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This page contains a single entry from the blog posted on April 22, 2005 12:15 AM. The previous post in this blog was KISN FM goodbye. The next post in this blog is Write on. Many more can be found on the main index page or by looking through the archives.

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Friday, April 22, 2005

How about some real "governance"?

Governor Ted quickly folded the state's hand the other day in the high-stakes poker game surrounding the future of Portland General Electric. He made it clear that he isn't going to let the state get too involved in trying to wrest ownership of PGE from private hands. In his current view, the City of Portland is the best potential public buyer for PGE. And since the PGE customers out in the sticks are worried that the city will behave like -- well, like the City of Portland always has, placing New York Times-worthy "big ideas" and foolish PC doctrine above all else -- the state promises that it will exercise control over the "governance" of the company after the city buys it.

The guv's announcement takes the wind out of the sails of State Sen. Ryan Deckert's plan to form some sort of state entity to take over the Enron subsidiary. Ryan's still acting like there's something to talk about, but the last time the governor invited him over to the office to chat, I guess Ryan didn't notice that ornate veto pen set on Chief K's desk. It's over, dude.

Ted's playing this one pretty smart. Now that the cronies of his hero, Neil Goldschmidt, are out of the picture for a private bid, he's suddenly fine with public power. And he's not naive enough to put a cent of state money on the line for it. Let the geniuses at Portland City Hall front all the expenses (many millions), and take all the risk. If they fail, it's the city's, not the state's, millions down the drain. If they succeed, the state can come in and keep the city in check through "governance."

If you don't think this is a Team Goldschmidt comeback to Portland Commissioner Erik Sten, then you haven't been paying attention.

How sad. Governor, if the state is so interested in "governance" of PGE, then why doesn't it immediately undertake some serious reform of Oregon's public utility laws? Why doesn't the state make it illegal for a future private owner of PGE to pull the outrageous stunts that Enron inflicted on the consuming public in Oregon? Why doesn't the PUC adopt rules that clean up the sordid mess that public utility finance appears to have become in this state? Why don't you appoint a set of public utility commissioners who will call private owners of utilities out if they attempt more outrageous ripoffs?

If we had rigorous state "governance" of PGE to begin with, we wouldn't need the city to take it over. Having the fiscal wizards at 1221 SW Fourth become the owners of PGE, and then suddenly "governing" the heck out of it, is closing the barn door after the horse has run out.

Let's let Enron's creditors have PGE. And let's get some real "governance" in place, over them. There's no time like now to start some real regulatory reform.

Comments (6)

The problem is that the electric utilities are bigger and more powerful than the state government. Oregon's lack of any limits on campaign contributions means that the legislators are quite afraid of doing anything that would cause a utility to back the opponent in the next primary or general election. "Governance" of private electric utilities in Oregon is a myth and will continue to be, until there are limits on campaign contributions (see www.fairelections.net).

Re the Deckert bill, SB 1008 (which passed the Senate Businesss and Economic Development Committee today by a party-line 3-2 vote):

I certainly appreciate any effort to make what is now PGE a publicly-owned utility, which I have been urging for over 20 years now. I think that the City of Portland is currently the most promising buyer.

The Legislature at this point should be assisting the City in making its bid. If the City somehow abuses the suburbs (as seems to be the fear of suburban public officeholders), then the Legislature can address this problem in 2007. The Legislature will always retain control over what a municipal utility can do, as such utilities are already governed by statutes (such as ORS Chapter 225, which limits municipal utility rates to charges sufficient to pay their costs and make necessary system improvements).

The City of Tacoma has owned its electric utility for years (as has Seattle, Eugene, McMinnville, and over 2000 other cities). Over 44% of Tacoma's electricity customers live in the suburbs that are not part of the City of Tacoma. Those residents and businesses have no official say at all in what Tacoma Power does. Tacoma Power is run by the City of Tacoma, which itself is run by a city council elected by the voters of Tacoma only. Yet, there appear to be no complaints from the disenfranchised. Instead, other suburbs are, I am told, asking Tacoma to expand its system to include them (and remove them from Puget Sound Power & Light Company).

