DATE: Saturday, September 27, 1997          TAG: 9709270447

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY AKWELI PARKER, STAFF WRITER 

                                            LENGTH:   48 lines

ELECTRIC BILLS USED TO BOOST VISIBILITY OF STATE TAX

Don't be surprised when you see an unfamiliar addition to the electric bill next month.

It's just the state gross receipts tax - a tariff that utilities pass on to their customers.

No need to be ``grossed'' out - customers have always paid the tax, they just haven't seen it before because it was rolled into the overall charge for electric service.

The State Corporation Commission, which regulates electric utilities in Virginia, recently asked the state's five electric companies and 13 electric cooperatives to show a line item presentation of the gross receipts tax on customers' monthly bills.

Across the country, state and local governments are wringing their hands over the possible effect of electric industry restructuring on tax revenues since utilities are major contributors to government purses.

The gross receipts tax gives the state 2 percent of what utilities make. Customers of Richmond-based Virginia Power - which serves Hampton Roads - pay 1.8 percent due to a tax break the company gets for buying Virginia coal for its power plants, said company spokesman Dan Genest.

Virginia Power was the state's biggest taxpayer last year, coughing up $188.7 million in state and local taxes. That includes $75.4 million in state gross receipts taxes.

In a competitive power market, however, out-of-state companies could sell power to Virginians and potentially avoid Virginia taxes.

Without that tax money, say critics of rapid deregulation, state-provided services would suffer.

A task force of the General Assembly subcommittee is looking at ways to stem those potential tax revenue losses.

``Providing this information on the electric bill will allow citizens of the commonwealth to accurately gauge the tax consequences of any proposals that we consider,'' said Sen. Jackson E. Reasor Jr., D-Bluefield, chairman of a General Assembly subcommittee studying electric industry restructuring.

The panel recommended that the SCC ask utilities to itemize the tax.

Instead of a gross receipts line item, Virginia Power customers will see a statement at the bottom of their October bill.

It will read: ``The State Corporation Commission has asked all Virginia electric utilities to list the approximate amount of state gross receipts taxes that are part of each customer's bill. The amount for your bill is (amount). This charge is always part of your bill and is shown as information only.''

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