Montana Viewpoint
PPL’s tax protest has created a backlash of political animosity toward the company

March 10, 2003

The recent property tax protest by PPL Montana (incorporated in Delaware and run from Pennsylvania) has had a direct impact on only one county I represent, but it has indirect consequences for all Montanans because it also lowers the stateÕs revenues by $2.6 million a year.

It’s an interesting study in corporate citizenship. Sometime before the November, 2002 election PPL decide that their generating plants were being overtaxed. That was the election, you will recall, when I-145 the “Buy Back the Dams” initiative, was on the ballot. Not wanting to call attention to an issue that might affect that vote adversely, PPL chose to keep quiet about their planned protest.

In fact, they kept quiet until the last possible day to file it. On that day, the Sanders County Treasurer received a letter from PPL stating that they were protesting 81% of their property taxes. It meant that Sanders County suddenly had $1.2 million in tax receipts that they couldn’t use–11% of total county revenues.

You can imagine that caused quite a bit of consternation in the county, what with the county and local school budgets already set, but consternation was trumped by feeling betrayed. PPL has a big dam just outside Thompson Falls, and every elected county official had sided with PPL against I-145. We felt we had been played for suckers.

Just how much are those dams worth, anyway? The Montana Department of Revenue (DOR) had them appraised at $335 million, and the Buy Back the Dams folks allowed that would be a fair price to offer PPL. But David Hoffman, a PPL spokesman, said that they were worth far more than the DOR appraisal.

So, how much was that? The DOR tried to get a sworn statement from Hoffman, but the company used what legal means they could to put the interview off. They stonewalled until Election Day, when the DOR attorney received an affidavit from Hoffman saying in essence: “I don’t know how much they are worth now, I didn’t know how much they were worth then, and I have never known how much they were worth.”

Well, not only did PPL decide they were worth a lot less than Hoffman intimated they were, they thought they were worth a lot less than the DOR did - at least 80% less. It seems that they’re worth more than $335 if you’re selling, and less than $67 million if you’re paying taxes on them.

You would think that a company would want to stay on the good side of elected state officials, especially in areas where the company does business, so you have to hand it to PPL for guts or stupidity–whichever. They managed to terminally annoy some State Senators who had dams in their counties. Oddly enough, five of those senators are members of the Senate Taxation Committee, and two other members of the Committee have PPL power plants in their counties. Now, seven out of the eleven members on Senate Tax are not overly happy with PPL, including Senator Mike Taylor, R-Proctor, who is probably the most pro-business senator in the state.

In response to the PPL treatment, the President of the Senate, Bob Keenan, R-Bigfork, introduced a bill to double PPL’s property tax rate. Other Montana utility companies, none of which have any warm feelings for PPL either, are conspicuously absent from the PPL defense team. PPL’s response to the bill was to bus employees from Billings and Bozeman to stage a protest rally in the Capitol, where they inveighed against the legislature. That was, at least from a corporate relations standpoint, exactly the wrong thing to do.

When or how this will be resolved no one knows. Both PPL and the state are determined to stick to their respective positions. But if PPL thinks they are being punished for protesting their taxes, they’re wrong. They have shown a lack of consideration for their hosts and neighbors, the people of Montana, that borders on contempt, and they are about to reap what they have sown.

Jim Elliott
Phone: 406-444-1556
Mail: State Senate Helena, MT 59620