Should Portland use eminent domain to seize PGE?

Now that it appears that the sale of PGE from Enron to the citizens of Portland is off, what's the next step? The Oregonian would like to think it's over, since they continue to use the word "failed" over and over.

On the Thom Hartmann Show this morning, over at 620 KPOJ, Thom suggested that we open up a thread here to discuss the idea of eminent domain. According to Thom, Commissioner Randy Leonard told him that there are two votes on the Portland City Council to use eminent domain to seize the assets of PGE - his own (and presumably, Erik Sten's.)

Questions: Is it appropriate for government to use eminent domain to seize a power company? Would it lead to the end result that advocates of public power want? What complications might arise by doing this way? What would it take to convince the rest of the council to go along (or at least a third vote)?

Comments

  • PanchoPdx (unverified)
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    Without public approval this decision will be tied up with another referendum drive anyway (if the current one doesn't succeed).

    Right now, the voters aren't sure if they should trust these guys to organize a bake sale.

    Eminent domain has a lot of limitations that make it an iffy solution at best.

    Undoubtedly, PGE revenues would have gone a long way towards shoring up the Police & Fire Pension/Disability Fund. Must be why Randy can't seem to let it go.

  • PanchoPdx (unverified)
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    When this one gets shot down I suppose we'll have to brace ourselves for the next Blue Oregon topic on the subject:

    Should Portland divert urban renewal dollars to assist a small faction of guerilla-rebel-Marxists within PGE in staging a coup?

  • howard (unverified)
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    Does Portland have "eminent domain" power to seize any PEG facilities or poles and transmission lines that do not lie within city limits?

  • Winifred Polyanna (unverified)
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    Better yet, Should urban renewal be diverted to shore up Air America?

    http://www.twincities.com/mld/twincities/entertainment/television/12277313.htm

    Posted on Tue, Aug. 02, 2005

    Air America Radio is stuck in the ratings cellar

    BY BETH GILLIN

    Knight Ridder News Service

    On March 31, 2004, Air America Radio, promoted as the liberal antidote to conservative-dominated talk radio, was launched with great fanfare.

    Since then, it has generated headlines while losing some stations and picking up others. In April, it fired head writer Lizz Winstead, co-creator of Comedy Central's "Daily Show," who is suing for back pay. TV's Jerry Springer, who is mulling a run for governor of Ohio, is now in her slot.

    Now that it's possible to compare ratings for this spring to last year's start-up, it's clear the network has yet to climb out of the cellar.

    Air America's overall ratings, which rose initially after all the free publicity, faded before the November election and haven't recovered.

  • Tom Civiletti (unverified)
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    Damn right, it's appropriate. The US Supreme Court has ruled that governments can condemn whenever it is in the public interest. This includes property that will be sold to another private party with the expectation of increasing property value and therefore, property tax. Though I find that use heavy-handed, using eminent domain to purchase a PUBLIC utility in order to lower rates and stabilize management seems right in line with the historical use of this power. PGE has been a drag on our economy for a long time. With the repeal of PUHCA in the new federal energy bill, the risks of a privately owned PGE grow. It was the partial repeal of PUHCA in the 1990's that allowed Enron's scams in the first place. Shall we wait to see who will be next to rip off Oregonians?

    Remember, also, that PGE itself uses eminent domain to secure routes for power lines.

    One of the reasons that Washington's economy has historically been stronger than Oregon's is the preponderance of cheaper public electricity there.

  • Jeff Bull (unverified)
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    I wish I had something more solid to provide, but I'll throw out what (I think) I know:

    1) If memory serves, one major argument against condemnation rests precisely on the fact that the city cannot condemn generating facilities outside its boundaries. In other words, we can get some transfer stations, but the generating stuff will require something else.

    2) I wonder about the ability of PGE to legally challenge condemnation and how long that would take. Even leaving aside how it all looks (and, hey, if it clearly improves the situation, why not give it a shot), would the expense and ugliness of a legal fight consume all the benefits? This is a big question in my mind.

