ETO - Keep it or toss it? That is a question that needs an answer. The BB hits another home run.

Your pain is the Energy Trust’s gain

Bend Bulletin

Published: January 26. 2011 4:00AM PST

Pacific Power customers scrambling to work this year’s double-digit rate increase into their electricity budgets should be sure to set aside a little extra for the tax man, better known as the Energy Trust of Oregon. Their pain is the Energy Trust’s gain.

Most people know the Energy Trust as the government-created nonprofit that conducts free home-energy audits. Of course, nothing the Energy Trust does is really free. But many of the people footing the bill know little about the trust or, we suspect, its claim on their hard-earned money. So here’s a little history.

Back in 1999, the Legislature told the state’s two big utilities (Portland General Electric and PacifiCorp, which operates in Oregon as Pacific Power) to apply a 3 percent charge to all retail electricity sales. This charge is merely a tax by another name, and the money it generates is used for a variety of purposes. Some goes to education service districts to make schools more energy-efficient. Some pays to weatherize low-income housing. But most, almost 75 percent, of the so-called “public purpose charge” goes to the Energy Trust, which uses the electricity tax revenue to fund energy conservation programs and subsidize renewable energy projects.

The tax revenue that flows through the Energy Trust’s hands is significant. During the 18-month period from January 2009 through June 2010, the trust’s portion of the electricity tax amounted to nearly $86 million, or roughly $57 million per year. Among the projects subsidized with that money, according to a December 2010 Energy Trust report, are numerous wind generation facilities, solar installations and, last but not least, a project that collects methane percolating through the Douglas County landfill.

The trust’s funding mechanism ensures that Oregonians will continue to pay for more of the same — lots more. When you receive a fixed percentage of an ever-rising number, as the trust and its electricity-tax partners do, you collect more and more money whether you need it or not. Thus, while Pacific Power had to make a case to the Public Utility Commission for the rate increases that kicked in last month, the Energy Trust automatically capitalizes on Pacific Power’s work. You know, kind of like a parasite.

PUC spokesman Bob Valdez acknowledges that “as retail bills go up, the share that goes to the Energy Trust for energy conservation ... goes up as well.” But he says the “Legislature did that so it would keep track with inflation and also accommodate a growing number of customers and ... be there for any emerging technology that might come up.”

Maybe so. But it’s hard to believe lawmakers back in 1999 supported the weirdness at work today. One of the justifications for Pacific Power’s recent hikes is the cost of “green” power, which Oregon’s renewable portfolio standards require utilities to provide. Thus is the high cost of Oregon’s renewable energy mandate forcing Oregonians to pay more money to a nonprofit that subsidizes ... renewable energy.

But it gets crazier still. Last September, the PUC allowed Pacific Power to apply a 1.7 percent surcharge to electricity bills in order to pay for the removal of several dams. The electricity tax applies to that portion of Oregonians’ electricity bills, too, says the PUC’s Valdez. Thus, must Oregonians pay the Trust more simply because they have to cough up money to help fish. One environmental tax begets another.

Fortunately, the burden imposed by Oregon’s electricity tax can also be a great opportunity. It all depends on the willingness of lawmakers to help taxpayers despite the certain objections of environmentalists and organizations that feed on electricity tax revenue. Lawmakers who do respect taxpayers should ask, first, whether the Energy Trust has become obsolete. It seems to us that the proliferation of subsidies and mandates supporting efficiency and renewable energy are quickly making it so.

Moreover, the trust’s funding mechanism forces Oregonians to pay an environmental tax on other environmental taxes. They must pay twice, for instance, for the state’s renewable portfolio standard. They pay once in the form of higher electricity costs and once again in the form of increased electricity-tax contributions.

Well, here’s an opportunity for lawmakers to prove that they can cut expensive programs that have outlived their usefulness. Better yet, by doing so they can pat themselves on the back — with justification — for doing something to moderate electricity costs that their own policies are driving skyward.