I think the answer to your question is that the city council knows that once Enron divests itself of PGE and PGE stock becomes publicly traded, there is zero chance that the city could afford to buy PGE or its assets.

Your article indirectly raises a question I have had since the beginning of all this. If PGE is not going to be publicly owned (as it probably should be), why should I care which private entity owns it? Rates and service standards are regulated by the PUC. The PUC needs to develop the expertise and "backbone" to protect ratepayers against unjustified rate hikes and improper accounting tricks (like the current tax collection scam). If the PUC knows what it is doing and does its job correctly, I don't think I care if Satan himself owns PGE.

Just a speculation-

Enron is in BK and the stock of PGE is one of the few valuable assets left. Portland may be stalling the spinoff of PGE from Enron's estate in order to gain some kind of judgement against Enron enabling them to be a creditor getting a chunk of the PGE stock.

If Enron's interest is handed out prior to Portland gaining some type of ruling, compromise, or other legal foothold they may just have an empty promise to some share of the worthless remainder of Enron's assets.

Other than that maybe the Portland's city council likes the press they get when fighting PGE whenever they get a chance.

-DarePDX

Jason/WAG: I don't think your bankruptcy analysis is correct. While I don't profess any intimate familiarity with the Enron bankruptcy (given its size and complexity, few could probably have such familiarity), I would be surprised if judgment creditors would be getting that much better treatment than non-judgment creditors (i.e. creditors who have a claim but never reduced the claim to a judgment). And even if any Enron plan would distinguish between those classes of creditors, I suspect there are not many judgment creditors, given that the bankruptcy happened relatively quickly on the heels of Enron's "success" (so there wasn't much time to get a judgment).

The answer to this question would be best provided by the lawyer(s) that submitted the City's claim in the bankruptcy case.

That may be the case. He posed the question and that was the conspiracy theory I weaved with the knowlege I've got.

I do believe though that if the city got a judgement in relation to taxation or fees owed the city it would be front of the line with the creditors right after the feds and state governments. I really haven't paid attention since the ruling came down from the PUC and Portland's offer got laughed out of the room. I was really expecting the state of Oregon or even Metro to step in with a real offer.

Given Metro's charter I could defintely see the city of Portland and Metro working together especially given Metro's recent ability to get millions of dollars in bonds without a blink from the voting public. If David Bragdon was pitching a PUD instead of Erik Sten it probably would have past the first time up to bat. He's got more credibility than Sten as well as a cooler title.

The prime concern of everyone I have dealt with who supports making PGE publicly owned is that ratepayers and taxpayers no longer be gouged to fatten utility profits and asset value. State law demands that ratepayers benefit from any change in ownership. PGE is arguing that eliminating Enron ownership is sufficient ratepayer benefit. The City of Portland is arguing that a more concrete benefit - lower rates - should be offered as part of the deal. There are many ways that Enron/PGE management decisions have caused rates - and collected "taxes" to skyrocket. This is an opportunity to reduce the level of overcharge. It seems like a sound demand to me.

Civiletti's comment gets to one question to which I alluded but didn't draw out. I don't take issue with the city pushing for a particular outcome, particularly if in doing so, they're pushing for rate-payer benefit...until that is, the perception that they're pushing against a brick wall enters the frame.

That's why I mentioned the issue of the city's bid being dead. Does the city hope that the February hearings will drag more malfeasance into the light and that that, in turn, will somehow generate sympathy for a second (no, it's third isn't it?) bid at public ownership? Are they trying to hold out for another buyer, one who will make some concrete promises regarding rates and other consumer benefit?

The question of the viability of the city's bid seems pretty central to me. I'm more inclined to favor their approach if there's a chance in hell (hey, we're dealing with Enron here) that they're pursuing live options; basically, I'm wary of the inklings of vendetta. If the public bid is really hopeless, I suppose I'd prefer that they focus on sorting out the mess with taxes and moving on. If they can do this with the spinoff going forward, I say they let it happen and focus on realities they can affect.

Jeff,

In answer to your direct question in the post, I don't think we lose any leverage. We are going to finish the inquiry into the taxes and then take whatever actions are appropriate based on the results. Though I didn't think we would get it, there were two reasons we asked for delay.

1) The first is our consistent postion that the stock redistribution is too risky. The argument against it is best summarized in Nigel Jaquiss' cover story from Sept. Read it for yourself:

http://www.wweek.com/story.php?story=6720

I don't believe that the stock redistribution will end up with a local, publicly traded company. The debt, which will become stock, is being traded in what Enron CEO Steve Cooper described to me as a "vulture market." PGE and Enron claim they do not even know who currently owns it. While public markets require five percent disclosure of ownership, this situation does not. So, the PUC could find itself with an owner who does not need their approval, as the deal is done.

History shows, through this tax issue and others, that the schemes to make money are more nimble than the regulations. Add large out-of-state and/or international holding companies and other sophisticated owners to the mix, and the outlook gets worse. This problem is enhanced by the recent repeal of national regulation in this arena (PUHCA), which brings a lot of potential big players like General Electric or Berkshire-Hathaway to the table.

So, the PUC has passed on a chance to require a rate concession or any other consumer-protection measure, while giving the CEO of Enron three to seven years to sell the company out of public view.

That's why we opposed the proposal.

2) We also believe there may have been serious problems with the local and state taxes. While we investigate that situation, we think the PUC would have been well-advised to wait. PGE has stock that could have been re-issued. It was not necessary to create this new stock, which makes one ask why Enron wants to take this approach. It appears likely they are trying to wash the stock of any connection to Enron. That way PGE is stuck with any and all liabilities.

