Late last Friday an Oregon county circuit court gave preliminary approval to a $10 million settlement among Portland General Electric (PGE) and class action plaintiffs over past disputed rate collections for a county tax. The judge’s approval followed by just two days another Multnomah County (OR) Circuit Court judge’s decision in a similar case to reject PacifiCorp’s motion to dismiss a class action lawsuit seeking to recover millions of dollars that PacifiCorp’s Oregon utility allegedly collected for tax payments but never paid.
Judge John Wittmayer Friday granted the preliminary approval to provide refunds to PGE ratepayers in Multnomah County who were customers of the utility over the past seven years. Now the process of notifying the class members will begin, said Dan Meek, a Portland-based utility consumer advocate and one of the plaintiffs’ attorneys in the case. PGE will insert notices into its bills to current customers, he said.
And as a backdrop to both the PGE and PacifiCorp cases, local news media reported last week that PGE last year sent $88 million to its soon-to-be-estranged parent company, Enron Corp., to fulfill income tax liabilities that were never paid by Enron. Last January, PGE sent another $25 million to Enron, and in April another payment is due, according to a report in the Portland Oregonian.
“Just as in past years, the payments will not reach taxing authorities because bankrupt Enron’s overwhelming losses will offset any tax obligations,” the Oregonian reported, noting that as a result the tax money from Oregon utility customers is destined for Enron’s creditors, the largest of which are becoming the owners of a newly independent PGE utility.
In a circuit court ruling similar to Wednesday’s PacifiCorp action, Wittmayer made a similar ruling late last year regarding PGE’s county tax collections in rates, and earlier this year the utility settled out of court, agreeing to pay Multnomah County retail utility customers about $10 million this year, prompting Friday’s hearing.
With the preliminary approval, the plaintiff notification — a long, costly process — will begin, according to Meek, who noted that this means the plaintiffs’ attorneys will have to pay about $150,000 to meet the class action suit requirements for notifying all current and former PGE customers throughout the West Coast through newspaper advertising. “This is a little known aspect of class action litigation.”
Meek noted that the plaintiffs’ attorneys are also expected to fund about $250,000 for ensuring that all the administrative costs of paying claims are covered. He estimated that in the $10 million settlement, industrial customers on average would get refunds of about $19,000 each; commercial customers would each get about $108, and residential customers are looking at receiving an average of $16.
Meek characterized the latest circuit court decision (in the PacifiCorp case) by Judge Janice Wilson as a victory for the plaintiffs in the class action lawsuit, although there was no decision on the merits of the claims. Wilson rejected PacifiCorp’s dismissal motions on seven of the eight plaintiff claims, each of which would require the utility to at least pay back the amount of money it has charged Multnomah County utility ratepayers for the county business income taxes, Meek said.
In addition, Judge Wilson granted all of the plaintiffs’ 18 motions to compel PacifiCorp to answer discovery requests from the plaintiffs that began their filing last October.
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