PacifiCorp proposes legal/regulatory realignment

Dec. 4, 2000 (BUSINESS WIRE)à‚–PacifiCorp, has asked state regulators to approve a legal and regulatory realignment of the company, according to its parent company Scottish Power.

In filings made December 1, 2000 in five of the six western states that form PacifiCorp’s service territory, PacifiCorp proposed the creation of individual state electric companies, a generation company and a service company. They would be owned by a non-operating US holding company and remain part of the ScottishPower group.

Under a separate filing recently submitted to the Federal Energy Regulatory Commission, PacifiCorp’s transmission will be controlled by a regional transmission organization, RTO West, although PacifiCorp will retain ownership of its existing transmission assets.

The proposal is designed to provide a permanent allocation of generation benefits and costs among the states served by PacifiCorp. This will allow each state to pursue regulatory policies deemed appropriate without affecting customers in other states or treating shareholders unfairly.

“This proposal anticipates the ongoing significant changes in the electric utility business in the US,” said Alan Richardson, president and chief executive officer of PacifiCorp. “This is an innovative approach aimed at moving both the company and the region forward to meet these challenges so they can be dealt with positively and in the best interest of customers.”

A key element of the proposal is that five of the state electric companies will have long-term contracts for power with the generation company. “These supply contracts are intended to provide our customers the continued benefits of our low-cost generation resources,” Richardson said.

In Oregon, PacifiCorp is currently working to implement Senate Bill 1149, which provides expanded electricity choices to certain customers beginning October 1, 2001. On December 1, 2000, PacifiCorp filed its resource plan as required under the Oregon Public Utility Commission rules for implementing SB 1149. The resource plan outlines how the company plans to allocate its generating resources between Oregon customers who will remain on cost-based rates and those who will be going to the market for their electricity.

“Because we are a multi-state utility, we obviously cannot set aside a certain amount of generation for Oregon consumers without considering how our overall resources and costs are affected in the other states we serve,” Richardson said. “The proposal we have filed today is an innovative approach to resolving this issue in a manner that permits each state to decide its own future.

“As we move through the regulatory process with this proposal, one of the benefits to the region will be clarification of the rules so that utilities and independent power producers will be able to invest in new generation without the existing legislative and regulatory uncertainties,” Richardson said.

Construction of new generation by utilities and others will address the growing supply shortages in the West and, ultimately, lead to greater price stability.

Under the proposal, PacifiCorp’s state electric companies would be subject to the jurisdiction of the states in which they are located. The generation company would be regulated by the Federal Energy Regulatory Commission, which also regulates transmission. The Securities and Exchange Commission would regulate the service company.

The proposal is not expected to have a significant impact on employees, or lead to downsizing beyond the company’s previously announced transition plan.

PacifiCorp has 1.5 million customers in Utah, Oregon, Wyoming, Idaho, Washington and California.

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