Staff Decision Puts Utility Deal In Danger

Staff members of the Oregon Public Utilities Commission on Friday rejected a proposed $3.2 billion merger between Enron Corp. and Portland General Electric Corp., putting the deal in jeopardy.

In their report, the staff said the companies had failed to show the merger would benefit customers.

If the full commission accepts the staff recommendation, the marriage between PGE and the Houston-based natural gas company would be scrapped.

During nearly eight months of negotiations, the main obstacle to the merger has been money. PUC staff members had asked Enron to guarantee $141 million in rate cuts for Oregon customers. Enron’s latest offer of $61 million in savings fell far short of that.

“I think we are irretrievably apart,” said Phil Nyegaard, the PUC administrator who oversaw the staff report.