PacifiCorp has received final state approval from Oregon and Washington to merge with Utah Power & Light Co., officials announced on Friday.
The decisions by the Oregon Public Utility Commission and the Washington Utilities and Transportation Commission complete the approval process in the seven states affected by the proposed merger, according to officials at Portland-based Pacifi-Corp and UP&L."This makes three approvals in one week, including Utah, and we hope this sends a strong signal to regulators in Washington, D.C., who will be the last ones to render a decision," UP&L spokesman John Ward said in Salt Lake City Friday.
Ward said the fact that seven states concluded there were "substantial benefits to the merger should raise the strong probability that the administrative judge who recommended against the merger is way off base."
PacifiCorp and UP&L have asked for regulatory approval of a merger to create a utility serving 1.2 million customers in seven Western states.
Final approval must come from the Federal Energy Regulatory Commission, but an administrative law judge recommended June 13 that FERC deny the proposed merger.
Judge George P. Lewnes said the merger would be anti-competitive and that the two utilities had failed to show it was in the best interest of the public.
But the Oregon PUC said the "proposed merger and related transactions are consistent with the public interest.
"We were convinced that Oregon PP&L customers will benefit from the merger," said Ron Eachus, chairman of the Oregon PUC, "and our approval specifies commitments from PacificCorp to assure that these benefits take place."
An agreement between PacificCorp and the PUC requires the utility to file new rates in 1989 "that include a guaranteed level of the expected immediate financial benefits from the merger," the PUC said.
The agency said the immediate benefits are estimated to be $17 million. The PUC said that would mean a potential rate decrease of almost 2.8 percent for Oregon customers.
The PUC said it believes more benefits will accrue from the merger, but even if they don't, "Pacific's customers are protected from any harm by the stipulation (agreement) and various commitments made by the applicants." PP&L serves 396,000 electricity customers in Oregon.
The Washington commissioners also concluded the merger is in the public interest. They will require the companies to issue a rate filing to allocate Washington's share of merger benefits during the first year of combined operations.
The first-year benefits, estimated at about $5 million, are to be reflected in a rate filing next April.
The merging companies eased a state concern by accepting a number of policy changes sought by the staff of the Federal Energy Regulatory Commission, said WUTC spokesman Raymond Day Jr.
PP&L serves 111,000 customers in central and southern Washington.
The decisions by regulators in Oregon and Washington also drew praise from David F. Bolender, president of Pacific Power & Light Co., the utility subsidiary of PacifiCorp."We're extremely pleased with Friday's doubleheader and with the overall progress of the merger."