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News Release
Commission Approves Sierra Pacific Resources PGE Acquisition
October 30, 2000 (2000-052)
Contacts: Ron Eachus, Chairman, 503 378-6611; Roger Hamilton, Commissioner, 503 378-6611; Joan H. Smith, Commissioner, 503 378-6611; Bob Valdez, Public Information Officer, 503 378-8962
Salem, OR - The Oregon Public Utility Commission today gave its approval for Sierra Pacific Resources to acquire Portland General Electric from Enron Corporation. PGE currently serves about 700,000 customers in the northern Willamette Valley, including Portland and Salem.
In approving the transaction, the Commission's order concluded the acquisition is in the public interest, a requirement of state law.
"We approved this based on guarantees that rates will not increase as a result and customer service will not suffer, and that prior PGE investments in renewable resources will be maintained,'' Commissioner Roger Hamilton said. "Under Oregon's new restructuring law, Sierra Pacific ownership will not inhibit competition where it is appropriate and benefits Oregon customers."
After October 1, 2001, the PUC order will freeze PGE's distribution, transmission, and customer service rates for six years and will provide customers with a $95 million "credit." The rate freeze does not affect PGE's ability to adjust prices in response to wholesale electric costs and the amount the company pays for fuel to power its generation plants. Between now and October 1, 2001, the Commission will review PGE's rates as required by Oregon's direct access law SB 1149. Also, in another filing, PGE has requested a 13 percent increase in rates to recover increases in generation power costs.
The $95 million dollar customer "credit" will be provided to customers over seven years, as a credit on bills. The "credit" will begin as soon as the transaction is complete and will continue through Sept. 30, 2007. It's estimated the credit for an average monthly residential bill will be 87 cents.
The credits are in addition to those originally approved in the Enron purchase of PGE several years ago.
In addition, the agreement spells out 30 different protections for customers that guarantee a continued high level of service quality and reliability for PGE customers.
Sierra will assume PGE's agreement to support Oregon's restructuring legislation, SB 1149. Earlier this month the utility submitted a filing with the PUC to unbundle its electric prices. The unbundling of prices is accomplished by separating the generation, transmission and distribution components of a customer's bill.
Last November, the Reno, Nevada-based utility announced plans to buy PGE, a subsidiary of Enron, for $3.1 billion.
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