Governor: Portland best deal for PGE
PORTLAND, Ore. (AP) – Gov. Ted Kulongoski told Enron Corp. interim CEO Stephen Cooper on Wednesday that this city is the best bet for buying Portland General Electric, Oregon’s largest utility, from the bankrupt Texas energy giant.
Kulongoski met privately with Cooper on a visit to PGE headquarters to discuss the state role in the city offer made after state regulators rejected a $2.35 billion deal with a Texas investment firm last month.
The governor made clear the state will not offer a competing bid, and is only interested in making sure outlying counties in the utility’s service area are represented on the board of any municipal utility that is created to purchase PGE.
“There is going to be one offer,” Kulongoski said. “They’re going to have to deal with the city.”
State Sen. Ryan Deckert, D-Beaverton, had introduced legislation that would create a new public company, Oregon Community Power, to buy PGE and manage the utility under the oversight of a seven-member board appointed by the governor.
But Deckert said Wednesday he met with Kulongoski and agreed it was best for the state to focus on how the utility will be managed and let the city work out the financial details.
“We knew all along we’re not going to get in the position where we’re bidding against the city and driving up the price,” Deckert said. “We all agree one proposal is needed.”
Kulongoski noted the city has already prepared a plan over the past year with the help of attorneys and investment bankers who are ready to move on a deal.
After Texas Pacific, a Fort Worth investment firm, formally withdrew its bid for PGE earlier this month, Cooper announced Enron would proceed with a stock distribution plan already authorized as a contingency measure under the bankruptcy reorganization approved last year by a federal judge in New York.
Under the distribution plan, PGE would seek a listing on the New York Stock Exchange or Nasdaq Stock Market, allowing the company to regain its former status as an independent investor-owned utility.
But Portland city Commissioner Erik Sten, who has developed the city offer over the past year, has noted that the major Enron creditors are banks that typically prefer cash right away rather than waiting for stock that could take a year to issue.
“Very frankly, I think Enron is interested only in one side,” Kulongoski said, referring to a cash offer.
Mayor Tom Potter and Sten met with Cooper in the afternoon “to get acquainted and talk about expectations,” Potter said.
The meeting was not a negotiating session but the key issue now “is the price tag,” the mayor said
A team of city officials will meet with Enron managers some time next week to begin talks about a potential sale, Potter said.
Portland is one of the last major West Coast cities without a municipal utility. Enron purchased PGE in 1997 and tried to sell it twice before declaring bankruptcy in December 2001.
