Critics and boosters of Utah Power & Light Co.'s proposed merger with PacifiCorp squared off Monday before the Utah Public Service Commission, beginning three weeks of hearings on the merger.
In brief opening statements, the utilities claimed their marriage is in the public's interest, while critics warned against the unknown long-term impacts of UP&L becoming part of an out-of-state corporation.The three-member commission issued its own warning by directing the numerous attorneys participating in the hearings not to spend time on philosophical differences but to stick to the question of whether the merger is in Utah's interest.
The Utah commission is the last out of eight regulatory bodies to hold hearings on the merger. Regulators in California, Wyoming and Idaho have approved the merger, and decisions from Oregon, Washington, Montana, Utah and the Federal Energy Regulatory Commission are expected before the end of June.
UP&L and PacifiCorp announced their plans to merge last August. Under the stock swap agreement, valued between $1.8 billion and $2.2 billion, UP&L would become a division of Portland, Ore.-based PacifiCorp, creating one of the largest utilities in the West, serving more than 1 million customers in seven states. PacifiCorp is the parent company of Pacific Power & Light with operations in Oregon, Washington, California, Idaho, Montana and Wyoming.
Both utilities claim that combining their operations will result in savings of more than $150 million, which will be passed on in the form of 5-10 percent rate reductions in the next five years and stable rates thereafter.
The state's Division of Public Utilities also recommended approval of the merger. In his opening statement, Assistant Attorney General Michael Ginsberg said the merger's benefits will increase after the first five years.
But the state's Committee of Consumer Services and UP&L's industrial customers voiced skepticism of the claimed benefits and concern over regulatory control of the $8.7 billion utility the merger would create.
The benefits proposed are short-term and temporary, and the PSC must consider the long-term impact of the merger, said Gary Dodge, attorney for Basic Manufacturing and Technologies of Utah Inc.
Andrew W. Buffmire, attorney for Nucor Steel, recommended the merger's benefits be declared temporary until the commission approves a plan of cost allocation among Utah and the other states served by the merged utility.