It may come as a shock to you that after more than two years, Enron has not yet sold off all its assets. One of the last potential sales to be made is of Portland General Electric, which provides electricty to millions of people in the Portland, Oregon area. Just a
few hours ago the Portland Utility Board denied the buyout bid of the Texas Pacific Group, a buyout firm that manages over $13 bill in investments. Today's denied purchase would have rung to nearly $2.5 bill.
Why was it denied? Why is this important? Read below the fold.
First of all, this is important because it was a decision predicated upon citizen concerns. KOPT (a Eugene radio station that delivers news from Oregon Public Broadcasting, National Public Radio and Air America Radio) is reporting that over 900 citizens spoke at the hearings held by the Portland Utility Board, and most of the spoke against the buyout.
There was also geniune concern that TPG was concerned only with short-term profits. There was even some evidence that TPG had planned to both hike rates and neglect capital spending to obtain short-term profits at the expense of long-term viability.
However, this is not the first time that a company has offerred to buy PGE, been approved by anti-trust authorities and Enron's backruptcy court, and been denied by the PUB. In 2002 Northwest Natural, which provides natural gas for much of Northern Oregon, bid on PGE as well. Officially, the reason for this was concerns over an energy monopoly in the area (though the merger had passed anti-trust muster already).
What is really happenning, I think, is that Oregonians are simply suspicious of privately controlled natural resources. One of the more popular rumors flying around right now is that PUB will continue to deny buyout offers from private corperations because they (and most citizens, I believe) want PGE to be sold to the city of Portland and surrounding municipalities.
And here we get to the heart of our energy problems. Deregulization vs. re-regulation.
Deregulation has enjoyed a surge in popularity in recent years, despite the debacle of the California energy crisis. Proponents of deregulation rest their predictions on one very questionable assumption: people who can profit from something are more likely to take better care of it.
I would even say that their premise is true. Yes, deregulated energy companies will be better taken care of; that is, they will make more money. The people who are not getting taken care of, though, are the consumers.
When deciding what rates to set, a private energy company will set rates as high as law and the market will bear. A public company, though, will set rates as low as possible without going bankrupt or drying up new research. Some may say that higher rates are good, as they encourage conservation. Honestly, though, forced conservation in this way is not a good idea. My grandmother is on a fixed income, and I'd rather she didn't freeze in the winter and boil in the summer because she was forced to conserve electricity.
Lower rates better serve us -- you and me. Public utilities don't have to show a profit to shareholders, they don't have to fork over huge CEO saleries, and they don't have to pay taxes. All they have to do is focus on providing the cheapest, cleanest energy they possibly can.
I think that this is an issue we can win, both on the national and local level. Most people are not ideologically motivated concerning energy ownership, they just want low rates and clean fuels. Public ownership gives them this, and it lets people distance themselves from stigmas like that surrounding Enron.
At the same time, it lets us take a little wind out of the turbines of the energy lobby, for whose sake we've dirtied our skies, polluted our waters, stripped our land, and bent politically backward.