Citizens' Utility Board of Oregon: Settlement Discussions in MidAmerican Case

What have we done for YOU lately? Since 1984, CUB has saved Oregon ratepayers more than $3.4 billion dollars.

December 20, 2005

Settlement Discussions in MidAmerican Case

The MidAmerican case is down to the nitty gritty of settlement discussions. Is there enough creativity and flexibility among the applicants at MidAmerican and among the parties here in Oregon, to make a deal? Settlements have been reached among most parties for MidAmerican purchase of PacifiCorp holdings in Utah, California, and Idaho. We in Oregon are holding out for hard discussion of some of the issues we hold to be most important:

1) Will there be any kind of rate credit or assurance of sharing potential cost savings with customers? MidAmerican has argued that because this is an acquisition offer, not a merger offer, most of the usual costs savings would not apply. We understand this argument but continue to believe that some sign of good faith in rates is a strong component of a good deal.

2) Will Oregon maintain a fair amount of local control? There has been discussion about moving PacifiCorp headquarters to Utah. CUB would like to see those headquarters remain here in Oregon.

3) Global warming is here and it isn't going to change course without serious action to reduce our levels of greenhouse gas emissions. MidAmerican and PacifiCorp have both historically produced the majority of their energy using coal. What kind of renewables plan and global warming plan are they willing to commit to?

The settlement discussions are continuing and may come to a close before the new year. Because current Pacific Power owner ScottishPower has expressed interest in selling the utility, it looks as though change of some sort is definitely coming to Oregon's second largest electric utility company. CUB will continue to push for the best possible deal for PacifiCorp customers.

Posted by Oregon CUB at December 20, 2005 02:08 PM

Comments

Greetings Oregon CUB,

Re: MidAmerican settlement discussions. Please don't miss the major point that acquisition or merger, whatever this is deemed ... means that there are less and bigger players , which means less competition. Bigger (and fewer) players do not like to compete to keep prices under control, they would much prefer to smother competition, cut up the market and feast. (See oligopoly in Econ 101).

You may say that we are talking about a regulated, sanctioned utility monopoly where no competitors are allowed but how big conglomerates cost things to justify their authorized profits would be shaded by the fact that competition is lacking.

Try to do things that increase ethical competition not lesson it.

We continue to erode the press, communications, medicine, transportation, manufacturing, energy production and transmission , the middle class , etc. by thinking that allowing "deregulation" and subsequent non-competitive corporate power to dictate the game is an efficient and equitable thing. Actually such policy does the opposite.

A compromising middle ground that does not bludgeon either the producers or the users is needed to save ethical competition. Ethical competition is needed to pull the U.S. out of its current foggy mindset.

You have the power to help make that happen.

Keep up the good fight.

Thanks for listening, Frank Petterson

Posted by: Frank Patterson at August 4, 2006 03:59 PM

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