http://www.heraldandnews.com/articles/2005/10/11/news/community_news/cit2.txt

PacifiCorp says sale won't affect issues

October 11, 2005 By DYLAN DARLING

PacifiCorp officials say the utility's pending sale to a Warren Buffet company won't affect the relicensing of power dams on the Klamath River or the potential increase of power rates for Klamath Basin irrigators.

”Until we actually close on the transition, it's up to PacifiCorp to handle,“ said Mark Moench, senior vice president for MidAmerican Energy Holdings Company.

Buffett's company could close on the $9.4 million to buy PacifiCorp in March. MidAmerican is waiting to get approval from six states, including Oregon, before finishing the purchase.

Oregon's permission would be given by the Public Utility Commission. The PUC held an open house in Klamath Falls Monday to answer questions from the public about PacifiCorp's sale.

About a dozen people trickled through the informational booths set up in the Ponderosa Junior High School library. PacifiCorp, MidAmerican and the PUC all had booths, as did the statewide non-profit Citizens Utility Board of Oregon.

For the PUC to approve PacifiCorp's sale it can't just keep the status quo for the Portland-based company's 1.6 million customers.

”It has to be an improvement of what is provided today,“ said Bob Valdez, PUC spokesman.

He said the PUC is in the process of evaluating whether that is the case.

MidAmerican officials contend the company will improve PacifiCorp because it can borrow money at a lower rate and keep overhead costs lower than Scottish Power, the Scotland company that has owned PacifiCorp since 1999. Officials have also said they will honor any promises made by PacifiCorp before the purchase, such as those regarding the Klamath River dams and Basin irrigator rate.

”It seems to us to be a good match,“ said Kevin Lynch, regional vice president for PacifiCorp.

He said he doesn't expect the sale to affect either the relicensing of PacifiCorp's 151-megawatt hydroelectric project on the Klamath River or the possible increase of the irrigators' rate, which have been held to about half a cent for 100 years because of contracts.

PacifiCorp's license for the dams ends on March 1 and the company has been involved with a relicensing process for years. If the expiration date passes without a settlement among the parties, then the federal government issues annual licenses based on the old license until a settlement is reached.

The irrigators' contracts are set to expire in April. The PUC will determine if there should be an increase, and if so, how much. Valdez said the decisions should come in March. In July, the Oregon legislature passed a bill brought by Sen. Doug Whitsett, a Klamath Falls Republican, that would make any increase to Basin irrigators gradual, spreading it over seven years. Gov. Ted Kulongoski then signed it into law.

If approved, MidAmerican will buy PacifiCorp for $5.1 million and its debt for $4.3 million.

Before the deal is completely done, MidAmerican needs to also get the approval of the Securities and Exchange Commission and the Federal Energy Regulatory Commission.

All the review could possibly become moot if Scottish Power itself is bought by German power company E.ON and the new ownership decides not to sell PacifiCorp.

Lynch, who is a stockholder in Scottish Power, said he got a shareholders letter saying E.ON might buy Scottish Power. Even if that deal happens, the PacifiCorp deal could still go through if E.ON decides to stay focused on Europe.

The PUC is taking public comment about the PacifiCorp sale throughout its decision process. Comments may be mailed to Box 2148, Salem, OR 97308, e-mailed to puc.consumer@state.or.us or phoned to (800) 522-2404.

On the Net: www.puc.state.or.us www.pacificorp.com www.midamerican.com