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The Portland Tribune
July 19.2002

Group opposes making PGE a public utility
Hopes diminish that coalition will be there if new offer goes on table

The Tribune

The big corporate guns have begun wheeling into place to fight off a potential government takeover of Portland General Electric.

Lobbyist and former state Sen. Paul Phillips is behind a newly formed coalition called Oregonians for Jobs and Power, which has the backing of PGE itself as well as Spokane-based utility Avista Corp. The National Electrical Contractors Association also is supporting Phillips’ coalition.

PGE eventually will kick in money for the group to conduct research, said Kregg Arntson, a spokesman for the utility.

Phillips, who heads Pac/West Communications, describes as “shams” two separate efforts — which have been gaining momentum in recent weeks — to turn PGE, an Enron subsidiary, into a publicly owned utility.

He argues that if they succeed, they would cost local governments millions in tax monies yet would fail to provide any sort of rate benefit to customers.

“We’ve done some research on the economic costs and the basic instincts,” he said. “We’ll at least raise some questions. It’s disastrous for us to run headlong into municipalization of a private business. Ratepayers will be hurt.”

Bob Jenks, executive director of Citizens’ Utility Board of Oregon, disagrees. “It’s not a government takeover, it’s citizens wanting to buy PGE,” Jenks said. “We would rather have local government buy it cheaply than have Duke Power buy PGE at a much higher rate.”

One of the proposed takeover efforts — proposed by lawyer Dan Meek and activist Lloyd Marbet — would involve use of the state’s right of eminent domain to acquire PGE. Phillips labeled that plan as having a “socialist bent.”

The other plan being floated is for Willamette Valley Power, a proposed six-county entity, to buy PGE at an auction expected to begin this week as part of Enron’s bankruptcy proceedings. WVP then would simply oversee PGE, which would continue to operate as a private business.

Phillips’ coalition is viewed by utility watchdog groups as little more than a front for PGE. “You don’t run a grass-roots organization out of a PR firm,” Jenks said. “Everyone assumes it’s PGE or it’s PGE executives because they have the most to lose.

“This organization,” Jenks continued, “can’t hide the fact PGE is owned by Enron; Enron is bankrupt, and they are going to auction PGE off. PGE has the highest rates in the region. You have to cut rates, not give more money to Enron creditors.”

In the next several weeks, Enron is releasing data to prospective buyers so they can evaluate pieces of the company, including the estimated $2.5 billion Portland utility, said Enron spokesman John Ambler.

Under bankruptcy reorganization, Enron is giving its creditors committee two options: Auction off the leftovers of the once mega-size energy company, or form a new energy company called OpCo, with PGE making up 42 percent of it.

The method for accepting bids is still being worked out with creditors and a New York bankruptcy judge. A decision on PGE probably won’t occur before mid-September, Ambler said.
Thus far, no other buyers for PGE have come forward.

Local 125 of the International Brotherhood of Electrical Workers, once an opponent of a public takeover of PGE, has now thrown its support to the Willamette Valley Power idea. Industrial Customers of Northwest Utilities, which includes PGE’s biggest customers such as Intel Corp., and the Citizens’ Utility Board, have agreed to explore the WVP idea.

Contact Kristina Brenneman at kbrenneman@portlandtribune.com