Sierra Pacific-Enron deal off

Thursday, April 26, 2001 | 3:20 a.m.

It's official: Sierra Pacific Resources Inc.'s $3.1 billion acquisition of Portland General Electric is off.

In brief statements issued by the utility companies Thursday afternoon, Sierra Pacific confirmed what had been speculated for weeks -- that its deal with Houston-based Enron Corp. to acquire the Oregon utility with 700,000 customers would not be consummated.

"While this acquisition would have offered many efficiencies in utility distribution for customers in both Nevada and Oregon, completing it was becoming increasingly difficult in the current market and political environment in the West," said Walt Higgins, chairman and chief executive officer of Reno-based Sierra Pacific, parent company of Nevada Power Co. "Terminating this agreement now minimizes further costs to our shareholders as we continue to focus our attention on customers in Nevada and the Lake Tahoe region of California."

Jeffrey Skilling, president and chief executive officer of Enron, also cited the regulatory environment for the deal's failure.

"As we have discussed in the past few weeks, the energy markets in California and Nevada have led to a regulatory and legislative environment that has made this transaction increasingly difficult to complete," Skilling said. "Portland General's sound financial condition will continue to benefit Enron's strong credit position."

Sierra Pacific officials have said their company's weakened financial situation would have made completion of the Portland deal difficult. Nevada legislators and regulators have moved to block deregulation in Nevada, including plans by Sierra to sell its power plants. Those sales could have raised funds for the Portland General deal.