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The Oregonian

Utility district fight in spotlight



LAKE OSWEGO -- To Walt Brown, the looming fight over forming a people's utility district in Clackamas County is just the latest chapter in an old book on local control and public ownership of basic services.

But to Portland General Electric, whose power equipment the proposed district would seize, it's a question of continuity of service and holding together a 114-year-old utility that serves more than 740,000 customers.

How the argument plays out will be watched in Portland and throughout the northern Willamette Valley.

The Clackamas County effort is part of a broad push by public-power advocates who are maneuvering to take over PGE, a subsidiary of bankrupt, Houston-based Enron. The plan, by the Oregon Public Power Coalition and local volunteer committees, is to seek formation of publicly owned utility districts in eight counties that would be run by eight elected five-member boards. The counties are Clackamas, Multnomah, Washington, Yamhill, Columbia, Hood River, Marion and Polk counties.

Brown, of Lake Oswego, one of the chief petitioners, was instrumental in a similar 1980 effort. After a hard-fought campaign, Clackamas County voters approved forming the district and elected Brown's late wife, Barbara, to the board. But a second vote on giving money to the district failed, sending the whole idea into the dust bin -- until now.

"It was a good idea then, and it still is a good idea," said Brown, an attorney emeritus with the Consumer Justice Alliance and a former state legislator. "Unfortunately, we were defeated by money from the proprietary electricity-generating industry."

Karen Lee, a PGE governmental affairs representative, agrees money is an issue, but in the opposite way.

Lee, of Lake Oswego, said cutting PGE's well-integrated system into parts would trigger enormous costs in each of the counties. She said severing Multnomah County from the system, cutting out about one-third of PGE's customers, would create more than $100 million in costs to build transmission lines, substations and feeder lines. She said the costs would be necessary to provide power-routing options across county lines.

"The value of the utility is to keep it unified, all in one piece," Lee said. "All of this carving would be very expensive because we've never extended our service along political boundaries."

To head off the public-power drive, Lee and her counterparts are focusing on the effort in Multnomah County, which is likely to be the first and largest showdown. The coalition is pushing for a countywide vote in September or November, but an election date has not been set.

Meanwhile, PGE has solicited and collected resolutions by local governments opposing the proposed takeover in Multnomah County. The resolutions were signed by cities including Gresham, Milwaukie, Tigard, Tualatin, Salem, Hillsboro, Boardman, Hubbard, Silverton and Keizer.

The Clackamas County commissioners and the boards of commissioners in Marion and Polk counties also signed resolutions of opposition.

Clackamas County Commissioner Larry Sowa said he opposed a Multnomah County people's utility district because he wants to make sure Clackamas County isn't short-changed. He said he favors a regional model.

"I don't have anything against a PUD if we could get one .... by which Clackamas County had an equal vote and equal ownership," Sowa said.

He said that if a PUD is limited to Multnomah County, its effect on Clackamas County's interests is left up to whoever is elected to the district's governing board.

"They might decide to cooperate with Clackamas County -- or they might not," Sowa said. "A regional PUD is the only way to ensure that residents of Clackamas County would benefit from a PUD in Multnomah County."

Commissioner Bill Kennemer said he doesn't want a PGE split-up.

"I think it does damage to PGE's ability to produce low-cost power," he said.

Commissioner Martha Schrader, who also voted for the resolution, said she based her decision on discussions with the National Council of State Legislators and the Oregon Public Utility Commission.

Public-power advocates say one of the main benefits of forming a people's utility district would be getting a share of the low-cost power marketed by the Bonneville Power Administration from the federally owned dams on the Columbia and Snake rivers.

Lee countered that the BPA already has allocated all of its low-cost power and would be forced to market higher-cost power that it would buy on the spot market.

Dan Meek, a Portland attorney representing the Oregon Public Power Coalition, said that was not true. He said the entire BPA allocation schedule will be up for renegotiation in October 2006.

"If you have a public utility by that time, they would have the same right to that lower-cost power," Meek said.

Lee said she thinks the public-power advocates are trying to create political pressure on the city of Portland to buy all of PGE. This may or may not be a good idea, she said.

"This is a smokescreen for the real issue," Lee said of the PUD drive.

Lloyd Marbet of Boring and Tom Civiletti of Oak Grove, longtime public-power advocates, disagreed. Both said they are motivated by trying to place decisions over a basic and necessary utility into the people's hands. Both also slammed Enron -- PGE's parent company, which collapsed in scandals over accounting and marketing practices.

"The bottom line is communities of electors having a hand in the decision-making process of a utility," said Marbet, a longtime PGE opponent. "With PGE, we have been the victims of their decision-making process."

A PUD vote in Clackamas County remains a possibility after the Multnomah County vote. Coalition volunteers would need to collect and submit 3,972 valid signatures of registered voters to force a vote.

Sarah Hunsberger of The Oregonian staff contributed to this report.