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March 11, 2005

Texas Pacific's purchase of Enron Oregon utility scuttled

The Oregon Public Utility Commission announced Thursday that it had decided not to approve Texas Pacific Group's proposed $2.35 billion purchase of Enron subsidiary Portland General Electric because "the potential harms or risks to PGE customers from the deal outweigh the potential benefits." Here are the earlier posts on this situation.

PGE is Oregon's largest utility with about 755,000 customers. Texas Pacific is the closely-owned Fort Worth investment firm that has been trying to buy PGE out of Enron's bankruptcy estate for more than a year despite widespread public resistance in Oregon. Even such major industrial customers of the utility such as Intel Corp. came out against the deal.

State law required the state regulators to decide whether ratepayers would benefit from the takeover and that no public harm would result. Inasmuch as the commission could have approved the deal outright or conditioned approval of a sale on certain additional requirements, the outright denial of the proposed purchase is a crushing defeat for Texas Pacific and Enron creditors.

If Texas Pacific does not win an appeal of the utility commission's ruling, then Enron's creditor's committee will essentially decide what to do with PGE. The two most likely results are just to distribute new stock of the utility among Enron creditors or reopen the bidding for the utiity. Representatives of the City of Portland has publicly stated that it would make a bid for the utility.

Posted by Tom at March 11, 2005 05:02 AM

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