Shine the Light on Utility Taxes!

by Britt Storkson

Have you looked at your phone bill lately?

Taxes on my phone service now are running at about 24%.

After a multi-year battle with our local electric power utility to get illegally installed power lines on my property removed I did some checking into the power utility itself.  The power company Wasco Electric Co-operative, Inc. legally is “owned” by its investors or “members” (those who buy power from the utility) but I discovered that, for all practical purposes, Wasco Electric Co-op is owned by a Bend lawyer and the more trouble he makes the more money he makes.

That experience prompted me to check out other utilities and I discovered that while utilities have traditionally been operated “at cost”…meaning that whatever it cost to provide the utility (water, sewer, power, phone, etc.) that’s what the ratepayer would pay.

Not anymore.  Have you looked at your phone bill lately?  Taxes on my phone service now are running at about 24%.  Utility companies not only provide phone service for the customer but also collect taxes from that same customer.  Not only that but there is at least one tax that the phone company collects that they are prohibited by law from even reporting on the bill.

This is the perfect scheme because most utilities are State-sanctioned monopolies with their rates controlled by the State so the utility companies are more than happy to serve as tax collectors in exchange for higher utility rates.  Being monopoly utilities they have a captive customer base so if you don’t like what you’re getting you get your power or water or phone turned off.  The utility company can also play the part of the “villain” instead of the politicians who are actually responsible for all of this.

Utilities often collect more than actually needed to provide the utility service and divert the excess money to any number of other areas having little or nothing to do with providing the utility.  Pacific Power, Portland General Electric and Northwest Natural Gas impose a 3% tax that is used for “grants” that go towards the purchase of energy saving equipment to customers who “qualify”.  This grant money goes to most anybody they determine to “qualify” – even to the very wealthy who can easily afford these improvements.

When checking a contract legal language it’s often what they don’t tell you that’s problematic – not what they do tell you.  With that in mind it is noteworthy that there is nothing in the law preventing utility companies from spending the money collected in fees on anything they so desire.

So when the politicians learn that they cannot impose new or higher taxes on the citizens they don’t just go away.  They simply go somewhere else and monopoly utilities are simply one more way to get money for certain people and programs.

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