PacifiCorp Files Tax Return that Doesn’t Add Up
Posted on October 20, 2005 by oregoncub
Tags, Utility Regulation
Utilities in Oregon filed tax reports with the Public Utility Commission on Friday, a direct result of the passage of the Utility Tax Reform Bill, SB 408. The PUC has put together temporary rules based upon the tax reform law that should help assure utility customers that they are not overpaying their utilities for taxes that never reach state and federal government coffers.
However, there’s a glitch. As reported in yesterday’s Oregonian, PacifiCorp (dba Pacific Power) has filed a report which “did not comply with the temporary rules.” By choosing a significantly different set of parameters for its tax figures, PacifiCorp was able to reach a number implying that it is customers who will owe more money, rather than the other way around. CUB Executive Director Bob Jenks called the tax report filed by PacifiCorp “meaningless.”
Here’s why:
1) The Public Utility Commission of Oregon regulates Oregon investor-owned-utilities (IOUs)—the utilities don’t regulate the Commission. We feel that it is inappropriate for PacifiCorp to choose not to comply with a clear set of rules set down by the Commission. Bob Jenks said, “In all the years I’ve been at CUB, I have never seen a utility simply not follow a Commission order.” Based on PacifiCorp’s own description of the parameters they used in the letter accompanying their tax report, those parameters do not match what the Commission ordered.
2) It is not clear at this time what methodology PacifiCorp used to reach the numbers they did, because no one has seen the process they used, outside the Company and Commission staff. We need to see the numbers and the process they used in order to adequately understand and critique the end result. However, CUB did an extensive analysis of PacifiCorp finances in their recent rate case which led to the Commission reducing PacifiCorp’s rate increase by more than $16 million to account for over-collection of taxes. We are having trouble reconciling the numbers in that case with the numbers presented Friday.
3) The suggestion in PacifiCorp’s report that customers paid $11 million less for taxes than their parent company paid, should not lead customers to believe that they will be paying $11 million more in rates in the future. We believe that PacifiCorp’s interpretation is at odds with the Commission’s order and the intent of the law. Once CUB and other consumer advocates have had a chance to view the numbers, we think that the numbers will show that tax payments made by customers to the utility were clearly greater than the money paid by the utility to government.
We think PacifiCorp’s actions are inappropriate. We will work to make sure that PacifiCorp complies with the Commission’s orders, to ensure that parties will get to review the data that underlies public assertions, and to establish permanent rules regarding taxes in rates that will serve customers well.
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03/10/17 | 0 Comments | PacifiCorp Files Tax Return that Doesn’t Add Up