The Daily Astorian, Tuesday, February 17, 2004
October 31, 2003

Wake up, PUC

Don't give Texas Pacific Group a free pass to buy Portland General Electric

Oregon has an enormous opportunity to correct a mistake, give electricity ratepayers a break and create a new corporate headquarters of a home-owned utility. The chance we have involves Portland General Electric. Because of Enron's bankruptcy, PGE is up for sale. The only formal suitor is Texas Pacific Group.

We can do better.

In the Sunday edition of The Oregonian, two eminent Oregonians – Ken Lewis and Sid Lezak – made an excellent argument for creating a "publicly owned but privately operated power utility."

The authors' most compelling argument was about the self-interest of two prominent Oregonians – Neil Goldschmidt and Tom Walsh – who are giving political cover to Texas Pacific Group.

It is a misconception that Goldschmidt and Walsh will protect Oregon ratepayers. Wrote Lewis and Lezak, "... (T)hese local participants are investors. Their bottom-line interests are for higher rates and higher profits, which distinctly conflicts with the interest of Oregon homeowners and businesses for lower rates."

In other words, Neil and Tom are in this for Neil and Tom, as is always the case with an investor and his investments. Wrote Lewis and Lezak: "The two local participants obviously will represent the Texas corporation's interests, not ours."

The biggest flaw in the deal with Texas Pacific which the state Public Utility Commission should recognize is the company's short-term financial perspective. Texas Pacific's CEO David Bonderman has said that his company picks up companies that are in decline, increases their earnings and sells them off. Thus "long-term commitment to service will not be realized because TPG is not a long-term investor," wrote Lewis and Lezak.

It was a mistake to allow Enron's purchase of PGE in 1997. As this newspaper pointed out in a series of seven editorials in 1996 and 1997, Enron's interest in PGE was all about California, never about Oregon.

And guess what. PGE customers are now at the top of the ratepayer heap. They pay higher rates than customers of Oregon's other utilities, public or private.

All of this affects the Oregon economy.

The PUC of 1997 erred by letting Enron into this state. It should not repeat the mistake by giving a free pass to Texas Pacific Group, no matter how blinding Neil Goldschmidt's persuasive powers might be.