Sunday, October 25, 2009

Big Utility Urges Small Businesses To Seek Salvation Army Help To Pay For New "Loan" Scheme Charge

Portland General Electric, a big electrical supplier to the Portland, Oregon with 0ver 99,000 retail business customers has a new revenue raising scheme. In addition to the huge electrical bills that small business has to pay monthly to PGE, which may run hundreds of dollars per month, PGE is now asking for an additional extra payment of $900 as an unspecified "deposit" charge. PGE knows that this extra charge, which is really a form of an "loan" from small business customers is such a high extra fee that in a letter to small businesses, PGE also encourages small businesses to seek financial help from the Salvation Army to pay this extra bill. Outrageous! Small business is supposed to seek Salvation Army help to pay for a business loan to PGE?
Interestingly, PGE does not clearly specify just how little interest they might pay if they decide to return the $900 fee after one year or not. PGE also threatens to disconnect service from any business that doesn't pay by the specified due date. For small grocery stores, this means that all of their milk, meat, cheese and deli items will be destroyed by PGE if you don't subject yourself to their extortion letter demands. All that's missing is the gun and mask. If PGE reconnects service, then they charge extra fees for that. Even if the normal electric bill is paid in full, PGE will still disconnect service if this shocking extra deposit is not paid, because small businesses are disputing this charge.
Since this new charge is really a loan by small businesses to PGE, small businesses should be able to establish the interest rates that they might be paid if PGE decides to refund the payment. If a small business wants 1000% interest on the loan, then they should be able to request it from PGE. Otherwise, PGE should really go to a bank and take out a business loan like any business has to.

The Salvation Army is meant to provide meals and aid to the homeless. However, PGE is abusing this charity to help finance their millions of dollars in profits and CEO salaries. Big companies like PGE want small businesses to seek the same help that the homeless might need in order to pay for their outrageous extra charge.

In the letter sent to small business customers, PGE claims that the claimed "deposit" might be returned in one year along with a tiny interest payment as long as certain conditions are met. Otherwise, PGE keeps the $900. It's like a form of cheap loan to help pay for the lavish lifestyles of the executives over at PGE. And PGE, which claims to be some sort of community involved business wants the Salvation Army to have to help finance this scheme of their. Several years ago PGE only paid just $10 in corporate taxes in Oregon due to a loophole in Oregon law, despite many millions in revenues.

The problem is that with so many businesses struggling right now with the economy, an extra $900 charge is a major burden for businesses with small revenues or tight payrolls. While PGE executives wallow in luxury, and small businesses struggle to stay open, this extra revenue scheme is really a thinly disguised "loan" at the expense of small businesses. PGE can rake in millions of extra dollars this way, then pay a tiny interest one year later if they decide to return the $900 or not.

It is also very unclear exactly what this is supposed to be a "deposit" on anyway. PGE isn't fronting any merchandise to business customers. PGE is instead seeking a deposit on service that hasn't even been yet used or delivered. How can this utility seek a deposit if nothing is provided?

Money-grubbers like PGE are supposed to be regulated by a public utility commission. Yet where is the PUC here? Part of the reason that many small businesses struggle is that they are preyed on by bigger companies like PGE. Rather than PGE seek a normal business loan at normal interest rates it's cheaper for them to collect loans at the expense of small business, and then ask the Salvation Army to pick up the tab. PGE is a real class act.