Energy Northwest pays state privilege tax

​John Dobken, Public Affairs, 509-377-8369
Anna Markham, Public Affairs, 509-377-8162

RICHLAND, Wash. – Energy Northwest paid nearly $4.8 million in privilege taxes to the state of Washington. The annual tax is levied on public power electricity producers for the privilege of generating electricity in the state.

The amount of the annual privilege tax is directly tied to the amount of electricity generated. Columbia Generating Station, the third largest generator of electricity in the state, produced more than 8.1 million megawatt-hours of carbon-free electricity during 2017.

“A recent study showed Columbia Generating Station’s value to the region, in economic benefits, jobs and carbon-free electricity generation,” said Brent Ridge, vice president and chief financial officer. “These privilege taxes will go directly to supporting the local communities who support us every day.”

The public power agency owns electricity production at four generating facilities: Columbia Generating Station, Nine Canyon Wind Project, Packwood Lake Hydroelectric Project and White Bluffs Solar Station. Generation at these four facilities totaled more than 8.4 million megawatt-hours of electricity during calendar year 2017.

Columbia produced more than 96 percent of the total power generated by Energy Northwest, which is provided at the cost of production to the Bonneville Power Administration for resale to customers in six Western states.

The privilege tax is levied on organizations that enjoy the privilege of generating, distributing or selling electricity in Washington, and is authorized in the Revised Code of Washington sections 54.28.020 and 54.28.025.

Privilege taxes collected by the state on Columbia output will be distributed, as authorized by RCW 54.28.050, RCW 54.28.055 and RCW 54.28.040, with 44.9 percent of the payment – $2.11 million – going to the state school fund and 10.2 percent of the payment – $484,025– going to the state general fund. The remaining 44.9 percent of the total taxes – another $2.11 million – will go to jurisdictions within a 35-mile radius of the Benton County intersection of Stevens Drive and Horn Rapids Road, with distribution based upon the population in each area.

The 35 separate jurisdictions receiving payments within the 35-mile radius of Columbia includes Benton, Franklin, Yakima, Walla Walla and Grant counties; the cities of Kennewick, Richland, Pasco, West Richland, Grandview, Sunnyside, Prosser, Connell, Benton City and Mesa; along with four library and 16 fire districts in the counties receiving payments. Nineteen-point-eight percent of the tax is distributed to counties ($929,329), 20.6 percent to cities ($971,572), 2.7 percent to fire districts ($126,727) and 1.8 percent to library districts ($84,484).

Energy Northwest has paid approximately $97 million in privilege taxes on its electricity generation since Columbia Generating Station began operating in 1984, while generating no greenhouse gas emissions.

A portion of the $4.8 million includes $67,691 in privilege taxes, under RCW 54.28.020, for electricity produced at the agency’s non-thermal electric power producing sites. Those include Packwood Lake Hydroelectric Project near Packwood, Wash; Nine Canyon Wind Project, south of Kennewick, and White Bluffs Solar Station near Columbia Generating Station north of Richland. Fifty-six percent of the taxes associated with the non-thermal generation was distributed to local counties (Lewis - $12,402 and Benton – $25,493), 33.7 percent to the state school fund ($22,834) and10.3 percent to the state general fund ($6,958).

Other taxes paid by Energy Northwest in 2017 totaled more than $17.1 million. They were:

Sales Tax: $16,886,299

Leasehold Tax: $212,094 (A tax on the use of public property by private party. This tax is in lieu of the property tax.)

B&O Tax: $57,471 (State B&O tax is a gross receipts tax. It is measured on the value of products, gross proceeds of sale, or gross income of the business.)

 

About Energy Northwest:
Energy Northwest develops, owns and operates a diverse mix of electricity generating resources, including hydro, solar and wind projects, and the third-largest provider of electricity in Washington – the Columbia Generating Station nuclear power facility. These projects provide carbon-free electricity at the cost of generation – enough reliable, affordable and environmentally responsible energy to power more than a million homes each year. As a joint action agency of Washington state, Energy Northwest comprises 27 public power member utilities from across the state serving more than 1.5 million customers. The agency continually explores new generation projects to meet its members’ needs. In 2016, the Association of Washington Business named Energy Northwest Employer of the Year.