Oregonians urge public takeover of Enron unit

Ratepayers of Portland General Electric (PGE) are so fed up with the thievery by the utility’s parent company, Enron, they are demanding that the State of Oregon take over PGE and run it in the public interest.

“The only way we will get a public utility system that operates in the public interest is to give it to ourselves,” Lloyd Marbet, a veteran consumer activist, said in a brief interview with the World.

Marbet, on his way to another in a series of public hearings by the Oregon Public Utility Commission, said standing-room-only crowds have greeted calls for public ownership of PGE, which serves 700,000 customers in the Oregon’s Willamette Valley.

Lisa Melyan, a water commissioner of the Tualatin Valley Water District, told the hearing there’s no question that a publicly owned power system “is in the best interests of the citizens.”

Stephanie Andrus, a state assistant attorney general who is working on Northwest Natural Gas Company’s proposal to buy PGE, said Article XI-D of the Oregon Constitution confers the power of eminent domain for state takeover of utility companies.

Enron is asking $3 billion for PGE which it bought in 1997. It has since used its control to jack up electricity rates by 50 percent.

Over the past four years, PGE collected $357 million in federal taxes from its customers and sent it to Enron headquarters in Houston. Instead of forwarding it to the IRS, Enron simply pocketed the money.

Over those same four years, Enron reported $2.68 billion in profits, but paid no federal income taxes in the last three years.

Marbet said this tax swindle “is another part of the problem of private corporations owning public utilities and natural resources.”

A report by Citizens for Tax Justice titled “Less than Zero: Enron’s Income Tax Payments, 1996-2000,” reveals that Enron received a net tax rebate of $381 from the federal government in those four years despite its billions in reported profits. CTJ said that, based on the statutory corporate tax rate of 35 percent, Enron’s taxes during that period should have totaled $625 million.

“But the company was able to use tax benefits from stock options and other loopholes to reduce its five-year tax total to substantially less than zero,” the report said. “Among the loopholes used was the creation of more than 800 subsidiaries in ‘tax havens’ such as the Cayman Islands.”

Enron also was slated to receive an additional $254 million in tax rebates under the “stimulus plan” once proposed by the House of Representives that would have rewarded 16 major corporations with $7.4 in rebates by retroactively repealing the alternative minimum tax on corporations.

In 1997 the Oregonian reported that Enron was seeking another form of corporate welfare by worming its way into the federally-owned Bonneville Power Administration and its system of enormous hydroelectric dams on the Columbia River.

Richard D. Kinder, then Enron CEO, hailed a decision by the Federal Energy Regulatory Commission (FERC) that compelled public utilities to allow Enron, Duke Power, Dynegy, and other private energy corporations to use their transmission lines and “step-down” stations to carry their power.

“The FERC has created a level playing field,” Kinder exulted, “ensuring equal access to the transmission system … ensuring that utilities do not discriminate in favor of their own electricity sales.”

But others saw it differently – that by leeching on the power grids of public utilities Enron and other privately utility companies were “socializing the costs” while “privatizing the profits.”