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<h1 class="red">Meanwhile, who's watching the PUC?</h1>
<div class="byln"><b>Steve Duin</b><br>
Sunday, March 08, 2009
<div><b>The Oregonian</b></div>
</div>
<p>I t's been awhile since I've bothered Dan Meek
and, once again, he doesn't want the attention. The
Portland attorney does his best work -- legal briefs for the
Utility Reform Project -- in the dead of night, and he
considers the courtroom a much more comfortable forum than
this column. </p>
<p>But the truth remains that few people -- not the Oregon
Legislature, not the governor, and certainly not the Oregon
Public Utility Commission -- are working as hard as Meek and
Melinda Davison, the attorney representing industrial
consumers, to (a) save customers of Portland General
Electric and PacifiCorp money, and (b) highlight the PUC
decisions that are costing ratepayers dearly. </p>
<p>Several years back, Meek -- along with Davison, Ken Lewis
and Sens. Vicki Walker, D-Eugene and Rick Metsger,
D-Welches, among others -- sought to end the utilities'
habit of charging customers for state and federal taxes the
utilities do not pay. </p>
<p>Before Enron imploded, PGE shipped $750 million in those
phantom taxes to its parent company. That practice
supposedly ended when the Legislature passed Senate Bill 408
in 2005. </p>
<p>But the architects of that reform continue to protest the
way the bill has been put into practice by the gatekeepers
at the PUC. </p>
<p>Davison has taken two concerns of the Industrial Customers
of Northwest Utilities to Oregon's Court of Appeals.
She is protesting the PUC ruling that allows PacifiCorp --
now a subsidiary of Berkshire Hathaway -- to keep its tax
documents in a "safe room" at its attorneys'
office and severely restrict access for those who want to
check the math. </p>
<p>"We don't believe it's proper for the
commission to put in a requirement that the tax documents
only reside in a safe room, and we can only look at those
documents by going into the lawyers' office at
PacifiCorp while being monitored by a PacifiCorp
employee," Davison said. </p>
<p>ICNU's tax expert, she added, is not allowed to copy
the documents or remove them from the room: "We think
that's outrageous. A 'safe room' does not
allow for meaningful participation in the process." </p>
<p>Davison and ICNU also charge that the PUC's rules for
implementing SB408 are legally flawed because those rules do
not calculate the amount of "actual taxes paid" as
required by the bill. As a result, they believe PGE's
2007 tax report should be thrown out and PGE should not
collect an additional $17.3 million in income taxes from
ratepayers. </p>
<p>Meek has a different argument as to why that proposed $17.3
million surcharge should be rejected. </p>
<p>In the last three months of 2005, Meek said, "PGE
admittedly charged ratepayers $26.5 million more for income
taxes than PGE paid." When Meek argued ratepayers
deserved a refund, the PUC staff reasoned that because the
utility failed to make its authorized rate of return on
investment, no refunds were necessary. </p>
<p>In 2007, Meek notes, PGE had net operating revenue of $180
million, or $37 million more than its authorized rate of
return. And the utility and PUC staff now want to bill
ratepayers for the income taxes it paid on those excess
earnings. </p>
<p>PGE and PUC can't have it both ways, Meek argues. If an
earnings test relieves the utility of repaying income taxes
when it doesn't make its authorized rate of return, a
similar earnings test should relieve ratepayers of further
bills when PGE walks off with a surplus. </p>
<p>"The way the PUC is calculating taxes, it seems that
PGE never has to pay money back," Sen. Walker said.
"Whether PGE is making money or losing money, it's
always ratepayers who are on the book." </p>
<p>Thanks to the PUC, Meek said, "It's heads the
utility wins, and tails the ratepayers lose." </p>
<p>Steve Duin: 503-221-8597; 1320 S.W. Broadway, Portland, OR
97201 <a class="moz-txt-link-abbreviated" href="mailto:steveduin@news.oregonian.com">steveduin@news.oregonian.com</a>
<a class="moz-txt-link-freetext" href="http://blog.oregonlive.com/steveduin">http://blog.oregonlive.com/steveduin</a> </p>
</div>
<br clear="all">
<center class="seccopy">©2009 Oregonian</center>
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