion 
of bogus tax charges in the utility rates. "By not saying expressly that 
the practice shouldn't continue," says Ann Fisher, who counsels the 
Business Owners and Managers Association, "the Legislature is tacitly 
encouraging it to continue."

Small wonder, Sen. Rick Metsger, D-Welches, says, that every time he 
looks up, he sees "utility lobbyists smiling in the back of the room." 
This is the perennial imbalance in Salem: Industry lobbyists are better 
at their job, funneling profits to their bosses, than legislators are at 
theirs, protecting our interests.

Because those lobbyists also control campaign contributions, most 
legislators don't mind playing the gracious loser.

That said, this tax scheme "is a watershed issue," Metsger says. "You're 
talking hundred of millions of dollars. When you start messing with 
something they (the utilities) count as a cash-cow revenue stream, 
they're going to push and push very hard. But I still believe we can do 
this. We need to make a commitment, a commitment that we're going to end 
this scam."

To that end, Metsger has scheduled a meeting Monday with some creative 
thinkers, including Meek and Jason Eisdorfer of the Citizens' Utility 
Board, to pound out a "strategy to deal with state and federal utility 
tax collections and payments that better protect ratepayers from abuse."

He has purposely not invited the PUC or those giggling utility lobbyists.

What conclusion should we draw if such an effort collapses? "The 
conclusion," says Walker, "is that we didn't get our job done. This 
really is a travesty on Oregonians. It's a complete rip-off. We need to 
fix it. That's what we're sent here to do, to fix these problems."

Over the lobby's dead body, of course.

Steve Duin: 503-221-8597; Steveduin at aol.com; 1320 S.W. Broadway, 
Portland, OR 97201


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