Power Play

A couple of big-shot lawyers met with newspaper editorial boards throughout the metro area last week. They weren't complaining about libelous stories; they weren't running for office. But Rece Bly and Kevin Padrick were looking for an endorsement of sorts. They see a way to use Enron's meltdown in Houston to help Portland-area ratepayers take control of their power supply. Over the summer, you'll hear a lot about the push to create a publicly owned utility in the metro area--an incredibly important but dauntingly complex issue. Here's a primer to help you follow the debate:

What does Enron's mess have to do with Portland's power?

In 1997, the Texas utility giant bought Portland General Electric. When Enron started to falter, Northwest Natural made a bid for the local electric company, but that deal fell through earlier this year after Enron entered bankruptcy. Now PGE is one of the few valuable assets Enron creditors have. They can keep it as part of a restructured company or sell it to get some of their cash back.

What will the creditors do?

No one knows for sure, but Padrick, one of the nation's top bankruptcy lawyers, has been talking to the creditors' lawyers and seems pretty confident they'll sell (of course, Padrick, who lives in Bend, is insufferably confident about everything).

OK, so where does the public-power thing come into play?

Bly and Padrick are proposing to form a public utility. It would be a new governmental body, Willamette Valley Power, that would provide electricity to everyone who now gets a PGE bill.

What a minute! A couple of lawyers can form their own government?

No. PGE currently does business in significant parts of six Oregon counties: Multnomah, Washington, Yamhill, Marion, Clackamas and Polk. To create a public utility, at least two counties would have to agree to a charter. Under state law, WVP would be a tax-exempt government entity ruled by a board appointed by the counties.

So Polk and Yamhill counties could team up and create a public utility that would provide power to Portlanders?

Technically, yes. But Bly, a Miller Nash lawyer who's handling the political side of this proposal, is working to get all six counties on board. So far, the biggest booster among elected officials is Tom Brian, chairman of the Washington County Board of Commissioners.

What about Portland? I thought City Commissioner Erik Sten was Mr. Public Power?

Sten was talking about public power long before Enron started to melt, and you can expect Brian and Bly to make sure Sten is happy. Sten is warm to the idea but says that, for now, the City Council is unwilling to commit until it hears more about WVP's approach to such items as renewable energy and rates. "I think it is important that Portland keep an open mind in order to protect our own interest," Sten says, "and in case the WVP proves impossible because it needs so many governments to join up."

How would a public utility work? Would county employees come around to check our electric meters and run new wires to our houses?

Only 80 people would be direct employees of WVP. The facilities, distribution and power management would all be handled via contracts with private-sector companies.

So who'd get the contracts?

No one knows, but it's probably no accident that NW Natural has been involved in the talks and seems pretty excited, while the other electric utility in town, PacifiCorp, isn't commenting.

What do the consumer activists say?

The Citizens Utility Board, which represents residential ratepayers, and Industrial Customers of Northwest Utilities, which watches out for businesses, both are backing the plan. They argue that public power companies enjoy tax advantages that should translate into lower rates, and that bringing the power decisions back to Oregon is a plus. "We can sit back, cross our fingers and leave the future of PGE in the hands of a New York bankruptcy court," says CUB exec Bob Jenks, "or we can develop our own alternative and attempt to gain local control of Oregon's largest electric utility." But two of Oregon's most prominent utility watchdogs, Dan Meek and Lloyd Marbet, are skeptical about WVP.

What's their problem?

Meek and Marbet would prefer establishing a public utility district, which would be controlled by commissioners directly elected by ratepayers (rather than those appointed by county boards). Meek also objects to WVP's proposal to buy all PGE assets rather than cherry-picking the profitable ones.

Hang on, isn't Trojan one of PGE's assets?

It sure is. PGE's defunct nuclear plant on the Columbia River would be a part of the deal, meaning local ratepayers would become the proud new owners of a 634-acre riverfront site with residual radioactivity.

What's in it for the two lawyers?

Money. If the plan goes through, WVP would need legal advice, and Bly has positioned Miller Nash to get the bulk of it. In addition, WVP would need to sell at least $2 billion worth of revenue bonds--a job Padrick would almost certainly get.

What happens next?

Padrick and Bly will continue to rally the six counties behind WVP and nail down votes of support before year's end.

WWeek 2015