Taxes do not explain lower public power rates

In 1990, approximately 7.7% of the retail revenues of public power systems flowed to state and local governments in the form of tax payments and contributions. The argument is presented that this fact contradicts the notion that retail rates of investor-owned utilities are higher than public systems because investor-owned utilities (IOU's) pay taxes and public systems do not. Many IOU's promote this motion in an attempt to explain why their retail rates are significantly higher. It is concluded that relative tax payments and contributions fail to explain public powers rate advantage over IOU's