The Oregonian

House panel backs PGE bill

08/01/03

GAIL KINSEY HILL

Portland General Electric took its political muscle to the state Capitol on Thursday 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.

"If the city wants to buy us, then they can buy us," said Scott Simms, a PGE spokesman. "But we will do anything we can to stop condemnation."

PGE's commitment to the fight came through in HB2356, which had been languishing until July, when attorney and seasoned lobbyist John DiLorenzo crafted an amendment on PGE's behalf with the condemnation prohibition. PGE also retained lobbyist Larry Campbell, a former state legislator and speaker of the House, to advocate for the bill.

From the start, HB2356 dealt with limiting the city's ability to acquire PGE but went through several changes before reaching its final form.

"Condemnation is a dangerous course for a city like Portland to pursue," DiLorenzo said in testimony before the committee Thursday.

He warned lawmakers that politically powerful Portland could use its control of PGE to further the city's interests at the expense of smaller municipalities. He cautioned that a Portland takeover could deprive cities and counties of millions of dollars in franchise fees and property taxes

PGE's service territory covers six counties and 51 cities.

Portland City Commissioner Erik Sten, who has led the push to buy PGE and considers condemnation a viable option, said he was "disappointed" by the committee's action.

"It's sad that state legislators would be looking to protect Enron's interests at the expense of Oregonians," he said. "I suppose I shouldn't be surprised at anything coming out of Salem, but this one is disappointing. Enron is strong enough already, without their help."

Jeff Bissonnette, a lobbyist for the Citizens' Utility Board, a consumer advocacy group, urged the committee to reject the bill.

"The customers of PGE need options," he said. "We don't have a Portland problem; we have an Enron problem. We shouldn't be closing any doors."

Rules Committee Chairman Dan Doyle, R-Salem, supported the bill. He said condemnation by Portland could put too much power into the hands of a single city.

"How are the concerns of the other cities being represented?" he said.

Gail Kinsey Hill: 503-221-8590, gailhill@news.oregonian.com