Portland General Electric

Portland General Electric (PGE) is an investor-owned electrical utility that distributes electricity to customers in parts of Portland, Oregon, as well as parts of Multnomah, Clackamas, Marion, Yamhill, Washington, and Polk counties - half of the inhabitants of Oregon. In 2002, PGE reported revenues of almost $1.9 billion, and earnings of $66 million.

Although PGE receives most of its electricity from the Bonneville Power Administration, it also produces its own power from a series of hydroelectric sites at dams on the Sandy, Clackamas, Willamette and Deschutes rivers, as well as a number of fossil fuel plants. Between 1976 and 1993, PGE operated the only nuclear power plant in Oregon.

Corporate Officers

PGE currently has 11 corporate officers, who include Peggy Y. Fowler (CEO and president, and James J. Piro (CFO, executive vice president, and treasurer).

History

The utility was founded in 1889 by Patrick Morey and Edward Eastham as Willamette Falls Electric. This corporation installed a hydro-electric generator at Willamette Falls to provide electricity to Portland. In the process, this corporation completed the first long-distance transmission line in the United States on June 3 of that year.

Willamette Falls Electric changed its name several times before settling on Portland Electric Power in 1932. Portland Electric Power was reorganized as PGE in 1948.

Ballot measures have been filed by activists several times since the 1960s to convert some or all of PGE into a Public Utility District (PUD), the latest of which was in 2003, and most have been unsuccessful. An exception was in 1999, when PGE announced it was selling its customer base in St. Helens, Scappoose, and Columbia City to West Oregon Electric PUD for $7.9 million. The terms of this sale would leave the physical assets of the distribution system -- the poles, wires and other components -- owned by Enron, who would then manage this system as a contractor exempt from state regulation. Voter distrust of both Enron and PGE was severe enough for them to approve the measure, despite $71,592 being spent in advertisements to oppose it, in comparison to the $2,304 spent by supporters. This resulted with those three cities becoming part of the Columbia River PUD on terms far more favorable to the customers; electricity rates immediately dropped in these cities, and remain lower than those for current PGE customers.

On July 1, 1997, Enron Corporation bought PGE for $2 billion in stock and $1.1 billion in assumed debt. Then in 1999, and again in 2001, Enron attempted to sell PGE to other investor-owned utilities. The corporate officers of PGE have claimed that this utility was not involved in the financial misdealings of its owner, pointing to the fact that many of its employees suffered when Enron froze the 401(k) retirement plan and were unable to sell the rapidly declining stock. However, John Forney, an energy trader who invented various electricity trading strategies such as the "Death Star", operated from the trading floor in the PGE corporate offices.

Concerned by uncertainty that the Enron bankruptcy would bring, several local governments began investigation of acquiring PGE by condemnation. These studies were ended following the announcement on November 17, 2003 that a group called Oregon Electric Utility, led by former governor Neil Goldschmidt and backed by Texas Pacific Group, offered to buy PGE for $2.35 billion. This was the sole bid received by the bankruptcy judge, who has approved the bid. When details that Goldschmidt had been sexually involved with a minor in the 1970s emerged, he withdrew from the negotiations, and was replaced by Peter Kohler, president of the Oregon Health and Science University.

Many local groups voiced their suspicion that Oregon Electric Utility would be run to maximize profits short-term, rather than to the customers' benefits. These groups included Industrial Customers of Northwest Utilities, Associated Oregon Industries, the Citizen Utilities Board, as well as the majority of cities and local governments in PGE's service area. This purchase offer was denied by the Oregon Public Utilities Commission, a three-member regulatory board, on March 10, 2005.

Discomfort over the Texas Pacific purchase led to a number of voter initiatives to convert parts of PGE into PUDs. PGE has so far defeated measures in Multnomah County (November 14, 2003), Yamhill County (March, 2004), and Clackamas County (May 18, 2004).

PGE received notice of a strike by 900 union workers, effective March 8, 2004, represented by the International Brotherhood of Electrical Workers. Points over which the negotiations broke down include retiree medical benefits as well as losses in the members 401(k) plan. This labor dispute was shortly afterwards resolved, and the union agreed to a new contract.

With the rejection of the Texas Pacific Group's offer, the City of Portland has announced it has contacted Enron to resume negotiating an offer to purchase PGE.

External links

• PGE official website (http://www.portlandgeneral.com/)
• OregonLive Coverage of Enron and PGE (http://www.oregonlive.com/special/enron/)