    3) Panchopdx gets at something I never considered in all the thinking and reading I've done on this (not huge, but not little either): I'm having trouble seeing a public referendum win over Portland voters as well. Libs and progressives can think this is a bang-up idea all day long - personally, I saw little harm in letting the city try to buy the thing and pass it off to a regional authority to run - but 1) I've seen some inkling of how people within the limited pool of Blue Oregon readers view this and it's split - given that this is largely a lib-progressive site, that split doesn't bode well for Portland as a whole. I think a referendum would lose, possibly badly.

    Overall, condemnation should be viewed as a big, big step, the product of a crisis, really. In my own vague way, I'm not seeing this one.

  • Thedude (unverified)
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    Seems a waste. If 80% wanted PGE in public Ownership it would be doable, but at 50% is would just be a huge brawl. Its time for the public to get what they ask for. Its the only way people learn. They must suffer. From the federal government on down let those in power do what they want to do. At some point the public will catch on, but I don't feel the minority should continue to try and save the asses of the majority. By doing that the minority only make themselves a target. Step back and enjoy the show and stop giving the other side an enemy.

  • hoarse_radish (unverified)
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    obviosuly, the public wants to be continued to be gouged by private, for-profit interests.

    that's what the "grass-roots" effort to prevent Portland buying PGE was all about, remember?

    so the complaints when rates get hiked should be kept to a minimum...

    if Leonard, Sten, Potter, Adams, et. al decided to claim imminent domain, that would be a hugely risky move showing dramatic leaderhsip... do they have it in them?

  • Chris Woo (unverified)
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    Howard wrote:

    Does Portland have "eminent domain" power to seize any PEG [PGE] facilities or poles and transmission lines that do not lie within city limits?

    My understanding is that in Portland, the City technically owns the utility poles. If that's true for other municipalities then condemnation may be less of an issue when it comes to local transmission.

    Also, the City has yet to make public the details/documents of the offer it made to Enron. There may or may not be relevant information within that proposal.

  • Tyson (unverified)
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    The republicans and pooh-poohers still want to perpetuate the notion that the city can't handle an electric utility because of what happened at the water bureau. All governments make mistakes. It's in their nature. Why is it that if our government leaders don't look or act like slick, well-connected lobbyists, it's assumed they don't understand business and public policy?? Cities like Seattle, Ashland, Ellensburg and McMinnville all manage their own electricity, and I find it hard to believe that Portland can't pull it off too. After all, there are 'experts' employed at PGE today who can guide the process along. (Hello! The BPA offices are here in PDX! Experts abound!)

    Don't believe the hype. Municpals, PUDs and Co-ops all offer cheaper power to their customers. Republicans talk all day long about higher taxes... do they actually want to be taxed, er, charged more for power than they can get 'at-cost'?? "Eminent Domain" is such a loaded phrase, but this is one instance where it should be employed for a net benefit.

  • Adam Petkun (unverified)
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    This is a good time to remind you all that you are invited to join the Bus Project at Acme (a great pub at SE 8th & Main) this Wednesday @ 7pm for a lively discussion on PGE. Featuring City Commissioner Erik Sten and other prominent panelists who know more about this than any of us, but still disagree with each other. On the table: the city's now-stalled purchase, all things Enron, and anything else you ever wanted to know about PGE.

    The entry cost is free, there will be specials on food, and the beer will be cold.

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    (An aside to Winifred. KPOJ is now the #1 station in Portland for AM radio. Thom Hartmann's show is the #1 show on KPOJ. Air America may in trouble elsewhere, but not in Portland.)

  • Betsy (unverified)
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    Public ownership of this utility makes total sense. Doesn't it seem pretty clear that any outfit that says, "Give us a $50 million unrefundable deposit or we won't even talk to you any further," has something other than the public's best interests in mind?

    Publicly owned utilities generally have consistently lower rates than those held for profit. And with oil, gas, and all energy resources heading for a serious crash--either this decade or next--now seems like a really opportune time for Portland and the Council to take the leap, risk a few bruises, and lead the way toward something that might actually move us in an ecologically sane, sustainable direction.

    Visionary, decisive leadership is painfully lacking these days in Salem or DC, and it would be great to see our local elected officials continue their recent inclinations toward demonstrating those qualities.

    Public utilities have strong records of investing in and developing sustainable energy sources. To anyone who prefers avoiding resource wars (which describes most wars when you scratch down just a little ways) and the escalating gaps between rich and poor, sustainability and public ownership are going to look like a pretty obvious choice.

