Nevada regulators won’t intervene in Oregon merger

Thursday, Feb. 24, 2000 | 10:43 a.m.

The Public Utilities Commission of Nevada declared Wednesday it doesn't have jurisdiction in Sierra Pacific Resources' bid to buy an Oregon utility.

Commissioners voted 2-1 to issue a declaratory order stating they don't have authority to approve Sierra Pacific's $3 billion bid to acquire Portland General Electric Co. The deal was announced Nov. 8.

Portland General Electric currently is owned by Enron Corp., Houston, and serves more than 700,000 customers in northwest Oregon. Sierra Pacific filed with the Oregon Public Utilities Commission Jan. 18 to buy the utility and sought Securities and Exchange Commission approval Feb. 3.

Sierra Pacific is the parent company of Nevada Power Co., Las Vegas' electricity provider. The company requested the order as part of its process of winning regulatory approval to complete the merger.

Commissioner Judy Sheldrew voted against the declaration, stating she felt the PUC had jurisdiction in the matter because of the commission's responsibility to company shareholders.

She said she was concerned about whether the company had the financial resources to pull off a cash deal as envisioned by company executives at the time the deal was announced.

Sheldrew said the PUC had a responsibility to analyze the impact the acquisition would have on the investment value of Sierra Pacific stock. She noted the company's stock value has slumped recently.

Commission Chairman Don Soderberg said the issue was not whether the commission should intervene, but whether it had any jurisdiction in a utility transaction that is occurring in Oregon. He added that the PUC could direct its staff to comment to the Federal Energy Regulatory Commission or the SEC if commissioners believed the deal wasn't in the best interests of Nevada citizens.

In another matter, commissioners voted to open an investigation into how to fund the proposed Mountain West Independent Scheduling Administrator.

The Mountain West ISA would function as a traffic cop assuring the fair transmission of electricity over Nevada power lines when the industry is deregulated and several companies use existing lines. Competition is due to begin next week, but experts say that is unlikely.

The organization would operate for three years until a regional administrator is selected to take over. Although the PUC and utility companies like the ISA concept, they haven't determined how it should be funded.