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Payments and Contributions by Public Power Distribution Systems to State and Local Governments, 2006 Data Pblic power systems provide a direct benefit to their communities in the form of payments and contributions to state and local government. The total value of the contributions made by the pub- licly owned utilities often comes in many forms and is not always easily recognized. In addition to payments such as property- like taxes, payments in lieu of taxes, and transfers to the general funds, many utili- ties make other contributions in the form of free or reduced-cost se»rices to states and cities. APPA calculated net pa}nnents and contributions for 382 public power utilities in the most current data year of 2006 and determined that the median amount contributed was 5.0 percent of electric operating revenues. In 2006, investor-owtred utilities paid a median of 4.2 percent of electric operating revenues in taxes and fees to state and local governments. It is a common misconception that in- vestor-o~med utilities provide a benefit to the local communities by paying taxes that the publicly owned utilities do not. This report demonstrates just die opposite. When all taxes, tax equivalents and other contributions to state and local government are considered, the median amount con- tributed by public power utilities in 2006, as a percent of elecMc operating revenues, was 19 percent higher than im~estor-owned utilities (5.0 percent vs. 42 percent). (.Overview Public power utilities provide a direct benefit to their communities in the form of payments and contributions to state and local government. Using the most recent data (for 2006), APPA calculated net payrnerfts and contributions for 382 public power utilities for fiscal year 2006 and determined ±hat the median amount was 5.0 percent of electric operating revenues. The payments are property- like taxes, payments in lieu of taxes, and transfers to the general funds. The con- tributions are made in the form of free or reduced cost sen~ces provided to states and cities. Many communities are not fully aware of the payments and total value of con- tributions made by their publicly owned electric urility, and some utilities do not quantify all their payments and contribu- tions. APPA conducted a detailed survey of public power utilities .in order to get a more accurate estimate. The results are presented in this report, which focuses on die "rate" and "type" of payments and contributions made by public power distri- bution utilities. The report includes: • Summaries by revenue size class and region of the country for both publicly owned and investor-owned utilities; • Details on which types of payments and contributions are most common; • .A listing of the tj>pical methods used by utilities to calculate the amount of pay- ments in lieu of taxes or transfers to the general fund of die city. Caution should be used v<~hen mak- ing direct comparisons ~>ith the pre~~ious reports (publis.hed biannually bet~~een TABLE 1 Net Payments and Contributions as Percent of Electric Operating Revenue, 2006 -Publicly Owned Utilities by Revenue Class- Number First Third Revenue of Utilities Median Quartile Quartile Less than $2 ...... ........... 58.............. ........... 4.1............. ...........1.6............ ...........9.1 $2 - $5 ................ ........... 59.............. ........... 5.3............. ........... 2.6............ ........... 8.7 7 $5 - $10 .............. ........... 51.............. ........... 5.0............. ........... 3.4............ ........... 9.3 i $10 - $20 ............ ........... 64.............. ........... 5.1 ............. ........... 2.5............ ...........7.1 $20 - $50 ............ ........... 80.............. ........... 4.5............. ...........2.7............ ...........6.0 $50 - $100 .......... ........... 31.............. ........... 4.9............. ........... 2.8............ ........... 6.5 ;. $100 or more ..... ........... 39.............. ........... 5.6............. ........... 3.1............ ...........6.8 -~ TOTAL 382 5.0 2.6 7.2 Net Payments and Contributions as Percent of Electric Operating Revenue, 2006 Publicly Owned Utilities by Revenue Class e.o% ~.o% s.o% 5.0% a.o% 3.0% z.o% i.o% o.o% 5.3% 5.6% - 40 American Public Power Association • 2009-10 Annual Directory & Statistical Report www.APPAnetorg Lessfhan 52 $2-$5 $5-$10 570-$20 $20-$50 $50-$100 $100 or more Revenue Class (in millions of dollars)