From Deseret News archives:

Utility officials praise takeover of PacifiCorp

Delay in rate hikes, clean-coal power-plant possibilities appeal

Published: Monday, Dec. 12, 2005 7:50 p.m. MST
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Utah utility officials on Monday were nearly gushing over the apparent benefits they see in billionaire Warren Buffett's takeover of PacifiCorp, Utah's largest electric utility.

Those benefits include promises to increase PacifiCorp's corporate presence from Portland to Salt Lake City, a delay in a 2006 scheduled electricity rate hike, and a working group to study the economics of building a clean-coal power plant in Utah, according to officials with the state Division of Public Utilities and the state Committee of Consumer Services.

No electricity rate reductions or credits on customers' bills are part of the concessions, something that past utility mergers included.

MidAmerican is 83 percent owned by billionaire Warren Buffett through his company, Berkshire Hathaway. PacifiCorp operates as Utah Power in Utah.

The Utah Public Service Commission must still approve MidAmerican Energy Holdings Co.'s $9.4 billion acquisition of PacifiCorp, which is currently owned by ScottishPower. All that remains is a public-comment hearing scheduled for today at 4:30 p.m. at the Heber Wells Building, 160 E. 300 South.

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At a hearing Monday, the division and committee did not offer a single reason why the deal should not happen. But perhaps the most direct challenge to the proposed sale came from the chairman of the PSC, Ric Campbell.

Campbell pointed to MidAmerican's commitment to maintain in Utah adequate "front-line" staffing and employment levels — similar promises that were made by PacifiCorp in 1989 when it acquired Utah Power and again by ScottishPower in 1999 when it purchased PacifiCorp.

"Why do you have confidence in the current employment commitments when in the prior two mergers, those commitments, some might argue, were not lived up to?" Campbell said. "Those commitments were never used as leverage. I don't recall that the company was ever challenged on those commitments."

Dan Gimble, chief of technical staff for the consumer committee, agreed with Campbell, saying there had been a loss of journeyman experience over the years and that state regulators would need to closely track MidAmerican to ensure adequate levels of staffing were maintained.

Gimble added that the proposed settlement agreement allows MidAmerican a 15- to-16-month window to get the company's utility personnel to adequate levels to ensure high-quality service.

Robert Reeder, an attorney representing the Utah Industrial Energy Consumers, said he supported a provision that would penalize the utility from recouping administrative expenses if MidAmerican does not honor its staffing commitments.

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