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Regulated customers of Portland General Electric Co. will receive compensation both for lost profits and for future, anticipated efficiencies under the final decision issued by the Oregon Public Utility Commission that approved the merger between PGE and Enron Corp.

Under the approved merger plan, Enron will absorb the utility's corporate parent, Portland General Corp.

As a result of negotiations between the merging companies and the commission's staff, Enron has agreed to guarantee "monetary compensation and benefits" to Oregon ratepayers in the amount of $141 million. The figure includes $36 million in cost savings associated with anticipated reduction in Portland's costs as a result of Enron's "oversight and efficiencies."

Ratepayers also will receive a share of future profits on nonfranchise sales and compensation for lost margins from utility activities that no longer will occur, such as Portland's trading in the wholesale power market. The settlement also includes a number of conditions to provide protections for consumers and commitments to various public purposes, including development of renewable resources, continued mitigation of the fish and wildlife impact of Portland's hydroelectric facilities, the development of a "systems benefit charge" and charitable donations for low-income bill assistance.

The PUC said the settlement plan will save captive customers from paying subsidies for other services. It rejected concerns that Enron now will be able to divert revenues from the sale of low-cost Northwest power across Portland's transmission facilities to other regions. The commission said that under federal "open access" requirements, PGE and other transmitting utilities are required to pay the same rates to use their transmission facilities as they charge to other users. As a result, Enron is able, with or without the merger, to buy the low-cost power for transmission over the Pacific Intertie for resale outside the region. Re Enron Corp., UM841, Order No. 97-196, June 4, 1997 (Ore.P.U.C.).

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