Consumer unrest in the face of substantial retail power rate increases over the past 12 months throughout Oregon bubbled to the top last week with stronger calls for a consumer-county government spawned effort to buy Portland General Electric Co. (PGE) from its bankrupt parent, Enron Corp. The proposal envisions rolling back rates and turning PGE into a nonprofit utility. However, none of the local government entities has endorsed the proposal at this time.
A PGE spokesperson said the utility is remaining neutral on the proposal of creating a nonprofit entity, but it has “lots of questions and is in a information-gathering mode” related to the two-month-old effort. At this time, Enron reportedly opposes the idea, citing the utility as one of the soundest businesses the company has, with Portland General cranking out steady profits. There is a process in place through the ongoing Enron bankruptcy for bids to be made for PGE.
Oregon attorney and author of the proposed buyout, Rece Bly, with the Portland-based law firm of Miller Nash, has joined with Goldman Sachs to put together the concept of a purchase. He said he is “in conversations” with the Enron federal bankruptcy proceeding’s official creditors’ committee.
The estimated price is $2-3 billion for Portland General, which serves 1.6 million people in six Oregon counties, three of which have indicated an interest in purchasing PGE and turning it into something akin to New York’s Long Island Power Authority. The buyout proponents are suggesting that Willamette Valley Power be created as a public power utility to serve the current PGE territory.
Two other proposals for more traditional municipalization of PGE have arisen also, but those are opposed by the private-sector utility, a spokesperson said.
PGE questions what would happen to its existing 2,700-member work force, how an entirely new nonprofit utility would fit into the federal power supply structure in the Pacific Northwest headed by Bonneville Power Administration, and what, if any, community support from the public sector entity would be provided.
“We have extensive links to the communities we have been serving for a long time,” said the PGE spokesperson, noting that the long-term reliability of the power service also is a question, given that PGE has consistently been at or near the top in the industry in terms of its reliability, he said.
In the meantime, power rates are in the news throughout Oregon, where some public sector utilities, such as the Eugene (OR) Water & Electric Board, noted late last week that favorable retail and wholesale conditions this year should allow it to pay off last year’s wholesale power price spike earlier than previously anticipated. However, consumers were complaining about the state regulatory decision last Thursday allowing ScottishPower’s PacifiCorp to increase rates $131 million to cover the bulk of its so-far unrecovered 2000-01 wholesale power costs that greatly exceeded retail utility charges in place at the time.
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