KGW TV

Anti-PGE takeover group fueled by utility industry, not citizens

01:45 PM PDT on Thursday, October 16, 2003

By ABE ESTIMADA, kgw.com Staff

They call themselves the “Citizens Against The Government Takeover.”

In the last several weeks, the political action committee has bombarded radio and TV with ads exhorting citizens to vote against ballot measures 26-51 and 26-52 that, if approved during a Nov. 4 special election, would help form a Multnomah County public utility district whose aim is to take over Portland General Electric.

Measure 26-51 would authorize the forming of a PUD, while Measure 26-52 would raise money from new property tax increases for a study examining the feasibility of seizing PGE’s power generating facilities.

A closer examination by kgw.com of contributions and expenditures reports filed with the Multnomah County elections office show utilities and utility executives heavily bankrolling Citizens Against the Government Takeover.

PacifiCorp and PGE doled out about half a million dollars in cash and in-kind contributions to help cover the $748,853 spent by the PAC to wage a shock and awe campaign against the public utility district proposal, according to the reports filed with the elections office on Sept. 29.

Public utility district proponents have spent about $20,000, mostly on printing costs and voters’ pamphlets.

What PUD supporters spent on their campaign would almost be play money for their opponents. Included in the expenditures reported by the PAC is $12,852 for “icebreaker events.”

As of late September, PacifiCorp donated $400,000 to fight the PUD measures, PGE threw in another $100,000, and about 23 lawyers gave another $8,850 to help blitz the TV airwaves with advertising and saturate radio with as many as two ad spots in 30 minutes.

The amount of money being spent by the Northwest utilities underscores the magnitude of the political fight involving the future of PGE, Oregon’s largest utility.

Opponents of the measures say that if the ballot measures are passed, the PUD will saddle ratepayers with a $1 billion price tag to purchase PGE’s power generating assets and be an unwanted layer of government.

“Throughout this, the proponents have wanted to put up boogie men. Now, it’s lawyers apparently,” said Brian Gard, president and chief executive officer of public relations firm Gard & Gerber, which is organizing Citizens Against the Government Takeover. Gard & Gerber also represents PGE.

“The proponents (of the ballot measures) want to take a billion dollars of assets from PGE and Pacific Power. What would be remarkable is if Pacific Power and PGE did not fund this campaign,” Gard continued.

“The people that I know who are at PGE and Pacific Power and the people involved in our campaign believe we are working in the interests of the current customers of Pacific Power and PGE, and the employees of Pacific Power and PGE.”

Supporters of the ballot measures, who call themselves the Oregon Public Power Coalition, say Enron can’t be trusted to look after ratepayers when it sells PGE or parts of the utility to pay off bankruptcy debt and appease creditors.

PUD supporters point to PGE – and therefore, ratepayers – paying corporate parent Enron tens of millions in state income taxes between 1997 and 2001, but Enron paid very little of the money to the Oregon Revenue Department. PGE will likely pass the costs of Enron's debt to ratepayers.

“We knew (PGE) would spend a huge amount of money,” said Liz Trojan, one of seven petitioners for the Multnomah County People’s Utility District and treasurer for the Oregon Public Power Coalition.

“We also knew that Enron was also a flash point for a lot of people. What we’re hoping is that people will wake up, people will see the glossy brochures, and full page ads…and realize they’re being lied to.”

The contributions and expenditures reports show that Citizens Against The Government Takeover is a front for big corporate interests such as PGE that has no interest in protecting customers, public utility district supporters said.

Top PGE executives such as Stephen Hawke, Fred Miller, and James J. Piro gave a combined $700 to the PAC, according to the reports.

Meanwhile, PacifiCorp executives Richard Reiten, Andrew Macitchie, Michael Pittman, and A. Richard Walje donated a total of $850 to the campaign to defeat the public utility district proposal.

The money for the PAC is well worth it, Gard said. If ballot measure 26-52 authorizing a special levy passes, it would authorize the spending of about $127,000 from increased property taxes for a study on taking PGE’s power generating assets.

“It just absurd that a $127,000 engineering study is all the money that will be necessary,” Gard said.

The city of Portland spent close to $1 million and Northwest Natural dropped several million dollars to study the same issues, Gard said. When ratepayers are through paying for a study that will cost more than PUD proponents claim, the PUD may sell bonds to buy PGE or PacifiCorp’s power generating facilities. Those bonds will be paid back through higher electricity rates for customers, Gard said.

Or the PUD will have to go to the open market to buy power, and that will also be a more expensive proposition, he said.

“It is a myth of probably 40 years ago that having a PUD means you get lower rates,” Gard said. “That hasn’t been true in many years.”

“…(PUD proponents) talk about their concern that somehow or another, the issue with Enron is that it will split PGE up,” he said. “The only thing that will split PGE and Pacific Power up is if these two measures pass.”

But Multnomah PUD backers say there are 29, publicly-owned utilities in Oregon that charge less for electricity than PGE.

"Publicly owned utilities don't have shareholders," Trojan said.

What is sad about PGE’s fight is that it’s “using the public’s own resources against them,” said Lloyd Marbet, a PUD supporter.

Marbet is attempting to place a ballot measure in Clackamas County that would create a public utility district there. Claims that a PUD would create another layer of government are unfounded because the government layer are ratepayers themselves, Marbet said.

“It’s obvious the people having control of a utility is one of the most democratic forms of control, and one that presents the issues of the day to the public rather than some backroom deal,” Marbet said.

Marbet said he’s worried that the Nov. 4 election will be "manipulated" because PUD proponents in Multnomah County are being outspent by hundreds of thousands of dollars by Citizens Against The Government Takeover PAC.

The PAC’s ads have been seen and heard in Bend, even though the PUD is a Multnomah County issue, he said.

“It’s amazing how Portland General Electric and Pacific Power and Light are attempting to shift the concerns of the public from their own deals and tax collections, which should be under greater public scrutiny, to try and infer that this is going to put them in a position of peril,” Marbet said.