Taking PGE public is a bad idea
TWO viewS l Ratepayers seem to agree that parting PGE from Enron is a good idea; the pressing question is how to do it most beneficially
The idea floating around for six counties in the Portland area to buy Portland General Electric and let the taxpayers pay for mistakes in operating it ranks somewhere between wrong-headed and goofy.
According to the Portland Tribune, City Commissioner Erik Sten is spearheading the idea of public purchase of PGE if NW Natural's acquisition fails (Counties ponder PGE alternative, Feb. 26). PGE would become a municipal utility, owned and operated by the taxpayers, regardless of whether they buy its electricity.
On one hand, I suppose it's a good idea to have Sten meeting with commissioners from Multnomah, Washington, Clackamas, Polk, Yamhill and Marion counties to search for 'Plan B' in case NW Natural's deal falters.
As a former manager at NW Natural, I confess to a bias: I think a company with headquarters in Portland and experience in today's energy markets clearly is the best idea for springing PGE from Enron Corp.'s clutches.
I also confess to hearing a tale or two about how the purchase from Enron is going, and the current chatter points to an interesting fact: Neither Enron nor NW Natural will pay significant walkaway fees if either side reneges on the deal. So if one side wants out, the deal probably will die.
Should this happen, PGE could be back on the auction block, with its generation stripped out, leaving a 'For Sale' sign on its poles and wires and the responsibility to serve its customers.
Oh, yes É don't forget Trojan! It's doubtful that Enron would want to hold on to the decommissioned nuclear plant. The ratepayers would be stuck with a burnt-out nuclear plant that clearly would be a legal liability unless Oregonians do an about-face and decide to build more thermal plants to meet future regional energy needs.
Assuming that the commissioners from the six counties know about as much about buying kilowatts as the governor of California, the region would be looking to obtain a lot of power to keep the lights on in Northwest Oregon. The first place to look: the power-poor Bonneville Power Administration. Next place: the private energy market.
At this point, it may be helpful to remind Oregonians what has happened in California, our Third World neighbor to the south. Faced with a drought, summer blackouts and a mishmash of deregulation enacted into law, Gov. Gray Davis led the charge to push Pacific Gas & Electric into bankruptcy and left the state's other large utility teetering on the brink.
Davis pushed California into buying electricity for its citizens. But that was last year. Today, California is trying to void and renegotiate $43 billion in electric contracts, saying the state paid twice as much as it should have. A recent Dow Jones story said that a majority of the contracts are two to three times the current electric spot price for power.
Talk about not understanding 21st century energy markets! I'm not sure this area's commissioners want to suit up for this.
The fact that the Oregon Legislature, governor and Portland City Council are showing little interest in converting PGE into a municipal utility isn't surprising.
Without public ownership of PGE, what lies ahead?
First, if Enron decides to sell PGE Ñ a restructured Enron could keep PGE, of course Ñ and strips out the generation, PGE's electricity customers are the big losers. They will pay higher, much higher, electric bills for years.
The owner probably would be another privately owned utility, with headquarters outside Portland, that looks upon this area as a secondary service territory. There may be a responsibility to serve it, but the company most likely will give little else to the community.
Douglas Yocom is a Portland resident; he worked as public relations manager for NW Natural for 12 years.