Oregon blocks PGE purchase

PORTLAND, Ore. — State regulators on Thursday blocked a proposed $2.35 billion purchase of Enron Corp. subsidiary Portland General Electric by Texas Pacific Group, saying the deal was not in the public interest.

Lee Beyer, Oregon Public Utility Commission chairman, said “the potential harms or risks to PGE customers from the deal outweigh the potential benefits.” PGE is the state’s oldest and largest utility with about 755,000 customers.

The privately held Fort Worth investment firm had been trying to build support for the PGE buyout from bankrupt Enron for more than a year despite widespread criticism and resistance in Oregon, including major industrial customers such as Intel Corp.

The decision set the stage for a possible takeover by the city of Portland, which has made an offer to turn PGE into a municipal utility.

But a federal bankruptcy plan approved for Enron last year has already laid out a stock distribution plan that would essentially return PGE to its original form as an independent investor-owned utility if Texas Pacific decides against an appeal of the decision and abandons its proposed takeover.

If Texas Pacific does not appeal, the fate of PGE rests with Enron creditors, who must decide whether to put the stock distribution plan into effect or consider other offers, including the city of Portland’s bid.

John Mangan, a Texas Pacific spokesman, said the firm will review the decision but had no other comment.

Enron spokeswoman Jennifer Lowney said the company “is disappointed with the commission’s decision, but we need time to study the order further before we decide on our next course of action.”

The Oregon commission had been considering the decision for nearly three months since it heard closing arguments on Dec. 14 on a deal to sell the utility.