Portland General Electric
|Type||Public (NYSE: POR)|
|Revenue||$1.805 billion (2012), $1.813 billion (2011)|
|Operating income||$302 million (2012), $309 million (2011)|
|Net income||$141 million (2012), $147 million (2011)|
|Employees||2,603 (2012), 2,634 (2011)|
|References: Financial data.|
Portland General Electric (PGE) is an electrical utility based in Portland in the U.S. state of Oregon. It distributes electricity to customers in parts of Multnomah, Clackamas, Marion, Yamhill, Washington, and Polk counties - 44% of the inhabitants of Oregon. Founded in 1888 as the Willamette Falls Electric Company, the company has been an independent company for most of its existence, though was briefly owned by the Houston-based Enron Corporation from 1997 until 2006 when Enron divested itself of PGE during its bankruptcy.
PGE produces and purchases energy primarily from coal and natural gas plants, as well as hydroelectric power from dams on the Clackamas, Willamette and Deschutes rivers. Between 1976 and 1993, PGE operated Trojan, the only nuclear power plant in Oregon.
The utility was founded in 1888 by Parker F. Morey and Edward L. Eastham as Willamette Falls Electric Company. On June 3, 1889 it sent power generated by one of four brush arc light dynamos at Willamette Falls over a 14-mile electric power transmission line to Portland, the first US power plant to do so. On August 6, 1892, Morey, Frederick Van Voorhies Holman, and Henry Failing formed the Portland General Electric Company. It was funded by General Electric and the investment arm of Old Colony Trust, with $4.25 million in capital. PGE purchased Willamette Falls Electric in 1892.
In May 1893, PGE purchased the City-Eastside Electric Light Plant, a municipal power company. MacColl called it "a generous gift to a private company at the expense of future taxpayers" since it was constructed for a cost of $40,342 and sold 15 months later for $27,000.
PGE also purchased the 1891 Union Power Company in 1905, the 1889 Albina Light & Water Company in 1892, and the 1892 Vancouver Electric Light & Power Company in 1906. PGE, Portland Railway Company, and Oregon Water Power & Railway Company merged in 1906, becoming the Portland Railway, Light and Power Company (PRL&P). It was the only streetcar operator in city limits, and was the predecessor of the modern PGE.
Willamette Falls Electric changed its name several times before settling on Portland Electric Power Company (PEPCO) in 1932. Portland Electric Power was reorganized as PGE in 1948.
On March 1, 1939, the PEPCO defaulted on interest bonds issued in March 1934. The bonds were pledged with PGE (the electric subsidiary) and Portland Traction Company (PTC, streetcar subsidiary) as collateral, with Guaranty Trust as trustee. PEPCO filed for Chapter X bankruptcy (now known as Chapter 9) on April 3, 1939, and was assigned District Judge James Alger Fee. The proceedings were later called "one of the most prolonged and complicated series of legal proceedings in Portland's history".
The reorganization and bond default was brought on by PGE's difficult negotiations with Bonneville Power Administration, the death of Seattle City Light's visionary J. D. Ross, and the indecision created by the possible creation of a Public utility district in PGE's territory. The Columbia Valley Authority project would have allowed CVA to purchase utilities such as PGE.
PGE survived from bankruptcy through selling Portland Traction in August 1946 for $8 million in cash, cheap power purchases from BPA beginning in the fall of 1939, and net profits by the end of 1941. In the meantime, Ormond R. Bean, the Oregon Public Utility Commissioner, forced PGE to lower its rates. Ultimately, PEPCO and PGE were saved by World War II, which led to the construction of three Kaiser Shipyards and of Vanport City, Oregon to support them. By 1945, PGE derived nearly $400,000 in revenue from the two Kaiser shipyards in Oregon.
Judge Fee ruled the bankruptcy reorganization complete on June 29, 1946.
Ballot measures have been filed by citizens several times since the 1960s to convert some or all of PGE into a Public Utility District (PUD), the latest of which was in 2003, and most have been unsuccessful. An exception was in 1999, when PGE announced it was selling its customer base in St. Helens, Scappoose, and Columbia City to West Oregon Electric PUD for $7.9 million. The terms of this sale would leave the physical assets of the distribution system—the poles, wires and other components—owned by Enron, who would then manage this system as a contractor exempt from state regulation. Voter distrust of both Enron and PGE was severe enough for them to approve the measure, despite $71,592 being spent in advertisements to oppose it, in comparison to the $2,304 spent by supporters. This resulted with those three cities becoming part of the Columbia River PUD on terms far more favorable to the customers; electricity rates immediately dropped in these cities, and remain lower than those for current PGE customers.
On July 1, 1997, Enron Corporation bought PGE for $2 billion in stock and $1.1 billion in assumed debt. Then in 1999, and again in 2001, Enron attempted to sell PGE to other investor-owned utilities including Portland based NW Natural. The corporate officers of PGE claimed that this utility was not involved in the financial misdealings of its owner, pointing to the fact that many of its employees suffered when Enron froze the 401(k) retirement plan and were unable to sell the rapidly declining stock. However, Ken Harrison and Joseph Hirko, PGE's CEO and CFO respectively at the time of the Enron merger were charged on several felony level counts primarily related to financial misrepresentation regarding Enron Broadband Services which had its headquarters within the World Trade Center complex that comprises PGE's corporate offices. In addition Tim Belden, head of the West Coast Trading Desk and John Forney, an energy trader who invented various electricity trading strategies such as the Death Star, operated from the trading floor in the PGE corporate offices and were also convicted of financial crimes related to the California Electricity Crisis.
