Industrial users question whether costs from Enron scandal will land on them
Portland General Electric's largest customers raised concerns this week that the utility Ñ which once seemed protected from the alleged misdeeds of parent company Enron Corp. Ñ could face untold millions in liability costs.
If it does, could the losses reach into the pocketbook of Oregon ratepayers?
Intel Corp., Precision Castparts Corp. and other members of the Industrial Customers of Northwest Utilities on Wednesday wondered, 'When's it going to stop?'
'If PGE is involved in some way, you can expect people are going to go where the money is,' said Ken Canon, executive director of the professional group. 'There's no end of surprises. We're concerned that it (legal costs) doesn't reach customers.'
Said Mike Salsgiver, Intel Oregon's public affairs manager: 'It's a moving crapshoot right now. In the end, we're interested in an outcome that does as little damage to customers as possible.'
The latest Enron revelations allege that its energy traders, including those in Portland, were involved in manipulation of California's wholesale energy prices, according to confidential memos released by the Federal Energy Regulatory Commission.
PGE spokesman Kregg Arntson said his company was surprised by the memos.
'Our trading operation is separated from Enron's, although we did buy and sell power to Enron,' Arntson said. 'Our traders do not participate in those types of activities. It's not known how these alleged practices contributed to the energy crisis. We're monitoring the situation and what action other market participants will take.'
Lawyers and consumer groups in California may use the paper trail to seek the recovery of billions of dollars in electricity overcharges collected by Enron during last year's energy shortage.
Federal regulators are investigating the use of manipulative trading strategies by Enron, which is now in bankruptcy court.
The city's high-end energy users had already posted a protest with PGE over its higher-than-average electricity rates.
Buried amid the Enron scandal and financial reorganization is the fate of NW Natural's $2.9 billion plan to purchase PGE. Last week, Enron proposed rolling PGE into its new spinoff company, OpCo Energy, as an alternative to the sale.
The creditors committee and a federal bankruptcy judge will have final say over what happens to PGE. They may opt to auction off the utility along with Enron's other assets.
'If creditors decide it (PGE) has more value than the spinoff company as a whole, they may go that route,' said Enron spokesman John Ambler. 'There are some issues that may make it difficult for NW Natural to purchase PGE. It will become clear at some point whether PGE is best in OpCo or going with NW Natural.'
Enron's interim chief executive officer, Stephen Cooper, is 'too busy' with the bankruptcy to visit Portland right now, Ambler said.
'Enron is trying to have it both ways,' said Bob Jenks, executive director of the Citizens' Utility Board.
NW Natural, which has raised concerns about PGE's liability costs related to Enron, must inform the state Public Utility Commission May 17 whether it plans to move forward with the PGE purchase.
Meanwhile, a civic and business group interested in buying PGE and turning it into a publicly owned power company presented its plan to the industrial customers group. The company would be called Willamette Power.
'There was interest in the proposal and wanting to understand more about it,' Salsgiver said.