Who's Got the Power

[May 11th, 2005] Enough!

As if we needed any more evidence that the end is nigh and that time has stopped, consider the paradox blowing the Nose's mind right now.

1) Kevin Mannix is making sense!

2) The Democrats in Oregon's Legislature-particularly in the Senate, where they run the show-are acting like they left their spines in storage somewhere near Winnemucca.

The issue that has re-arranged the cosmic order? The question of whether utilities should be able to charge ratepayers for taxes...and then not actually pay taxes.

The basics: Everyone who pays for power shells out to cover the taxes the utilities are supposed to pay. And the power companies make out like they put $2 on Giacomo to win the Derby. Enron, the ghost ship that steers Portland General Electric, charges Oregonians about $200,000 per day for taxes. PacifiCorp, which is owned by Scottish Power, tacked over $70 million onto bills to cover taxes last year.

Drum roll, please, for the beauty part. The utilities don't actually have to pay those taxes! You pay your bill, including the tax charge, to a subsidiary like PGE or PacifiCorp. Then the megacorps can claim that losses in other corporate divisions offset the tax bills on their profits.

So here's what Mannix has to say: "Utility rates should be based on taxes a company actually pays, not phantom taxes their parent company pockets." Democrats' response to the Republican governor wannabe? Well, that's a longer story.

Several ideas for dealing with the scam have surfaced during the current run of the Salem Follies. One suggestion: Stop even trying to tax utilities. But backers were told by Senate Dems to forget it-the utilities, political heavyweights all, would never sign on to the death of this most excellent revenue source. Another bill basically took the Mannix position and would have required that utility rates only include taxes actually paid. That bill has been completely mutated-now, all it does is allow a biomass fuel plant on Warm Springs tribal land.

Then there is Senate Bill 171, which hit the Senate floor this week. Originally, the bill introduced by Democrat Rick Metsger sounded decent: Change tax-filing requirements to prevent companies from pulling their tax shell game. However, the poor thing was subjected to ye olde "gut'n'stuff"-its innards were stripped and replaced by toothless language that requires utilities' parent companies, essentially, to do nothing.

Who's to blame for the Senate's wussified approach to the power companies? You could start with Kate Brown, the Portlander who is the Senate's majority leader. Says Metsger of his efforts to stop the tax scam, "I'm surprised by the opposition by some of my own members."

Why do they do it? Depends on how high your Cynicism Alert Index is today. If it's yellow, consider that utilities have always been friendly places for Democrats to drop résumés after their brilliant legislative careers careen to an end. If your dial's at orange, note that PacifiCorp hired lobbyist Alan Tressider, an all-star of the legislative persuasion business who has more Democrats in his pocket than the Spokane mayor has skeletons. If, however, your cynicism cup runneth over, maybe the best explanation is this: In 2005, Salem has become a parliament of whores.

Hold your breath till '06.

CORRECTION: Last week, The Nose stated that the Portland Development Commission awarded two contracts to PR consultant Nathaniel Clevenger "this year." Clevenger's PDC contracts were awarded in 2003 and 2004. The Nose regrets the error.