Privilege tax generated $51.2 million for state last year

Three Tri-City public power electricity producers and providers recently paid more than $9.3 million in privilege taxes to the state.

The annual tax is levied on public power electricity producers and providers for the privilege of generating electricity or providing electricity in the state.

Energy Northwest paid more than $5.3 million, a record for the agency.

Benton PUD paid $2.44 million, and Franklin PUD paid $1.59 million.

Last year, the state collected about $51.2 million in privilege taxes, which accounted for 0.3 percent of all state taxes. The privilege tax was enacted in 1941.

The amount of Energy Northwest’s annual privilege tax is directly tied to the amount of electricity generated at Columbia Generating Station, the third largest generator of electricity in the state. The plant north of Richland produced more than 9.6 million megawatt-hours of carbon-free electricity during 2016, a record for the plant.

“Nuclear energy in Washington state produces a tremendous amount of carbon-free electricity that directly helps the environment,” said Brent Ridge, vice president and chief financial officer, in a statement. “But we also provide tremendous economic benefits in terms of jobs and tax contributions that support families and our communities.”

The public power agency produces electricity at three other generating facilities: Nine Canyon Wind Project, Packwood Lake Hydroelectric Project and White Bluffs Solar Station. Generation at its four facilities totaled more than 9.9 million megawatt-hours of electricity last year.

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.

Here’s how Energy Northwest’s privilege taxes will be distributed: $2.37 million goes to the state school fund and $543,015 goes to the state general fund. The remaining $2.37 million will be divided between jurisdictions within a 35-mile radius of the Benton County intersection of Stevens Drive and Horn Rapids Road, with distribution based on population.

Those within the radius include Benton, Franklin, Yakima, Walla Walla and Grant counties; the cities of Kennewick, Richland, Pasco, West Richland, Grandview, Sunnyside, Prosser, Connell, Benton City and Mesa; and four library and 18 fire districts.

Benton PUD’s $2.44 million includes $820,000 for the state school fund, and $250,000 to the state general fund. In addition, $1.37 million is divided between Benton County, and the cities of Kennewick, Prosser, Benton City, and Richland.

In addition to the privilege tax, Benton PUD paid the following taxes in 2016: $5.45 million to the state for the public utility tax; municipal utility taxes of $4.89 million to the city of Kennewick, $414,000 to the city of Prosser, $123,000 to the city of Benton City, $24,000 to the city of Richland, and other excise taxes of $65,000 to the state.

Franklin PUD paid $1.59 million on June 1. The privilege taxes collected by the state include $536,160 allocated to the state school fund, $163,391 to the state general fund and $889,797 to Franklin County.

In addition to the privilege tax, Franklin PUD paid the following taxes in 2016: $3.31 million to the state for the public utility tax; municipal utility taxes of $4.2 million to the city of Pasco, $376,413 to the city of Connell, $8,363 to the city of Kahlotus, and other excise taxes of $53,527 to the state.

Energy Northwest has paid about $92.3 million in privilege taxes on its electricity since Columbia Generating Station began operating in 1984.

Energy Northwest also paid $73,253 in privilege taxes for electricity produced in 2016 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.

Other taxes paid by Energy Northwest in 2016 totaled more than $8.1 million: sales tax: $7,852,546; leasehold tax: $227,878 (This is a tax on the use of public property by private party. This tax is in lieu of the property tax.); business and occupation tax: $33,447. The 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.