Utility Reform Project
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Utility Reform Project

Daniel Meek, attorney
10949 S.W. 4th Avenue
Portland, OR 97219
(503) 293-9021


November 1, 2005

Lawsuit Forces PGE to Stop Charging
Ratepayers Phony “Multnomah County
Business Income Taxes” It is Not Paying

In response to a class action lawsuit filed against Portland General Electric Co. (PGE) in February 2005, PGE has decided to remove a charge from all of its electric bills to customers in Multnomah County. That is the charge labeled "Multnomah County tax," which PGE claimed to represent the Multnomah County Business Income Tax (MCBIT) it was paying to Multnomah County. In fact, while PGE has charged ratepayers in Multnomah County over $7 million for this "tax" since 1997, PGE in fact has paid less over that entire period than a total of $4,000 to Multnomah County for the MCBIT tax, and its parent Enron has apparently paid nothing at all.

PGE says it is removing the charge as of October 14, 2005.

"If you are a PGE customer, take a look at your next bill. If you see `Multnomah County tax' at the end of it, give us a call," said Linda Williams, one of the attorneys who filed the class action suit against PGE for imposing the phony income tax charges.  (503-293-0399)

PGE also agreed to repay a unspecified amount of the past phony “Multnomah County tax”tax charges to ratepayers. PGE claims that it is legally liable only for the past 3 years, but attorneys for the ratepayers contend that PGE must repay the amounts collected for at least the past 10 years (over $7 million), with interest. PGE wants to ask the Multnomah County Circuit Court to define its refund obligation.

The court action was put on hold for 3 months, while PGE ran to the Oregon Public Utility Commission (OPUC), where it tried to obtain an order that it could keep the money and continue to impose the MCBIT charges on ratepayers, even though PGE is not paying the tax. On October 6, however, the OPUC ruled against PGE. The declaratory ruling PGE requested was that the OPUC rules somehow required PGE to charge Multnomah County ratepayers for the MCBIT that it never paid. In OPUC Order No. 05-1064, the Commission concluded that its rules do not require this. The order noted that Qwest, the phone company, ceased charging its customers for MCBIT, and in fact made refunds to customers, “when it began filing its taxes on a consolidated basis with its parent company.” PGE was consolidated with Enron in every year since 1997, except for 2002.

This lawsuit is just a part of the efforts of the Utility Reform Project (URP) to stop utilities in Oregon from charging ratepayers for "income taxes" that in fact the utilities are not paying. The MCBIT tax is only a small part of that. The attorneys have filed a similar class action suit against PacifiCorp, alleging the same practice of charing Multnomah County ratepayers for MCBIT that in fact the utility did not pay.