Attempted acquisition by Texas Pacific Group
Concerned by uncertainty that the Enron bankruptcy would bring, several local governments began investigation of acquiring PGE by condemnation. These studies were ended after the announcement on November 17, 2003 that a group called Oregon Electric Utility, led by former governor Neil Goldschmidt and backed by Texas Pacific Group, offered to buy PGE for $2.35 billion. This was the sole bid received by the bankruptcy judge, who approved the bid. When details that Goldschmidt had been sexually involved with a minor in the 1970s emerged, he withdrew from the negotiations, and was replaced by Peter O. Kohler, president of the Oregon Health and Science University.
Many local groups voiced their suspicion that Oregon Electric Utility would be run to maximize short-term profits, rather than to the customers' benefits. These groups included Industrial Customers of Northwest Utilities, Associated Oregon Industries, the Citizen Utilities Board, as well as the majority of cities and local governments in PGE's service area. This purchase offer was denied by the Oregon Public Utility Commission, a three-member regulatory board, on March 10, 2005.
Discomfort over the Texas Pacific purchase led to a number of voter initiatives to convert parts of PGE into PUDs. PGE defeated measures in Multnomah County (November 14, 2003), Yamhill County (March, 2004), and Clackamas County (May 18, 2004).
PGE received notice of a strike by 900 union workers, effective March 8, 2004, represented by the International Brotherhood of Electrical Workers. Points over which the negotiations broke down include retiree medical benefits as well as losses in the members 401(k) plan. This labor dispute was resolved shortly afterward, and the union agreed to a new contract.
With the rejection of the Texas Pacific Group's offer, the City of Portland announced it contacted Enron to resume negotiating an offer to purchase PGE. On April 19, 2005, Portland city officials announced that they were willing to spend 7.5 million in attorneys' fees to buy the utility. On July 6, the City Council unanimously adopted a measure to finance the acquisition of PGE by the sale of $3 billion in bonds.
However, Enron interim CEO Stephen Cooper called off negotiations on July 20, 2005. He explained that he 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". Cooper addressed several causes for the termination, including the refusal of the city to pay a $50 million deposit on the sale. The same day, Governor Ted Kulongoski vetoed a bill that would create a public corporation to purchase PGE.
Independence from Enron
In April, 2006, shares in a newly independent PGE were issued as part of an Enron distribution to its creditors.
Thermal power plants
- Beaver Generating Plant - 500 MWe - located on the northern border of Oregon. The facility consists of 6 turbine generators that exhaust to heat recovery steam generators.
- Boardman generating plant (coal) - 601 MWe - located in Boardman, Oregon.
- Coyote Springs Generating Plant - 348.2 MWe - located in Boardman, Oregon; began operating in 1995. Coyote Springs is a combined cycle cogeneration plant
- Colstrip Coal - 296 MWe - located in Colstrip, Montana.
- Port Westward High Efficiency Gas Power Plant located next to the Beaver plant with 400 MWe capacity (commercial operations started in 2007). Has since won awards for innovation.
- Total: 1,785.20 MWe
- Bull Run (Sandy and Little Sandy rivers) - 22 MWe (decommissioned, 2007)
- Faraday (Clackamas River) - 44 MWe
- North Fork (Clackamas River) - 54 MWe
- Oak Grove (Clackamas River) - 44 MWe
- Pelton Dam (Deschutes River) - 108 MWe
- River Mill Hydroelectric Project (Clackamas River) - 25 MWe
- Round Butte Dam (Deschutes River) - 300 MWe
- Sullivan (Willamette River) - 16 MWe
- Total: 613.00 MWe
Grand Total: 2398.2 MWe
- Biglow Canyon Wind Farm - generating capacity of 450 MW
- Marion County Waste-to-Energy Facility - 13MW from municipal garbage incineration
Renewable energy sales
Vehicle charging stations
The utility is installing 12 electric vehicle charging stations in Portland and Salem as part of a demonstration project to develop the transportation infrastructure needed to support electric vehicles, and specially anticipate the demand plug-in cars.
- MacColl, E. Kimbark (November 1976). The Shaping of a City: Business and politics in Portland, Oregon 1885 to 1915. Portland, Oregon: The Georgian Press Company. OCLC 2645815.
- Home Willamette Falls Heritage Foundation. "A New River of Current:The Story of Station A and the dawn of Electric Power Transmission". Home Willamette Falls Heritage Foundation. Retrieved 3 June 2011.
- Madrigal, Alexis (June 3, 2010). "June 3, 1889: Power Flows Long-Distance". Condé Nast Digital. Retrieved 3 June 2011.
- Hill, Gail Kinsey. NW Natural, PGE deal called off. The Oregonian, May 17, 2002.
- "Sign in to OregonLive.com". The Oregonian.
- Enron says no to PGE deal
- "Enron Sets Portland General Free". 4/3/2006. Retrieved 2012-05-15.
- National Renewable Energy Laboratory (2009-04-13). "NREL Highlights Utility Green Power Leaders". United States Department of Energy. Retrieved 2010-03-25.
- National Renewable Energy Laboratory (2010-05-03). "NREL Highlights Utility Green Power Leaders". United States Department of Energy. Retrieved 2010-05-03.
- National Renewable Energy Laboratory (2011-05-09). "NREL Highlights 2010 Utility Green Power Leaders". United States Department of Energy. Retrieved 2011-05-10.
- "Oregon Utility, Readying for Waves of EVs, Installs Charging Stations in Two Cities" Green Car Advisor
- PGE official website
- Covanta Energy's Marion County Energy-from-Waste Facility
- OregonLive Coverage of Enron and PGE
- "Public bid for PGE falls apart," The Oregonian
- PGE-Enron timeline, OregonLive.com