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April 21, 2005

Governor Withdraws from Competing State Bid for PGE

CUB understands Governor Kulongoski's decision not to have the State of Oregon compete with the City of Portland for the public purchase of PGE. We feel that this does not materially change the goal of a publicly-held utility company with low-cost, stable electricity for the almost 800,000 Oregonian customers that PGE currently serves.

A City of Portland-led purchase, with regional governance, or a State-backed regional ownership, or a combination of the two, would result in reaching our goal. According to CUB staff attorney, Jason Eisdorfer, "We have the bones of a good bill in SB 1008. So, we will hope to pass the bill out of committee today and continue to work on the language to make it as clear and tight a proposal for public power as it can be. That way, either the Legislature can act on the bill as a whole or potentially integrate it with the City proposal." [Note: the bill did pass out of the Senate Business & Economic Development Committee on 04/21/05.]

CUB has been encouraging the City and State to work together, and we hope that this decision on the part of the Governor will result in an increased willingness of those at the City and State levels to work cooperatively toward a regional public power utility. The bottom line, however, is that CUB will continue to actively support both proposals in hopes of helping to usher one or the other, or a combination of the two, towards the finish line.

Whether this shift in the politics of the public power proposals will affect other contenders for the future of PGE, such as the purchase proposal by Oregon Mutual Development Inc., is unclear. What it does do is strengthen the bargaining position of the City of Portland in purchase negotiations with Enron, and the City maintains its advantage of having worked on their bid the longest and being able to move forward most quickly in a restricted timeline. The stock distribution option remains a fall-back position that contains significant drawbacks in comparison to a locally owned public utility. (Please see "What about stock distribution for PGE?" for more information about this possibility.)

Posted by Oregon CUB at April 21, 2005 03:25 PM

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