Talks on Friday failed to boost Scottish Power’s $4.7 billion bid for the US electricity company PacifiCorp. Earlier in the week it was dealt a possibly fatal blow when analysts at the Oregon state utility commission urged regulators to reject it.
Official participants in the review process, including the state’s Citizens Utility Board and Industrial Customers Council, also concluded that the state should block the deal. Discussions between the state government, consumers and Scottish Power held in Portland on Thursday and Friday brought the parties no closer. ‘It’s dead, dead, dead,’ a participant told The Observer.
The 84-page report by utility commission staff blasted the company for failing to guarantee price reductions to US customers. The experts concluded: ‘Scottish Power’s purported benefits [of the merger] are unquantifiable and unverifiable.’ The UK firm’s designated chief executive for Oregon operations, Alan Richardson, was outraged by demands that his company pay Oregon customers a bonus for the right to buy PacifiCorp.
But Bob Jenks, director of the Citizens Utility Board, warned Scottish Power that unless it made an offer to customers ‘the merger’s not going to happen.’
The Glasgow firm had hoped to avoid price cuts by offering to improve the service. Ken Canon, spokesman for a consortium of industrial customers, said this was ‘providing benefits by spending our own money.’
‘A merger between PacifiCorp and a globally expanding multi-utility such as Scottish Power,’ wrote state economist John S. Thornton, ‘would cause PacifiCorp to lose its focus on core operations.’
Richardson dismissed this as merely ‘the American system of negotiating in public.’
Gregory Palast’s column “Inside Corporate America” appears fortnightly in the Observer’s Business section. Nominated Business Writer of the Year (UK Press Association – 2000), Investigative Story of the Year (Industrial. Society – 1999), Financial Times David Thomas Prize (1998).