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March 11, 2005

CUB Praises PUC Ruling on TPG

The Citizens' Utility Board of Oregon (CUB) praised the Oregon Public Utility Commission's rejection of Texas Pacific Group's bid to purchase Portland General Electric (PGE) today. "This was the only decision the Commission could reasonably make based on the evidence and the law," stated Bob Jenks, CUB's executive director.

In a case that has attracted national attention, CUB argued vehemently that Texas Pacific's short-term business model was not in customers' interest, and was designed specifically to take advantage of the regulatory system to earn excess profits for its investors. Jenks points out that, "a combination of profits from double-leveraged financing, collecting taxes that don't get paid to government, the upheaval of yet another sale in a few years, and the short-term incentive to cut maintenance and investment expense is a recipe for ratepayer abuse." It is also a recipe, Jenks noted, for losing PGE to an outside buyer who could easily decide to move the headquarters of this landmark Oregon business.

Every single customer representative group opposed Texas Pacific's proposal, and there was a general public outcry against the deal as well. Jason Eisdorfer, staff attorney for CUB, noted that, "The Commission's decision shows that the law and the regulatory process are working the way they're supposed to."

CUB is quick to point out that the future of PGE is still to be determined. "Now customers need to rally around and decide what we want for PGE's future," said Jenks. The Commission's rejection of Texas Pacific's application opens the door to a number of alternate possibilities for PGE, including the purchase by a newly formed regional power authority or the City of Portland, or a public offering of PGE's stock after its distribution to Enron's creditors.

CUB welcomes the Governor's leadership in exploring and promoting the best path to a more secure utility for PGE customers.

Regardless of PGE's eventual disposition, CUB applauds the Commission for its strong statement about appropriate utility ownership, and its rejection of Texas Pacific's proposal which offered customers neither the rate-reduction nor the stability they need.

Posted by Oregon CUB at March 11, 2005 01:34 PM