PORTLAND – Enron Corp. said Thursday that it has ended negotiations with the city of Portland over the purchase of Oregon’s largest utility, after the two sides could not agree on Enron’s demand for a $50 million deposit, payable even if the deal soured.
Portland was prepared to offer $2 billion for Portland General Electric, plus assume about $650 million of the company’s debt, via revenue bonds, Portland City Councilor Erik Sten said.
Sten said that was equivalent to the asking price named by Enron interim CEO Stephen Cooper; Thursday was the first time the city has publicly said how much it was offering for the utility.
But in a letter to Portland Mayor Tom Potter, Cooper said that Enron – which went bankrupt amid a spectacular accounting scandal in 2001 – did not “see a plausible solution under which our teams could reach an agreement that would lead to a transaction closing in a timely fashion.”
Sten said negotiations came to a halt two or three weeks ago, when Enron, which is now a private company, informed the city that it wanted $50 million in a nonrefundable deposit, even if the deal fell apart for reasons beyond the city’s control.
“At this point, under these terms, the negotiation is over,” Sten said. Should Enron’s interest in the deal resurface without the $50 million deposit requirement, “we will be glad to talk about it,” he said.
Also Thursday, Oregon Gov. Ted Kulongoski announced that he would veto a bill that would have created a public corporation to buy and operate PGE, effectively ending any immediate chance for PGE to become publicly owned by an Oregon entity. Kulongoski said he did not want the state to be liable for the purchase and operation of the utility.
The company was concerned about community opposition to a city purchase of PGE, Enron spokeswoman Jennifer Lowney said, such as a signature-gathering drive currently under way that would ask voters whether the city should be allowed to undertake the deal.
Sten accused PGE and Enron of helping to bankroll those opposition efforts, and said that other concerns – like those raised by officials from cities outside Portland that are also served by Multnomah County – could have been resolved.