    So let's see: who do I trust more to have my kids' best interests somewhere in their agenda, Ken Lay or Tom Potter? Wow, that's a tough question...

  • winifred polyanna (unverified)
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    Kari, Duh on Portland/Air America/KPOJ/Hartman. That only demonstrates how out of the mainstream Portland is.

    The house passed an eminent domain bill 40 to 19.

    All 19 were democrats and the senate democrats will kill the protection the bill would give blue collar, working families.

    As Ed Schultz said today, "people shouldn't fear the word socialism".

  • user (unverified)
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    This whole discussion seems to me to miss the main reason that the PUD went down: Portland's insularity, arrogance, "bull in the china shop", whatever adjective or metaphor you want, regarding the whole process.

    If we had reached out more to other regional governments and leaders and not made this such a Portland gig, I think it could have flown.

    Now eminent domain? The same people who fought Portland quietly in Salem will fight Portland fiercely if we try it.

    If I were at the forum, I'd ask Cmmr. Sten what he learned from this process, where and how the process broke down, and what would he'd do differently. Unfortunately, based on public statements thus far, I don't think I'd hear much other than slams at Enron.

  • Lyndon Ruhnke (unverified)
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    I think that PGE should be owned by the public and if it takes eminent domain to get the ball rolling then let it happen. For anyone who reads this site regularly it should be obvious that there are a few folks who always post on this issue and are not progressive, so this should not be taken as a measuring stick as to public opinion. I love how Sten and Portland are always taking a beating by those opposed to public ownership, but nobody talks about all the misinformation (lies) trotted out by PGE (or their front groups). Costly public takeover my foot.... costly corporate greed is more like it.

  • Steve (unverified)
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    I have to agree with user, Sten seems to drive this in total disregard of anyone outside of city hall while Potter runs interference for him. Maybe Adams could take him out sometime on one of those play jobs he likes to do so he could see what the outside world is like (especially since he has never had a real job).

    We have the highest water rates in the wettest place in the country and you don't think they would manipulate a PUD the same way? Surrounding cities have told CoP they are really nervous (I am being kind) about them running a PUD and people have voted CoP PUDs down repeatedly - Is this guy deaf or blindfolded?

    Sure governments make mistakes (PGE Park, computers, $140 prop taxes on $1M condos, etc.), but you know what they always can take the money from schools/police to pay for these mistakes (like about $3M already on this Quixotic chase after PGE) and make the taxpayers pay for it.

  • ron ledbury (unverified)
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    Jeff Bull, The referendum issue is irrelevant. A judge would look at a decision by a city council and that of an initiative as one in the same with regard to the question of what a city can do. Same for the irrelevance of a even a failed referendum.

    Tom Civiletti, As between two cities, what is the power of one versus another. In this context the power of government, in general, versus private folks to assert condemnation is a whole different ball game. Can the state itself authorize condemnation of poles wires and generating facilities within the state? I suppose yes, but that does not illuminate whether the city of Portland can reach beyond its city limits, regardless of and wholly independent of the concept of the legal boundary of condemnation powers. The proper sequential steps of addressing varied issues was a point all by itself in the Oregon WPPSS court case.

  • Charles Osborne (unverified)
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    Short answer: Yes.

    Short rebut 1.: Portland Water is cheap -- Portland sewer is expensive.

    Short rebut 2.: PGE/Enron "revenues" do NOT shore up police pension, green generation, or anything else - PGE/Enron dribbles off part of the RATEPAYERS payments and returns it BACK to the community.

    Short rebut 3." The City won't "run" the utility on a day-to-day basis -- the majority of the PGE employees will continue to perform their jobs in a highly skilled, and ethical way. A few of the top overpaid toadies and grifters might be convinced to take their leave. As a citizen you know what Tom Potter's salary is. Do you know what Peggy Fowler's salary is? You can -- and regularly do -- vote out city commissioners who displease you with their actions. Can you do that with PGE/Enron directors?

    PUD formation will not not deprive Portland of the utility franchise fees -- it will deprive Enron of skimming off the top. If you keep paying your electric bill the "franchise fee" cash to the city will still flow to the city's coffers.

