ScottishPower looks to add to US business

ScottishPower, the electricity and water utility, may be interested in bidding for the US west coast power provider Portland General Electric (PGE), according to recent reports.

ScottishPower is already among the world’s top dozen investor-owned electric utilities and has made no secret of its ambitious plans to grow further, with the US being a strategically important market. ScottishPower already owns PacifiCorp, one of the biggest utilities in the US. The addition of PGE would increase its US customer base to around 2.25 million.

Since July 1997, PGE has been owned by Enron, the giant Houston-based electricity and trading group. PGE is the electric utility for Portland metropolitan area, home to a rapidly expanding high-tech industry and one of the fastest growing economies in the US.

Speculation linking ScottishPower to PGE has arisen since the termination last week of discussions between Enron and another US utility, Sierra Pacific Resources over the sale of PGE. Regulatory worries arising from the Californian electricity supply crisis were blamed for the collapse of the deal.

Since ScottishPower moved into the US market, a number of other UK utilities have followed suit, most notably Powergen plc. Powergen acquired LG & E Energy, a vertically integrated power group based in Louisville, Kentucky, but has struggled with the burden of debt arising from the transaction. Its ownership of a sizeable US business has made it attractive to a take-over and German electricity group E.ON announced earlier this month that it will acquire Powergen, subject to regulatory approval.

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