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Citizens to utility panelists: Step aside

• Ratepayers at hearing bash all players in planned PGE sale

Two Oregon Public Utility Commission members found themselves at the center of the increasingly contentious NW Natural proposal to buy Portland General Electric last week when they were asked to step aside from considering the sale because of conflicts of interest.

Both OPUC Chairman Roy Hemmingway and Commissioner Lee Beyer, a former state senator, have past ties to the gas and electric utilities that could sway their decision in the $2.8 billion deal, said Portland attorney Dan Meek.

Meek made the comments during a commission hearing in which more than 150 people crammed into Midland Library on a snowy Thursday night.

'We need a utility system that operates in the public interest,' said energy activist Lloyd Marbet.

Marbet handed out fliers at the door listing 'Seven Reasons to Reject the Deal from NW Natural Gas,' including 'a huge financial burden' on ratepayers and 'secret multimillion-dollar bonuses for PGE executives.'

Hemmingway did consulting work for PGE related to the utility's fight in the 1990s against efforts to close the Trojan nuclear plant; Beyer received campaign donations in 1998-99 from PGE and NW Natural totaling $2,300.

Beyer and Hemmingway, who did not attend Thursday's meeting, said they would not recuse themselves from the case. If they did, there would be no quorum for the three-member commission.

Commissioner Joan Smith, who attended the hearing, called the accusations a 'cheap shot.'

'There are a lot of protections in the law' to prevent conflict of interest, she said.

Beyer reaffirmed his stand the following day: 'If I did that, I'd have to recuse myself from any case before the PUC,' he said. 'Almost anybody who has served in the Legislature has received a utility contribution. That's public knowledge.

'I work very hard to keep my mind very open,' he said. 'Our job is to look out for ratepayers.'

Hemmingway expressed the same sentiments. 'It's up to the appointing authority whether I can do this job or not,' he said. 'I have been on both sides of issues and feel I can render a neutral decision.'

Debt and taxes

Marbet, Meek and others asked for the recusal during a raucous two-hour meeting in which people bashed politicians, power companies and lawyers along with the proposed sale of PGE to NW Natural. Their concerns: everything from excessive debt to ratepayers' burden.

Any mention of PGE's parent company, Enron Corp. Ñ now engulfed in bankruptcy and scandal Ñ drew boos and hisses from the crowd. There also were demands that the Houston-based energy trading company repay Oregon taxpayers the $357 million in federal income taxes it collected and pocketed over a four-year period.

Some supporters of the PGE sale to NW Natural were booed, too, and quickly left the meeting.

Ratepayers 'should not pay debt of Enron's fall,' said Jordana Sardo, a representative of Radical Women.

U.S. Sens. Ron Wyden and Gordon Smith of Oregon last week requested an investigation into whether Enron strong-armed PGE managers and utilities in other Western states into charging higher electrical rates.

Homeowners said they don't see the likelihood of any relief from increased electric and natural gas bills, and they urged the state and city of Portland to form a public entity that would operate PGE.

'Now is the time for consumers to form an entity to take over PGE and regain control,' said Frank Gearhart, a self-described 'angry consumer' who was interrupted by cheers and yells four times. 'It's the only way to keep corporate corruption from bankrupting the ratepayer.'

A small contingent of PGE workers who support the sale huddled in the back of the room, away from the more vociferous speakers.

'I look at the options out there, and what I see out there I don't like,' said Leon Phillips, a 30-year PGE employee and manager of its Gresham facility. 'At least with NW Natural there are things I like. I do know NW Natural and PGE have a lot of things in common.'

Bonuses of contention

NW Natural counsel Susan Ackerman told the crowd that the combined utility would provide $30 million in rate credits over its first six years.

But the highly leveraged deal, including a $155 million credit line, has raised hackles in an industry reeling from Enron's phony financials.

'They already know we're concerned about debt,' the utility commission's Smith said of NW Natural's managers. 'They may try to mitigate it in other ways. The jury is still out.'

Ackerman, who drew snickers from the audience when she said rate savings eventually would come back to customers, said she wasn't surprised by the opposition.

'There's some organized opposition,' she said. 'I don't know if NW Natural customers feel that way.'

She said NW Natural did not offer compensation in the deal for either NW Natural or PGE executives. Enron, however, offered an estimated $2 million in retention bonuses to several managers to stay until the NW Natural transaction has been completed.

PGE spokesman Kregg Arntson said he could not say who was paid, or the amount. 'These are confidential between Enron and managers,' he said.

Contact Kristina Brenneman at This email address is being protected from spambots. You need JavaScript enabled to view it..