    If Enron "takes public" their PGE unit by selling stock then GoldmanSachs and the securities industry/accounting industry/PR industry/Legal industry will all wet their beaks and remove yet more value from the local enconomy.

    Yes, condemn the capital plant and return it to the citizens. The same PGE people you see in the advertising puff pieces will still be there to read your meter, sketch windmill designs, and climb the poles in crappy weather to keep your lights on.. And they will get to build a pension that they get to keep for their efforts.

    And as one of Peggy's energy traders said a few years back: "Burn Baby Burn -- isn't it beautiful!" Burn the links to Enron now. Return Portland General Electric to Portland.

  • PanchoPdx (unverified)
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    Ron,

    In regards to the referendum issue, if the City passes an ordinance authorizing use of eminent domain to acquire PGE, then it is subject to referendum so long as the ordinance has a quasi-legislative purpose. If the ordinance was purely an administrative function, then they might dodge a referendum.

    I suppose the City could always pass an ordinance, let it get referred and then pass it in a slightly different version so the petitioners would have to start a second referendum. They could do it until the referendum process was effectively frustrated.

    That would stink to high heaven, though. Recall petitions would be right around the corner.

  • wobbly1 (unverified)
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    Something that nobody ever mentions:

    PGE was used by Enron to commit crimes. If a john or a drug dealer uses their car or house in the facilitation of criminal activities, the proper authorities can confiscate these items. Why can't the same be done for a multi-million dollar fraud case?

    I'm not sure why posters on this site have more confidence in Enron to do right by ratepayers than they do their elected representatives. Do you have a vote on who is on the Enron board? You will if the city takes over PGE.

    These people (Enron) have and continue to steal from us. What do we owe them? My vote is a long prison sentence and the confiscation of the property they used to commit the crime of defrauding Oregon ratepayers.

    This isn't socialism, it's justice with precedent.
    
  • afs (unverified)
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    KPOJ's Spring Arbitron ratings just came back. KPOJ's ratings went through the roof. KPOJ and Air America are the #5 station in the market 12+.

    1. KKCW-FM - AC - 5.8
    2. KUPL-FM - Country - 5.4
    3. KWJJ-FM - Country - 5.3
    4. KEX-AM - News/Talk - 5.0

    5. KPOJ-AM - Talk (AAR) - 4.5

    6. KXJM-FM - CHR/Rhythmic - 4.0

    7. KXL-AM - News/Talk - 4.0

    . . . 21. KPAM-AM - News/Talk - 1.8

    http://www.radioandrecords.com/RRRatings/DetailsPage.aspx?MID=202&RY=2005&RQ=2&MP=0&OTHER=2&MN=Portland&MS=OR&MR=24&12P=1937600&UP=7/28/2005&SU=CM&BPER=&HPER=8.0&OPER=&NSD=10/24/2005&CE=0

    "...The commercial numbers (listeners 12 years and older) are out for Portland Radio:

    The headlines for me are:

    K103 is #1. Progressive (or ultraleft) KPOJ beats ultraright KXL, and is up a full share point from the winter. Two country stations are #2 & #3. The Charlie experiment has dropped numbers for FM97 - they stand at lucky 13th. KPAM remains at death's doorstep - #20, tied with a spanish language station...."

    http://pdxmediawatch.blogspot.com/

  • Dave Lister (unverified)
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    I have never been in favor of the city's purchase of PGE, but I do now regret that I was hoodwinked by the Goldschmidt cabal when we had a chance to form a PUD. If a time machine were available, I would like a do-over on that one. Condemnation is not a sensible option because of the generation problem. If the city condemns PGE's assets within the city limits it will most likely be stuck buying its power from, guess who, PGE.

  • Charles Osborne (unverified)
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    I believe that all PUDs get priority status (and rates) for Bonneville power.

    Seizure of hydro generation on the Bull Run system would also be a good hedge.

    Yeah, condemnation is sub-optimal -- but being entirely at the whim of energy speculators and arbitrageurs is simply not acceptable.

    <h2>Perhaps it is time for Enron to be on the receiving end of the "If you don't sell it to us we'll smash it" mentality.</h2>
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