The Governor has signed SB 967, which repeals SB 408 (2005), thus restoring the system that allowed regulated electric and gas utilities in Oregon to charge ratepayers over $1 billion for for phony "income taxes" that the utilities actually did not pay. SB 967 repeals the prohibition on utilities' charging ratepayers for "income taxes" that the utilities in fact do not pay.

The Utility Reform Project, Independent Party of Oregon, Oregon Progressive Party, and many Oregon citizens asked the Governor to veto SB 967.

Governor Kitzhaber has until Wednesday (tomorrow) to sign or veto SB 967, which abolishes ratepayer protection against phony income tax charges.

David Cay Johnston, the Pulitzer Prize-winning former financial writer for the New York Times, called this specific bill:

SB 967 repeals a 2005 law (SB 408) that prohibits regulated utilities from charging ratepayers for federal, state, and local "income taxes" that in fact were not paid to any unit of government by the utility.  Senator Vicki Walker (D Eugene), the primary sponsor of the 2005 law, stated at its enactment:

For several years, the large electricity and gas utilities regulated by the Oregon Public Utility Commission have been charging to Oregon ratepayers hundreds of millions of dollars for "state income taxes" and "federal income taxes" that in fact have not been paid to any government. Currently, the best available estimate of these charges to Oregon ratepayers is $150 million per year."

Between 1998 and 2006, Portland General Electric (PGE) charged Oregon ratepayers over $750 million for such never-paid income taxes.

The OPUC Commissioners fully supported these phony charges, and SB 967 allows this outrageous practice to resume.

For additional information to include in your message, see the IPO Letter to Governor Kitzhaber and the Dan Meek Testimony to the Legislature.

Legislators scrap law on taxing ratepayers

A new bill readdresses the taxes that utilities actually pay versus the taxes they pass on to their customers

Note: This article is not available online at The Oregonian.

By TED SICKINGER
May 14, 2011

After a six-year fight over a law to prevent utilities from charging ratepayers for taxes that the utilities don't pay, the Legislature has punted the issue back to utility regulators.

Senate Bill 967, passed by the Legislature on Thursday, gets rid of a complicated annual tax true-up that resulted in a surcharge or refund to ratepayers based on whether regulators determined that the utility had overcollected or undercollected from ratepayers to cover its tax bill. Instead, taxes will go back to being part of standard rate cases. The bill directs the Oregon Public Utility Commission to analyze all tax benefits, liabilities and credits, as well as a utility's corporate structure and tax payment history when setting utility rates.

The bill also directs the PUC to consider the effect of any merger on utility taxes.

The bill, if signed by the governor, effectively kills Senate Bill 408, which was passed in 2005 to protect ratepayers from phantom taxation. OPUC commissioner Susan Ackerman said she believes the new rate case treatment of taxes will achieve the original intent in a cleaner fashion. "We learned so much about the complications of federal tax law that we almost have a different staff," she said. "They will bring that knowledge to bear" during rate cases.

It was the PUC's implementation of SB 408, as much as the law itself, that generated so much controversy in subsequent years. Dan Meek, a Portland area lawyer who was instrumental in pushing the original legislation, said Friday that the original idea was to reduce the PUC's discretion to allow utilities to charge ratepayers for phony taxes. The PUC opposed the bill, he said, then sabotaged the law by adopting a methodology to calculate utilities' tax liabilities that was neither transparent nor confirm-able.

"What this bill does is once again give the PUC discretion to allow utilities to charge ratepayers for phony income taxes," Meek said. "I don't see any reason to expect them to be any different than they were in 2005 and earlier. This is a victory for utilities and a defeat for ratepayers."    Read more ...

The U.S. House of Representatives Democratic Caucus today adopted a resolution by Rep. Peter DeFazio that will stop the Obama tax giveaway bill from going to the floor of the House for a vote. DeFazio appeared on the Oregon ballot this year as the candidate of both the Progressive and Democratic parties. According to The Hill magazine:

"We have tremendous concerns about what was given away by the White House," DeFazio told reporters in the Capitol basement after the vote.

DeFazio said the voice vote was "virtually unanimous," with only one or two members expressing dissent.

"We have given our leadership license to force the Senate and the White House back to the table to get a better deal for the American people," he said.

The full article from The Hill is here: http://thehill.com/homenews/house/132885-house-dems-vote-to-reject-tax-c...