Oregon Breaking News

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Fort Worth, Texas-Based Bidder for Portland General Has Ties to Oregon Pension 11/21

Enron Agrees to Sell Portland General Electric 11/19

Voters Reject Utility Takeover, Tax 11/6

Provisional Pact Could Cut Northwest Power Prices 10/24

Oregon Public Purposes Funding Survives Legislature 10/1

PUC Grants Avista Natural Gas Rate Hikes 10/1

Avista Seeks Hefty Rate Increase 8/7

Bill Would Ban Portland Condemnation of Enron-Owned Utility 8/5

If Texas Pacific's offer is approved by bankruptcy court and state utility regulators, money for the acquisition would likely come from both TPG Partners III and TPG Partners IV, a Texas Pacific spokesman said.

Bill Parish, a Portland investment adviser, suggested that rather than indirectly owning PGE, the state should consider purchasing the utility.

"One might ask why the Oregon Investment Council is not making a direct investment in PGE but instead allowing a Texan buyout firm with no management experience in the utility sector to earn staggering fees on the transaction," Parish said.

Source: The Oregonian

Enron Agrees to Sell Portland General Electric

(November 18) Bankrupt energy trader Enron Corp. finally agreed on a deal to sell Portland General Electric, one of its most prized assets, for $2.35 billion to Oregon Electric Utility Co., which is backed by private equity firm Texas Pacific Group.

The sale of the asset still needs to be approved by the bankruptcy court and relevant regulatory authorities. This is one of the biggest asset sales that Enron has agreed upon after it filed for Chapter 11 in the winter of 2001.

Source: Reuters

Voters Reject Utility Takeover, Tax

(November 6) On Nov. 4, Multnomah County voters soundly rejected a people's utility district aimed at condemning Enron-owned Portland General Electric.

PUD backers had hoped high power rates and PGE's ties to the bankrupt and disgraced Enron would persuade the county's voters to approve public power, despite the complexity of the issue. But more than 70 percent of voters sided against Measure 26-51 after a campaign financed heavily by PGE and PacifiCorp raised a record $1.9 million to battle the measure.

The vote is not an obituary for public power. The city of Portland is still trying to buy 114-year-old PGE from Enron. And PUD supporters are seeking to put similar measures on five other county ballots.

In Multnomah County, the opposition money fueled television and radio advertisements that denigrated a government takeover as risky, warned of increased rates and focused on a one-time, 0.003 percent property tax increase to pay for a study on acquiring PGE.

Voters also rejected the property tax initiative, Measure 26-52, which would have financed an engineering study for the utility district. Voter turnout was roughly 45 percent, relatively high for a special election.

Brian Gard, chairman of the opposition campaign, Citizens Against the Government Takeover, called the no vote surprisingly strong. "This is a pretty strong mandate that not only did (voters) not want this little tax, but, more importantly, that they didn't want a PUD," Gard said. "At the very least this should give the city serious pause."

Portland City Commissioner Erik Sten, who is helping lead the city's efforts to acquire PGE, said he does not read the outcome as a rejection of public power given the lopsided campaign spending. Sten, who remained officially neutral in the campaign, said a city purchase of PGE would not require property taxes, threaten PacifiCorp or split PGE's service territory, as the PUD effort would have. "There's no good reason to trust Enron because this ballot measure went down. It doesn't solve the problems this community has either way, and I think we need to keep working on a solution that does," he said.

During the campaign, supporters of the measures highlighted PGE's Enron ownership and the lower rates at Oregon's six electric utility districts. Tuesday night, they said they aren't giving up after more than a year of effort in Multnomah County that they say has raised the profile of the public power issue. They plan to get people's utility district measures on the ballot in five other Oregon counties: Clackamas, Marion, Polk, Washington and Yamhill. They may try again in Multnomah County.

Supporters contended before the vote, and a federal judge agreed, that ballot language warning that the measure could lead to more than a 3 percent increase in property taxes was misleading; "patently false" is how the judge put it. But an appeals court allowed the ballot language to stand while the case is reviewed.

PGE and PacifiCorp, which operates as Pacific Power, took no chances. By Nov. 3, the campaign the companies financed spent $567,000 buying television airtime. The purchase was intended to ensure that 80 percent of the voters in Multnomah County saw an anti-PUD ad at least four times, said Gard, also president of Gard & Gerber, a Portland advertising firm that ran the opposition campaign.

Two organizations supporting the measures, the Oregon Public Power Coalition and the Don't Waste Oregon Caucus, reported last week raising $29,000, more than 60 times less than opponents.

At $1.9 million in cash and in-kind contributions, the initiative campaign is the most expensive in Multnomah County history. Final money-raising reports are due later this month.

Source: The Oregonian

Provisional Pact Could Cut Northwest Power Prices

(October 24) On Oct. 23, a provisional pact was launched that could lead to lower electricity rates in the Pacific Northwest and settle a feud between municipal and investor-owned power companies.

Portland, Oregon-based Bonneville Power Administration, a federal agency, said it would be able to cut its rates by 7.4 percent if the agreement is approved by more than 50 litigant utilities within the next 120 days.

BPA markets power from federal hydropower dams, much of it at comparatively cheap prices to municipal utilities.

The agency responded to calls that all customers in the region should benefit from the federal projects in 1980 by agreeing to make some financial payments to investor-owned utilities as an alternative to cheap power.

The amount of those payments rose sharply a couple of years ago, angering municipal utilities that argued they had become too generous and led indirectly to higher rates for their customers. BPA has raised rates by around 46 percent in the last two years.

Municipal utilities then issued a court challenge and the new proposal aims to settle their lawsuit.

