Frustration with the electric restructuring process may drivePacifiCorp to sell its service areas in California and Montana -two of the seven states where the company operates. The two statesrepresent about 76,000, or 5.5%, of PacifiCorp’s 1.4 million NorthAmerican customers.

PacifiCorp said the evolving regulatory environment makes itincreasingly complex to do business in seven states where eachstate is expected to develop its own rules and standards forelectric restructuring. “In this newly competitive environment, itis vital for PacifiCorp’s regulated business to focus on thosestates where we have a larger customer base and more significantinvestment in assets,” said Fred Buckman, CEO.

In California, the company serves the far northern portion ofthe state, including the communities of Crescent City, Yreka, Mt.Shasta, Weed, Dunsmuir, Fort Jones, Alturas, Dorris and Tulelake.That amounts to 41,262 customers, or about 0.3% of the state’stotal customer base. In Montana, the company serves primarily inand around Kalispell, Whitefish, Columbia Falls, Big Fork andLibby. It has 34,528 customers, or about 7% of the state’s totalcustomer base. California and Montana customers are served underthe Pacific Power brand name.

“We feel we’ve been pretty hamstrung, quite frankly, byCalifornia’s approach [to restructuring],” said PacifiCorpspokeswoman Anita Marks. “As an incumbent provider, we are notallowed to compete in the state. However, energy service providersare allowed to compete in our service territory.” She said thecompany has had to commit a large amount of corporate resources tothe restructuring taking place in California and Montana while thecompany holds a very small stake in either state. “We are concernedwhether we have enough influence to really have a bearing on howthose [restructuring] processes work in those states.” Attentionpaid to California and Montana detracts from efforts in otherstates, she said.

Marks wouldn’t say whether PacifiCorp was making a profit fromits California and Montana operations. “I don’t think we want totalk about numbers at all.” She also was reluctant to speculate onwho might be interested in buying the territories but did say thecompany was approached by a prospective buyer last year.

“People have different reasons for wanting to buy. Perhapsthey’re already in the state and they want to consolidate. It mightbe somebody who simply wants to get into that state. We’re prettywell open in terms of the who. Our primary concern is we get whatwe consider is a fair price for those properties. And, frankly, weintend to carefully vet any potential buyers to make sure they arefinancially viable because we want to make sure those customers andemployees are taken care of.”

Withdrawal from California and Montana would leave PacifiCorpwith operations in Oregon, Washington, Idaho, Wyoming, and Utah, aswell as Australia.

“These are sound service areas which would represent a realadded value for a number of potential purchasers,” said Buckman.”However, we believe these are valuable properties and if we do notreceive credible offers, we will continue our ownership.”PacifiCorp plans to begin accepting bids this summer. If a saledevelops, the company expects to complete the transaction by theend of the year.

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