SENATE COMMITTEE ON BUSINESS AND ECONOMIC DEVELOPMENT

 

 

March 3, 2005                                                                                                         Hearing Room B

1:00 P.M.                                                                                                                     Tapes  33 - 34

 

MEMBERS PRESENT:         Sen. Rick Metsger, Chair

Sen. Bruce Starr, Vice-Chair

Sen. Jason Atkinson

Sen. Ryan Deckert

Sen. Laurie Monnes Anderson

 

GUEST MEMBER:               Sen. Vicki Walker

 

STAFF PRESENT:                 Theresa Van Winkle, Committee Administrator

James Goulding, Committee Assistant

 

MEASURES/ISSUES HEARD:

                                                SB 413 – Public Hearing

                                                SB 600 – Public Hearing

                                                SB 671 – Public Hearing

 

These minutes are in compliance with Senate and House Rules.  Only text enclosed in quotation marks reports a speaker’s exact words.  For complete contents, please refer to the tapes.

 

TAPE/#

Speaker

Comments

TAPE 33, A

003

Chair Metsger

Calls the committee to order at 1:02 p.m. and opens a public hearing on SB 413.

SB 413 – PUBLIC HEARING

010

Theresa Van Winkle

Committee Administrator.  Explains provisions of SB 413.

020

Rep. Gene Whisnant

Represents House District 53.  Testifies in opposition to SB 413.

045

Roger Martin

Central Electric Cooperative.  Testifies in favor of SB 413. 

090

Al Gonzalez

President & CEO, Central Electric Cooperative.  Presents written testimony in favor of SB 413 (EXHIBIT A).  Testifies in favor of SB 413.

130

Gonzalez

Continues presenting testimony. Remarks on current transmission lines.

150

Martin Hansen

Legal Counsel, Central Electric Cooperative.  Testifies in favor of SB 413.  Discusses directives and local need to upgrade power infrastructure to keep the area running. 

190

Hansen

Talks about the difficulties of trying to get the transmission lines improved.  Relates the frustrations with the grandfather clauses allowing huge growth.  Outlines fears that electrical needs will exceed supply without an exemption to improve the lines.

230

Hansen

Asserts that the improvement is needed to keep up with power needs.

270

Hansen

Notes that the Oregon Public Utilities Commission (PUC) has directed that they provide a certain level of power.  Talks about the risk of brown outs if they are not allowed to improve the power transmission capability.

290

Chair Metsger

Discusses easement and property rights.  Asks if Hansen observes the prospect of a building moratorium without electrical upgrade.

300

Hansen

Explains that they have exhausted every other avenue to get this accomplished.  Feels this is the only way they can expand.

307

Chair Metsger

Asks if he has considered a Measure 37 claim.

310

Hansen

Says it is a last resort.  Feels that Measure 37 claims may not be able to help them with this problem in the future.  Says they need this to address future issues.

330

Sen. Monnes Anderson

Wonders why LUBA refused to grant their request.

337

Hansen

Explains that they were refused under the current lawful requirements established in 1962.  Notes that the ruling was very narrow and cautious in his opinion.

363

Sen. Monnes Anderson

Asks if the PUC has given them any advice.

365

Hansen

Informs that the PUC does not advise others.

370

Martin

Notes that the proposed -1 amendments to SB 413 (EXHIBIT B) are available to the committee and public.

373

Sen. B. Starr

Asks if they were appealed to LUBA and if it exhausted their legal opportunities.

375

Hansen

Replies yes and explains.

400

Sen. B. Starr

Asks if other utilities have encountered the same problems.

405

Hansen

Does not know of a similar situation where utility has been turned down.  Replies that most utilities upgrade their power lines without any official approval.

TAPE 34, A

005

Hansen

Concludes testimony in favor of SB 413.

020

Matt Cyrus

Citizen of Sisters, Oregon.  Presents a photograph of a power line (EXHIBIT C).  Submits a packet of testimony in opposition to SB 413 (EXHIBIT D).  Notes that the power infrastructure is already in place but not yet in use.  Testifies that SB 413 is too strong of a response to such a small issue.

110

Keith Cyrus

Citizen of Sisters, Oregon.  Presents photographs of Sisters, Oregon (EXHIBIT E).  Testifies in opposition to SB 413.  Discusses building of the substations in the area and community involvement.  Talks about a switch-tower that isn’t being used. Agrees that more power and additional line upgrades may be needed, but doesn’t feel it is necessary at this time. 

150

Keith Cyrus

Continues discussion regarding the frustration of trying to solve this problem. Talks about perception of poor treatment by Central Electric Cooperative.

190

J.R. Gonzales

Program Manager, Oregon Public Utility Commission. Testifies in support of SB 413.

197

Chair Metsger

Asks Gonzales question regarding the legal responsibility of the cooperative under the PUC.

210

Gonzales

Explains.

220

Chair Metsger

Explains scenario and asks Gonzales to discuss what the PUC’s role would be.

225

Gonzales

Explains role of the PUC.

240

Sen. Monnes Anderson

Asks if the power lines are used for anything other than  power transmission.

245

J.R. Gonzales

Replies that they are power only.

250

Sen. Monnes Anderson

Says it could be a concern. Comments that broadband is very important.

253

Chair Metsger

Wonders about the scenarios proposed by Central Electric Cooperative and how the PUC would respond.