A few other notes about SB 1008:

1. It forbids the new entity, Oregon Community Power (OCP), from using eminent domain for the purpose of acquiring the PGE assets. The City of Portland retains its eminent domain powers and thus could bargain more effectively with Enron.

2. It forbids OCP from applying for or receiving federal preference power. Since over 2/3 of that power is now sold by BPA (from the 30 federal hydroelectric dams in the region, along with the WPPSS 2 nuclear plant) to publicly-owned utilities in the state of Washington, this is a costly provision. If you wanted to "hold harmless" the existing publics in Oregon, you could do that at 1/3 the cost by allowing OCP to obtain federal preference power and then simply requiring OCP to the existing Oregon publics them 1/3 of the benefit OCP obtains by buying preference power from BPA (perhaps by contributing more to the public purpose funds for conservation, etc.). Instead, SB 1008 confers a huge benefit on Washington utilities, preserving Washington's economic advantage over Oregon.

3. It allows any or all non-residential customers to leave the OCP system (bypass) but continue to use OCP distribution and transmission lines to bring in power from any other source, including private utilities. Thus, while the business community hates condemnation (see item 1), they wish to reserve the right to leave the OCP system entirely, thus placing the entire cost of acquisition (at a higher price, due to lack of bargaining power) and operation upon the residential ratepayers, who cannot leave.

So, SB 1008 could be improved.

As time appears to be crucial here, the City should proceed with its bid to buy PGE, with any assistance it may request from the Legislature. Any other entity, such as OCP, created by the Legislature, should not attempt to buy PGE until and unless the City bid fails.

Uh Dan, this is Jack Bog's blog, not Dan Meek's blog.

No no, always glad to gear from Dan, at any length.

There are no "geniuses" left at PGE either, in fact they behave just like socialists anyway these days..so who cares who owns them, it couldn't be worse (have you checked your bill lately) and they have the audacity to charge extra for "hydro" as a renewable that we've had available forever !! it's all phony these days, with the State and PGE imposing Kyoto Agreement behaviour when the US is not a participant ???

What shall we call the City of Portland once the there is no longer a geographic or jurisdictional boundary, and further mission creep?

Shall we create an entirely new non profit entity to replace it and then have the two competing entities, each of which are claiming to be the real City of Portland (with the unique sovereign power to compel taxation), and then compare features to see which of the two most resembles a city?

Alternatively, the entity that now calls itself a city could spin-off a subdivision to represent core city functions (related to sovereign power) and the remainder can go off and do whatever it does free from any sovereign authority to compel taxation.

One WPPSS-related case inquired into the authority of the entities at the outset of deal making that long preceded the dispute. The current PGE dealings of the City of Portland must be confined both jurisdictionally and geographically or it will not be free from disputes about how to cover any bonds or other obligations that might relate to a PGE purchase. I would say that the "city" is not the proper entity here, unless it is so confined.

Ted and Tom are giving folks like Diane Linn just one more example that the law does not apply when the expediency of public policy choices of elected officials requires that law be ignored. The legal system exists not to confine only residents of a geographically-limited mutual aid society, such as within a city, but the elected folks too. Ted's statement about opposing competitors to the CoP plan to go after PGE is as bold, or bolder, than any issuance of marriages offered by Diane Linn. It invites chaos that will be resolved only by the whims of politicians. I do not want to know who supports what or not I want to know upon what authority they think they can act.

Can Ted, with a waive of his hand that he will not prevent the CoP from overreaching, make the CoP overreach legal? Yes, but only temporarily, only because no one has the courage today to confine the function of the City of Portland.

If in twenty years the voters of the City of Portland pass an initiative to unincorporate . . . what authority would a judge have to nevertheless impose a burden (related to PGE, beyond it's geographic and jurisdictional boundaries) solely and uniquely upon the residents of the newly unincorporated City of Portland?

