POSTED: Monday, May 13, 2013 - 6:02pm
UPDATED: Monday, May 20, 2013 - 1:29pm
Ketk told you last week about Oncor electric’s practice of collecting tax revenue for tax bills that don’t exist.
The low price of natural gas, and tougher regulation of coal fired power plants have helped put the parent company of Oncor in trouble.
And they seem to be using money intended for taxes, to pay the bills.
Let’s start with the fact that Oncor is making lots of money.
Oncor is the part of the former TXU conglomerate that takes care of getting electricity to your home or business.
They handle the sticks and wires.
Meanwhile, their parent company, which used to be TXU, was the object of the biggest equity buyout in US history…$45-million.
And now it’s gone bad. The parent company, now called Energy Future Holdings is hemorraghing money.
When we asked Oncor Spokesman Chris Schein about the tax money they were collecting for taxes they didn’t owe he said…
“What is…what Oncor is doing is we have an account that accounts for those monies. Right now, it’s about $800-million,” Schein said. “And that $800-million will be used…will effectively lower rates in the futures.”
“So, you’re collecting more than you need now to lower rates in the future. How will that work?” we asked.
“The…the…those sums that are not used to pay taxes now, will be used in future rate cases to reduce rates in the future,” he replied.
In other words, he just repeated the statement.
But it turns out, the money is being used to keep the wolf away from the company door.
Moody’s says …. Oncor's robust upstream dividends and tax payments over the next few years will support the parent company's debt obligations.
So, is Oncor collecting taxes that don’t go for taxes, but to pay the debts of its parent company?
Moody’s seem to think so.