 

268

Chair Metsger

Close public hearing on SB 413 and opens public hearing on SB 600.

SB 600 – PUBLIC HEARING

270

Van Winkle

Committee Administrator. Gives overview of SB 600.  Notes the -1 amendments before the committee (EXHIBIT F).

285

Schelly Jensen

Verizon.  Testifies in favor of SB 600.

315

Chair Metsger

Closes public hearing on SB 600.  Opens public hearing on SB 671.

SB 671 – PUBLIC HEARING

318

Chair Metsger

Discusses reasons for SB 671 in relation to the proposed purchase of Portland General Electric (PGE) by Texas Pacific Group (TPG).

345

Ron Eachus

Former PUC Chair. Testifies on SB 671.

395

Eachus

Discusses PGE’s tax liability and rate structure.

TAPE 33, B

005

Eachus

Continues to discuss the payment of taxes and liabilities of parent company of PGE.

030

Eachus

Notes the scenarios of disconnecting from a parent company or altering the tax structure. 

070

Eachus

Attempts to clear up some of the confusion over comments made by Dr. Peter Kohler at an earlier committee meeting.   Talks about payment of debt equity and rate setting by PGE.  Remarks that PGE would look pretty good if not owned by Enron.  Discusses Oregon Electric’s higher debt percentage. 

100

Eachus

Concurs with Dr. Kohler’s assessment that PGE will be paying Oregon taxes.  Talks about unconsolidated filing options.

140

Eachus

Discusses the PUC’s options and potential consequences regardless of the resolution. 

180

Eachus

Offers that PUC needs to make their decision as soon as possible and let the legislature know its options.  Feels a lot of critical information is missing on what the impact would be of disconnecting from a parent company. 

210

Eachus

Suggests that they need more information to get a better understanding of the issue.  Offers some questions to be asked of the Department of Revenue.

250

Eachus

Reiterates the need for additional information from the Department of Revenue. 

255

Chair Metsger

Thanks Eachus for his testimony.  Notes the lack of time and asks for a summary of remaining points.

270

Eachus

Summarizes the need to define “net benefit” in statute.  Discusses merger cases in which a company takes on some risk to make sure the company acts towards the benefit of the customer.

310

Eachus

Details the difficulty in defining net benefit.  Offers some standards to examine in the definition.  Questions the capabilities of PUC and making sure they have the authority they need.  Notes the implications of a repeal of PUHCA.

350

Eachus

Concludes testimony by describing the situation with US West.  Describes the Enron scenario.

390

Kevin Lynch

Vice President of Public Affairs, PacificCorp.  Submits written testimony on SB 671 (EXHIBIT G). Testifies on SB 671.

TAPE 34, B

005

Lynch

Continues testimony.

095

Gary Bauer

Northwest Natural Gas.  Notes that his testimony is included with Mr. Lynch’s testimony (EXHIBIT G).  Discusses merger and acquisition activity.

115

Katherine McDowell

Stoel Rives Law Firm.  Notes that she is representing PacificCorp and Northwest Natural.  Offers to answers questions of the committee.

120

Sen. Walker

Asks Mr. Lynch if the PUC has oversight of the decisions made regarding the type of equipment purchased and the expense of the equipment.

125

Lynch

Explains.

130

Sen. Walker

Wonders if Lynch would agree that it is a better opportunity for him to get the equipment into his regulated rates.

140

Lynch

Disagrees and notes that the commission has the power to disallow those costs.

150

Jason Eisdorfer

Citizens Utility Board.  Presents written testimony in favor of SB 671 (EXHIBIT H).   Voices his support for the definition of public interest.  Approves of provision to allow the PUC some regulatory power after a merger is approved. 

190

Eisdorfer

Suggests the PUC also be granted the ability to supervise the performance of a utility. 

240

Eisdorfer

Observes the inability to quantify risks until it is too late to do anything about it.  

265

Chair Metsger

Asks if the language in SB 671 has addressed that issue.

270

Eisdorfer

Responds.

287

Bill Linden

Industrial Customers of NW Utilities. Testifies in support of SB 671.  Concurs that putting “net benefit” in statute is important.  Discusses important elements of SB 671. 

300

Linden

Suggests possible amendments to delete the 19 business day investigation period.  Asks for requirements of “net benefit” be clarified in regards to ownership changes.

330

Chair Metsger

Reiterates information gleaned from testimony.

The following prepared testimony is submitted for the record without public testimony:

 

Ann Fisher

Citizen. Submits written testimony for the record without public testimony (EXHIBIT I).

340

Chair Metsger

Suggests interested parties contact committee staff with recommended changes.  Closes public hearing and adjourns the committee at 2:52 p.m.

 

 

EXHIBIT SUMMARY

 

  1. SB 413, written testimony, Al Gonzalez, 2 pp
  2. SB 413, -1 amendments, staff, 2 pp
  3. SB 413,photographs, Matt Cyrus, 2 pp
  4. SB 413, informational packet, Matt Cyrus, 47 pp
  5. SB 413, photographs, Keith Cyrus, 2 pp
  6. SB 600, -1 amendments, staff, 5 pp
  7. SB 671, written testimony, Kevin Lynch, 3 pp
  8. SB 671, written testimony, Jason Eisdorfer, 2 pp
  9. SB 671, written testimony, Ann Fisher, 2 pp