If we are not going to have a public utility--and we don't have a secret scheme to get one--then we must use every avenue to protect the interests of residents, businesses, and the city as a corporation. The PUC missed that opportunity, and I think they seemed relieved to try to put the whole thing behind them.

But not a thing has changed to bring down rates, or bring clarity to all the questions about the practice of collecting taxes but not paying them.

Perhaps, as the spin machine claims, we'll see a return to the old, independent PGE, or a clean purchase by another buyer through the PUC process. We would still have the problems, but that's the best case scenario. I think there are other, more likely, possiblities that give us even less control over rates. I think the PUC missed a real important opportunity. Nonetheless, we will continue to press for rate reductions and laws that don't allow utilities to play games with tax laws and accounting procedures.

My best,

Erik Sten

Based on past performance, the chance of OPUC doing its job "correctly", with all the political pressure that the IOUs put on the governor and legislature, is about the the same chance as hell freezing over, whether Satan is at home or presiding over a PGE board of directors meeting in Portland.

As long as PGE remains an investor-owned utility, a publicly-owned entity can proceed with condemnation to take over almost all of its assets.

Dan Meek's lawsuit seeks $7 million for taxes specifically paid by Multnomah County ratepayers. As far as I know, there's no lawsuit for the state and federal taxes we paid that got pocketed.

Visit here and click the Oregon PUC link (left menu, bottom item) to view examples of their lack of due diligence.

View here to see how former commissioner Joan Smith profited from her tenure on the PUC.

Also visit the Utility Reform Project for PGE-related background information.

In addition to other info at URP's site, there are details about how PGE has been fighting, since 2000, a Trojan-related lawsuit seeking ratepayer refunds of over $300 million. PGE has charged us for investment costs and earned a profit on Trojan in violation of a voter-approved initiative. Use the site's search engine.

As I sit here iced in after a 90 minute power outage, I have to say I am more leery than ever about a government run version of PGE. My power went off last night at 11:15pm. I noticed the PGE crew arriving just 25 minutes later....the had power restored within an hour. I find it BEYOND comprehension that a bunch of civil service employees would provide anything near that level of service.

Our 911 organization is a classic example. Since being put under the esteemed (union oriented) Randy Leonard, management's ability to direct and discipline the union employees has been drastically neutered by commissioner Leonard. Absentism has risen to pathetic levels, expectations of employee performance have dropped, and the cost to run this bureau has risen.

Putting something as critical as PGE under the control of similar career government hacks would eventually either raise rates or greatly dimish service.

Just a thought.

For another take on PGE customer service, check out

PGE Intentionally Turns Off The Power During Ice Storms? from troutdale.blogspot.com.

What Robert Canfield's above post doesn't mention is the intended power outage affected one household.

I'm not saying even one household should have their power turned off in these kind of conditions, but if you get advance notice you can heat your home up to 85 degrees, and then watch it tick down for the next five hours. Big deal.

The PGE "scheduled" outage is part of a utility undergrounding project paid for by the City of Troutdale. A more accurate statement by "just the facts" would have been: "only one household complained to the City of Troutdale".

In case you missed the point of the post, it took four phone calls to PGE by the ONE customer, plus several e-mails from City of Troutdale staff and myself, just to get a decent response from PGE. What happens to other PGE customers who called about the scheduled outage but lost patience with this kind of runaround?

I realize that by now most of us are used to the poor customer service that passes for acceptable at most places, including DMV, most cellular phone companies, or your local fast food joint. But when you're talking monopolies like PGE, Pacificorp, NW Natural Qwest, Verizon etc... I'm sick of it.

The old Bell System unofficial motto, "We don't care, we don't have to", is alive and well.

Robert Canfield obviously has his own "anti PGE at any costs" agenda. I have no idea what it origin was but his constant diatribe lacks any credibility.

I'm not anti-PGE at all. What I am is anti poor customer service and anti bureaucrat. If the lousy customer service shoe fits, PGE certainly has the capability of putting on a better pair of shoes. I didn't make any of this stuff up. I just brought to light PGE management's own words...

In response to "Just the Facts", the scheduled outage will affect over 50 homes.

All PGE has to do is play nice with its customers and not send them on rude wild goose chases.

The question remains, though. Who would be better at running an electric utility- the private sector or the City of Portland?

Is the City of Portland more accountable than PGE? I think you could make plenty of arguments for and against both.

Personally, I think the City of Portland should concentrate on its essential services - police, fire, streets, water etc. and stop playing around with baseball stadiums, takeovers of electric companies, subsidizing million dollar condos, or building Disney trams.

We can all speculate on whether publicly or privately owned utilities do a better job based on our political inclinations, or we can look at the facts. It is clear that publicly owned power is less expensive, especially less expensive than PGE. The customer service and reliability records of publicly owned electric utillities are excellent. For info, look here

The link in the text of Tom's post is incorrectly formatted. I assume he was pointing to www.cheappower.org

Tom Civiletti says, "We can all speculate on whether publicly or privately owned utilities do a better job based on our political inclinations, or we can look at the facts. . "

He then suggests looking for more information at cheappower.org, supposedly where we will find information that is not based on "political inclinations".

cheappower.org is sponsored by the Oregon Public Power Coalition, which is supported by such non partisans as the Democratic Party of Multnomah County, the Democratic Party or Clackamas County, the Democratic Socialists of America, the Pacific Green Party, and Portland Jobs with Justice.

cheappower.org does indeed have anectdotal evidence of some successful publicly owned utilities, but most of the web site consists of PGE bashing. Not that there's anything wrong with that.

However, there is not the balanced, fact based reasoning that you imply.

You guys and your idea of a non-politically oriented web site really cracks me up.

No soup for you.