Oregon Senate Bill 408: The rise and fall of rational law

Steve Duin, The Oregonian
June 26, 2011

Once upon a time, a group of thoughtful and motivated people gathered in the state capitol and conspired to do something good.

They were met with understandable skepticism. Their plan did not cater Oregon's utilities. It did not reward the biggest campaign contributors. It was not carefully scripted by the usual lobbyists.

The lone beneficiaries of this work group? Utility ratepayers.

Between 1998 and 2005, Portland General Electric customers were charged $750 million in state and federal taxes that were never paid to the taxing authorities.

Those millions ended up, instead, in the pocket of Enron, which owned PGE. The scam was incredibly lucrative, and one of the main reasons Texas Pacific employed Neil Goldschmidt and Tom Walsh in its failed attempt to buy the utility.

In 2005, the tax dodge was ended by a group that included Dan Meek, Ann Fisher, Bob Jenks, Melinda Davison and two Democratic state senators, Rick Metsger and Vicki Walker.

They were determined, indignant, inventive. Their solution -- Senate Bill 408 -- ordered utilities to turn over the amount billed as taxes to the government or return that money to the ratepayers.

The fix was so obvious it passed the Legislature on an 84-6 vote. It yielded immediate results.

PGE ratepayers received a $40 million refund. Northwest Natural customers paid $12 million more in taxes because the friendly neighborhood utility earned more than its authorized rate of return. PGE actually began paying state income taxes.

Then your 2011 Legislature came along and blew the plan to hell.    Read more ...