The jump in power rates during the last couple of years has led to a sharp drop in power intensive aluminum production at the region's smelters.

The provisional pact postpones some of the benefits for the customers of investor-owned utilities in return for the municipal utilities dropping their lawsuit. It is signed by two Washington investor-owned utilities, Spokane-based Avista Corp. and Puget Energy Inc. of Bellevue as well as one of the state's municipal utilities, Vera Water and Power.

For the pact to be enforced and rates to be cut, all the litigant municipal utilities have to sign on. Industry sources said it is far from clear that they will all agree.

The pact did, however, receive endorsements on October 23 from the governors of Idaho, Montana, Oregon and Washington as well as the entire Northwest congressional delegation.

Source: Reuters

Oregon Public Purposes Funding Survives Legislature

(October 1)  Oregon public-purposes funding for energy conservation and renewable energy has survived intact the budget crisis-ridden 2003 state legislative session.

Oregon lawmakers adjourned in late August after considering, but ultimately rejecting, a proposed shifting of public-purposes dollars into the state's general fund. Another legislative idea would have required Oregon Office (now Department) of Energy approval for payments to the

Energy Trust of Oregon, which administers most of the state's conservation/renewables public purposes spending, including programs for residential and low-income households. It included a provision for OOE to determine whether the Trust should continue its role. That bill narrowly failed in the House of Representatives shortly before legislators called it quits.

The fight over public-purposes funding came as Oregon lawmakers grappled with a multibillion-dollar budget shortfall. According to Jeff Bissonnette of the Fair and Clean Energy Coalition, a leading public-purposes funding supporter, anti-tax Republican legislators "were looking for any pot of money that had not yet been raided, funded or otherwise yanked onto the table to pay for ... keeping the state's doors open."

However, the status quo was bolstered by legal analysis that public- purposes funding as constituted couldn't be tapped for the state's general fund, as it is collected only from Portland General Electric and PacifiCorp customers.

Source: Energy NewsData

PUC Grants Avista Natural Gas Rate Hikes

(October 1)  The Oregon Public Utility Commission has approved an overall 9.9 percent rate increase for Avista Utilities. The company will begin charging its natural gas customers in Oregon the new rates effective Oct. 1, 2003.

This is the company’s first general rate increase in Oregon since Avista Utilities acquired CP National in 1991.

The company initially requested an overall $7.5 million increase to pay for growing business expenses other than the cost of buying natural gas supplies. The Commission reduced the request by $1.2 million.

The general rate increase will take effect at the same time as a rate change based on wholesale natural gas prices, called a purchased gas adjustment or PGA. The PGA reflects wholesale natural gas prices paid by the company. The company does not make a profit on the sale of gas.

With the combined effect of both rate adjustments, the bill for a typical residential customer using 55 therms per month will go from $43.09 to $53.83, an increase of $10.74. The January bill for a typical residential customer will increase $20.48 over last January’s bill. Rates for commercial and industrial customers will increase from 19.9 to 21.2 percent.

A portion of the PGA increase has been delayed so the combined effect on residential customers will be no more than 25 percent. As a result, rates will change again March 1, 2004, when Avista passes through the remaining increase in its wholesale gas costs. In the interim, the company will not collect interest on the remaining balance in the PGA account.

Source: Oregon Public Utility Commission

Avista Seeks Hefty Rate Increase

(August 7) Avista Utilities has filed for a rate increase that will boost commercial and industrial customer rates by more than 20 percent. Residential customers will see their typical bills hiked nearly 18 percent.

After the great energy price spikes of winter 2000-01, natural gas and electricity costs retreated a bit. But last winter was particularly brutal on Atlantic seaboard states and that left natural gas distributors low in supply and futures markets soaring.

"Usually prices go down in the summer," said Catherine Markson, communication manager for Avista. "This year prices didn't go down in summer, because the demand was so great. Distributors had to refill their storage tanks."

Although utility companies such as Avista make long-term deals for their gas, they bracket their buys so that if prices went down they wouldn't be stuck with higher-priced fuel. When they pay out more than they're charging for the gas, they petition the Public Utilities Commission to raise rates. When prices fall, they seek PUC approval to lower rates.

On Oct. 1, Avista will ask the PUC's blessing for a 17.8 percent increase in what it charges about 70,000 residential customers. That will push the cost per British thermal unit to 85 cents. The all-time-high therm rate was 91.6 cents in January 2001. Avista says its average residential customer consumes 55 therms per month, so the average customer's bill will increase $7.68.

Avista said the rate increase would bring in $11.7 million from Oregon customers.

Source: (Medford) Mail Tribune

Bill Would Ban Portland Condemnation of Enron-Owned Utility

(August 5) Portland General Electric took its political muscle to the state Capitol and won a round in its battle to prevent the city of Portland from condemning the utility, which is owned by Enron.

House Bill 2356, passed by the House Rules and Public Affairs Committee in a 5-2 vote, would prohibit Portland from using its powers of eminent domain to take control of PGE's assets. The bill now goes to the full House, controlled by Republicans, where passage is expected. Its fate in the Senate is less certain.

Portland has been trying to buy PGE for almost a year from the bankrupt Enron. But efforts faltered in May, and Enron's bankruptcy restructuring plan filed July 11 offered few details about the Houston company's plans for the utility.

City officials, increasingly frustrated by Enron's plodding pace in dealing with PGE, haven't made any formal moves toward condemnation. But three of the four commissioners and Mayor Vera Katz have said they might use the option as a last resort to protect PGE's 743,000 ratepayers.

PGE officials vehemently oppose condemnation, which they view as a hostile act that would break up the utility's six-county service territory. They also predict it would force rate increases.

Source: The Oregonian

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