Could PGE become an Electric Co-op?

By Shantu Shah of Portland, Oregon who describes himself as "Senior Citizen, Engineer, activist, KBOO 90.7 FM Board Member, Secretary of Society for the Performing Arts of India and the Chairman of the Oregon Electricity Board."

The Oregonian story on April 17th titled "Pitch For PGE" for "the city of Portland and the state of Oregon" ignores and seriously undermines reporting of other forms of electric entity such as electric cooperatives underway which would be non-bureaucratic and not burdensome for taxpayers.

Oregon Senate in competition with the City of Portland has created a virtual under-the-table (or behind-the-scenes or back-door) legislation to primarily benefit PGE and its creditors. Senate House Bill 1008 will give PGE a price (3.0 Billion) Enron wants for its assets and an operational control to the present PGE management that's not in the best interest of the ratepayers or the rest of the taxpayers outside the PGE territory. The HB 1008 expands public employees payrolls and other benefits.

It will create an unforeseen extreme deficit budgets and a detrimental effect to the Oregon schools, Seniors and other state programs. State bill gives Governor a virtual veto to select the Oregon Community Power seven-member board management the Governor wants and not the ratepayers.

I testified in opposition to the PGE bill "Oregon Justice Department should investigate if there is a conflict of interest involved for Governor Ted Kulongoski and Sen. Ryan Deckert, HB 1008 sponsor."

Voters must know what price PGE has paid in past campaign contributions to Kulongoski and Deckert. Why would they now preach public interest when they essentially kept quiet during the Public Utility District formation ballots in Washington, Multnomah, Clackamas and Yamhill counties when PGE outspent to extravagantly defeat the measures?

Were they elected by the people of Oregon or the PGE managers? Whose interest Governor and state Senator Deckert are now protecting?

As opposed to both the municipal (Portland) and state (Oregon) controls of PGE, an entity such as electric cooperative, e.g. Oregon Electricity Board I have formed for the PGE territory that would negotiate PGE purchase using the National Cooperative Finance Corporation low-interest financing would be in the best interest of the ratepayers and all taxpayers.

Electric ratepayers as the owners of an electric co-op would elect its board members every year or two and would not be a drag on state budget or the Oregon Public Utility Commission controls. There was no need to create a new legislation HB 1008, rather than using the electric co-op model that's successful in Oregon and rest of the country. It's simply created to help out corporate debt of Enron.

We must stop this growing cancer in our Government.


  • Michael (unverified)

    A question istead of a comment if I may ask? I am guessing that PGE pays property taxes to a number of local governments in the state. How will these different schemes that are being proposed affect those local taxes? Can anyone elaborate on that, or is this too broad a subject? Thank you, M.W.

  • ron ledbury (unverified)

    I had long suspected that one of the concerns of the state folks was for the SALE price of PGE. The Oregon Investment Council had owned a not insignificant amount of Enron stock. Thus the OIC might, through legal tactics, monkey with the precise measure for damages against Enron through creative resolution of the PGE sale. The OIC, as a part owner of PGE, via Enron, wanted to orchestrate the transfer of PGE to TPG where the OIC would again have a not insignificant ownership interest. So long as the OIC has an interest in PGE they can be free from the normal electoral accountability controls usually associated with all government action. By this I mean, the OIC can act arbitrarily and capriciously in electricity pricing decisions (relative to Oregon law) and nevertheless be absolutely immune from accountability for investment losses (by either local government participants in PERS or the PERS beneficiaries as well as upstart activists such as myself).

    It seems that the state just does not want to give up the freedom that they have thus far enjoyed to be free from the restrictions on government action while claiming, all the while, that they are acting always in the public interest. It sounds like they look to Enron for their ethical compass (heck, the elevated speculative prices of Enron stock, before they dropped, did form part of the so-called profit upon which the PERB relied upon when dishing out profits to the accounts of PERS members).

    I would be asking Ron Schmitz some rather pointed questions if I were a public attorney charged with the duty to protect the public from official misconduct. Ron deals with lots of private equity stuff. I would also be asking the outgoing PERS executive director, the one that announced his resignation in the hot late October 2003 period of particular interest.

    When I had tried to stop the Measure 29 bonds in October 2003 through January 2004 I had speculated that there would ultimately be a political resolution notwithstanding any judicial resolution of the issues I raised at the time. Is it possible that my cold speculation may come true after all, and perhaps reach back in time to the Measure 29 bonds and the fakery associated with justifying putting cash into a fund today to cover a PERS payment obligation that is not due and payable until 20 to 26 years into the future (and thus not cognizable in court to compel such borrowing)? The fakery only makes sense if one factors in the lust to use the money to make some state purchases because, as the court recently reaffirmed, a promise to make a payment on a pension is no less secure then a promise to make a payment on a bond, thus making the pension obligation bonds absolutely unnecessary from the perspective of the interests of the PERS beneficiaries.

    I had mentioned PGE only in the context of the inability of local folks to exercise a free speech type of right to boycott any business to which they disagreed. How would one boycott PGE to intentionally make the investors incur a loss if the investor is the state and the state uses the PERS ownership device, and borrowing, to make the taxpayer cover any such loss. I likened the PERS stuff to the late eighteen hundred deals on railroads where every public official and their brother wanted piece of the take. PGE is just too tempting a prize, which is really why the Oregon Constitution and state constitutions across the entire country prohibit government from taking an interest in private stock. The imposition of the limit was a direct response to the abuse of power of elected officials during the railroad building frenzy.

    The team of the AG and State Treasurer and the Gov are like a little group speaking with one voice. Any one of the three could put the brakes on the state effort to buy PGE. Please do not confine your objections to the Gov alone. The existing PUD rules look OK, as you say, and are a better match with the particular electors to whom the district would serve.

  • Tom Civiletti (unverified)

    PUDs, and I am fairly sure, co-ops pay all property taxes and franchise fees paid by privately owned utilities. The fine folks at PGE lied to local officials about this in order to scare them into opposing public ownership. I'm not sure if municipal utilities are required to pay property tax, but I assume that Portland would agree to payments in lieu of taxes to other juristictions with PGE assets.

    <h2>The co-op form would certainly be preferable to private ownership of PGE, but PUD's do have some advantages. At this point, I support the CoP's effort because it is closest to fruition. Although I share doubts about the interests of areas outside the city, I'd rather worry about being screwed by Portland than by the good folks at PGE [with or without Enron] who do it to us every day.</h2>
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