A settlement was reached yesterday by Salem, OR-based SierraPacific Resources, the Oregon Public Utility Commission, industrialcustomers and consumer groups to allow Sierra Pacific to acquirePortland General Electric. The agreement calls for a six-yearfreeze on certain electricity prices and a $95 million credit pricefor PGE customers over the next seven years.
Sierra Pacific last year announced it would acquire PGE, a whollyowned subsidiary of Enron Corp. for $2.1 billion, excluding debt (seeDaily GPI, Nov. 9, 1999). PGE provideselectricity to more than 700,000 customers in the Portland-Salem area.
In papers filed yesterday with the OPUC, Sierra Pacific, OPUCstaff, the Citizens’ Utility Board of Oregon and the IndustrialCustomers of Northwest Utilities recommended that OPUC adopt thesettlement. Terms and conditions of the agreement establish thatthe approval would be in the public’s best interests. OPUC isexpected to rule on the agreement within a few weeks. Already,Sierra Pacific has obtained approval from the U.S. Department ofJustice and the Federal Trade Commission. It also is awaitingapproval from the Federal Energy Regulatory Commission and theSecurities and Exchange Commission.
Settlement conferences lasted five months, and at the heart ofthe agreement are provisions to ensure that Sierra Pacific has anincentive to achieve the “maximum possible efficiencies andsavings” from integrating the two companies to benefit all of itscustomers in Oregon, Nevada and California. The settlement alsoprovides rate credits that offer immediate benefits for PGEcustomers. Among conditions of approval are the following:
A six-year price freeze on distribution, customer services andtransmission services for PGE from Oct. 1, 2001 through Oct. 1,2007. PGE may adjust prices in response to changing wholesaleelectricity costs and the amount the company pays for fuel to powerits generation plants.
A $96 million acquisition credit on customers’ bills that willbegin as soon as the transaction is complete and extend throughSept. 30, 2007.
PGE’s and Sierra Pacific’s agreement to continue a leadershiprole for Oregon’s electric restructuring legislation, Senate Bill1149.
Sierra Pacific will offer 30 different customer protections toguarantee service quality and reliability.
©Copyright 2000 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.
© 2021 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |