Oregon approves PacifiCorp merger
Scottish Power would be first foreign firm to buy a U.S. utility
SALEM-- Oregon utility regulators on Wednesday endorsed the merger of Scottish Power and PacifiCorp in a deal that will provide customers in the state with $51 million in credits on their electric bills.
The merger, which still must be approved by regulators in four other states, would mark the first acquisition of a U.S.-based electric utility by a foreign company.
Scottish Power, based in Glasgow, provides electricity to 5.5 million homes across Scotland, England and Wales. PacifiCorp, through Pacific Power, serves 1.5 million customers in six Western states, including 485,000 customers in Oregon.
The head of Oregon's Public Utility Commission -- Ron Eachus -- said conditions that have been attached to the merger make it a good deal for consumers and that he thinks the other states will endorse Scottish Power's acquisition of PacifiCorp.
Based on their record in Scotland, this is a company that is very focused on how it performs for the customer, Eachus said.
Under the plan, Oregon customers would receive $51 million in credits over four years beginning in 2001, which would amount to a 1.7 percent annual reduction in their electricity bills, the PUC said.
Plus, Scottish Power has posted service quality guarantees, such as that when the power goes out for more than 24 hours, it will pay a customer $50.
Alan Richardson, who will become CEO of PacifiCorp once the deal is completed, called the Oregon commission's action a significant milestone in our efforts to complete the merger by the end of the year.
We are looking forward to delivering real benefits to customers and communities when the merger is approved in the four remaining states, Richardson said.
Oregon and California now have endorsed the merger, and company officials said they hope to receive approval soon from the states of Washington, Utah, Wyoming and Idaho. Wyoming regulators have endorsed the merger, but their order hasn't become final yet.
PacifiCorp currently employs about 8,000 people, and that workforce might be reduced after the merger is completed.
It's possible that job reductions will ensue, said Rachel Sherrard, spokeswoman for Scottish Power.
However, she said the company won't decide until after the merger is completed how many job reductions it will make.
Eachus said that as they considered the merger proposal, Oregon commissioners took into account the public's concern about the takeover of an Oregon-based company by a foreign-based one.
For that reason, he said, the deal includes a stipulation that all financial records be kept at PacifiCorp's headquarters in Portland.
That means we will be able to have regulatory oversight as if PacifiCorp were a stand-alone Oregon company, the PUC chairman said.
Besides agreeing to the customer credits and higher customer service standards, Scottish Power also has committed to spending $6 million a year on conservation programs. It also pledged to develop 50 additional megawatts of renewable energy within five years.
Roger Hamilton, another member of the state PUC, said Scottish Power has pledged to become a good partner to communities and a good steward to Oregon's priceless environment.
Our approval of this merger reflects our confidence that customers are better served as a result and that electric power is truly an international business, Hamilton said.