The bond lawyers surely must have read the Oregon case dealing with the largest electricity boondoggle in these parts and the wishy-washy assumptions that fomented to scheme . . . WPPSS. Someone needs to tell the Tom, who does not have a legal education, that the CoP purchase of PGE is so far out of bounds for the function of a city that it is total lunacy. This is not to say that the idea of public ownership is bad or good. Ted, who does have a legal education, has no excuse whatsoever to play dumb to the law and to actually assert that he will not stop the City of Portland. The state must do with the City of Portland exactly as they did with Diane Linn and the MC4 on the gay marriages, because of the issues related to authority to act, on behalf of a city. Ted does not have the right to abandon objections to the CoP overreach, and his abandonment does not make that COP plan any more legal than without that whimsical political choice on behalf of the big bad bond folks (and the bond lawyers) licking their chops at yet another business opportunity.

What shall we call the City of Portland once there is no longer a geographic or jurisdictional boundary, and further mission creep?

Shall we create an entirely new non profit entity to replace it and then have the two competing entities, each of which are claiming to be the real City of Portland (with the unique sovereign power to compel taxation), and then compare features to see which of the two most resembles a city?

Alternatively, the entity that now calls itself a city could spin-off a subdivision to represent core city functions (related to sovereign power) and the remainder can go off and do whatever it does free from any sovereign authority to compel taxation.

One WPPSS-related case inquired into the authority of the entities at the outset of deal making that long preceded the dispute. The current PGE dealings of the City of Portland must be confined both jurisdictionally and geographically or it will not be free from disputes about how to cover any bonds or other obligations that might relate to a PGE purchase. I would say that the "city" is not the proper entity here, unless it is so confined.

Ted and Tom are giving folks like Diane Linn just one more example that the law does not apply when the expediency of public policy choices of elected officials requires that law be ignored. The legal system exists not to confine only residents of a geographically-limited mutual aid society, such as within a city, but the elected folks too. Ted's statement about opposing competitors to the CoP plan to go after PGE is as bold, or bolder, than any issuance of marriages offered by Diane Linn. It invites chaos that will be resolved only by the whims of politicians. I do not want to know who supports what or not I want to know upon what authority they think they can act.

Can Ted, with a waive of his hand that he will not prevent the CoP from overreaching, make the CoP overreach legal? Yes, but only temporarily, only because no one has the courage today to confine the function of the City of Portland.

If in twenty years the voters of the City of Portland pass an initiative to unincorporate . . . what authority would a judge have to nevertheless impose a burden (related to PGE, beyond it's geographic and jurisdictional boundaries) solely and uniquely upon the residents of the newly unincorporated City of Portland?

The bond lawyers surely must have read the Oregon case dealing with the largest electricity boondoggle in these parts and the wishy-washy assumptions that fomented the scheme . . . WPPSS. Someone needs to tell the Tom, who does not have a legal education, that the planned CoP purchase of PGE is so far out of bounds for the function of a city that it is total lunacy. This is not to say that the idea of public ownership is bad or good. Ted, who does have a legal education, has no excuse whatsoever to play dumb to the law and to actually assert that he will not stop the City of Portland. The state must do with the City of Portland exactly as they did with Diane Linn and the MC4 on the gay marriages, because of the issues related to authority to act, on behalf of a city. Ted does not have the right to abandon objections to the CoP overreach, and his abandonment does not make that CoP plan any more legal than without that whimsical political choice on behalf of the big bad bond folks (and the bond lawyers) licking their chops at yet another business opportunity.

(Tangentially, does the court system offer a mechanism to reach the merits of this authority issue today if all the elected officials choose, simultaneously and uniformly, to collectively ignore the law? Can one person stroll in to court to make the necessary arguments about authority and obtain standing to object and also have the court recognize the existence of a justiciable controversy so as to limit the City of Portland even if the state does not want to do its' job?)

What obligations can be compelled of the residents of the City of Portland if they choose to unincorporate? If the obligations cannot be compelled of the residents independent of the present city choices then they do not belong in the scope of the present city choices. This is an unequivocal and clear case for the state to deal with this larger geographic and jurisdictional matter.


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