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Oregon struggles with deregulation

A recent recommendation in Oregon indicates just how much regulators are struggling with the changing face of the electricity market. Staff of the Oregon Public Utilities Commission (PUC) recommended on January 16 that the proposed mega-merger between Portland General Electric (PGE) and Enron should proceed, but they also attached 23 conditions -- and PGE says some of the conditions are of major concern. The regulatory staff suggested that PGE rates should be reduced $47.4 million yearly for four years. The staff also said the PUC should be able to take account of the profits of unregulated portions of Enron, based in Texas, in setting rates for PGE, based in Oregon and regulated as a traditional utility. The latter condition raises major national policy questions, says PGE's Rochelle Lessner. The PUC is to make a final decision on the proposed $3.2 billion merger by March 17. In the meantime, officials from PGE and Enron will meet with the PUC staff to discuss the recommendation. Development of the Vansycle wind farm has been made a condition of support for the merger by various renewables, consumer and environmental groups (see story page 18).

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