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PGE/Enron & Pacific Power claim:
A People's Utility District is "anti-business"

OPPC replies: Nothing could further from the truth

  1. A P.U.D. protects our local business from high rates. PGE business customers pay the highest rates in the Pacific Northwest.

    PGE's generating assets: PGE owns an interest in several dams, some thermal generating plants and some coal-fired plants. All of these could be sold to a non-regulated company to raise more money for Enron's creditors. If Enron sells the assets out from under rate regulation, which is allowed under federal bankruptcy law, rates will increase by another $300-400 million a year. Indefinitely.

    Pacific Intertie: This transmission line is an asset that makes money for PGE by moving electricity between Canada, the Pacific Northwest and California. It reduces PGE ratepayer costs by an average of $140 million a year. When the Intertie is sold, the new owner gets the $140 million in net annual revenue, not us. Our electricity costs will increase by that amount automatically.

    PGE will have no source of electricity after the generation assets are sold. It will have to buy 100% of its power on the open market; completely susceptible to the whims of the market.

    The time to act is NOW. Under federal bankruptcy law, the OPUC can't prevent the sale of PGE's assets out from under state rate regulation. Once the assets are sold, they are gone for good.

    PGE, and its customers, will be left with something however: empty distribution lines in the street, legal liabilities stemming from numerous lawsuits over Enron's crimes, and the dead hulk of the Trojan Nuclear Power Plant (and over $250 million in costs to dispose of Trojan's high-level radioactive waste).

    Don't just take OPPC's word for it. Read the article in the Sept 19th Portland Business Journal. The PBJ conducted its own independent research, contacting three outside bankruptcy experts. The experts agreed with our attorneys. [Link]

    Read about the effect of having generation assets sold out from under state rate regulation in Montana. [Link]

    Read the prior legal cases we base our conclusions on: In re Pacific Gas & Electric Co., 283 BR 41 (ND Cal 2002) and In Public Service Co. of New Hampshire v. State of New Hampshire, 108 BR 854 (D NH 1989). [Link]

  2. A P.U.D. is a non-profit entity owned by its ratepayers. It sells energy at its cost. It does not charge customers for a built-in profit for shareholders or for income taxes on that profit.

    Because it doesn't have shareholders to please, it reinvests in its infrastructure at a higher level than privately-owned utilities. In the recent East Coast blackout, caused by poor maintenance and in the 2001 California energy crisis, caused by market manipulation, many public power utilities kept their energy flowing. We can have both lower rates and a reliable system.

  3. Utility companies enjoy government protection that regular businesses don't enjoy: PGE has a state-granted territory in which to sell an essential service. Utility customers can't switch providers.

    To offset the advantage the utility has over its customers, the customers have the right to create a P.U.D. to buy utility company assets when it serves the common good. This power is called "eminent domain" (aka "condemnation"). It is given to the public by the Oregon Constitution.

    The Constitution does not give the voters the right to acquire other non-utility privately-held companies. Voters cannot "take over" Intel, Nike or your business.

  4. The counties will not lose funding from taxes and public purpose charges.

    A P.U.D. is required to pay property taxes and payroll taxes just as your business does. It's also required by Oregon law to pay franchise fees. A P.U.D. doesn't pay income taxes. But then neither has PGE.

    The difference is that PGE is collecting money from customers to pay income taxes that it knows will never be paid to any government. PGE's parent company, Enron, has huge tax losses that will wipe out PGE's taxable income for years to come. PGE collects the money from customers in our monthly bills and then pays this money to Enron. In 2003 this tax money amounts to almost $2 million a week.

    Since 1997, PGE customers have, as of October 2003, paid over $570 million in phony income taxes to Enron that has never been paid to either the federal or state government. Meanwhile, our schools have the shortest school year in the nation and police stations have closed.

    Public Purpose Charges: PUDs aren't subject to Senate Bill 1149, which requires private utilities to invest at least 3% of their revenue in "public purposes" – low-income assistance, energy efficiency programs, etc. PUDs didn't need SB 1149 to force them to participate in these programs – they already did. Many PUDs spend at least 3%, and some much more, on public purposes. Furthermore, PGE doesn't contribute this money. It charges you for it. Look on your bill – it's a separate line item.

  5. Multnomah County will not lose 2 major corporations because of PGE and Pacific Power moving away.

    Condemning Pacific Power isn't the purpose of the P.U.D. The company can function just as it always has within the P.U.D. boundaries, with no change for its customers or employees. Moving its headquarters away won't prevent the P.U.D. from acquiring its assets, if there's a need to do so. Judy Johansen, Pacific Power's CEO, knows all this; she used to work for public power utilities.

    PGE may or may not move away. It will still have territory outside Multnomah County to serve. Its operations within Multnomah County will be acquired by the P.U.D. As required by law, PGE's employees will be offered jobs by the P.U.D., so those jobs will still be here. Multnomah County won't lose a corporation; it will gain a well-run, locally-controlled utility company. And a secure energy future for businesses.

    A P.U.D. is "business-friendly". Protecting local businesses from even higher rates, gaining control of the generation assets that provide most of our electricity, stabilizing our energy supply - all are factors in creating a more competitive region to keep current businesses & attract new ones.

Oregon Public Power Coalition


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