In an attempt to salvage its troubled takeover of US electricity company Pacificorp, Scottish Power on Friday presented a detailed list of the benefits to customers.
But the move served only to stiffen opposition to its 4.7 billion bid to become the first foreign owner of a US electric company. Nancy Newell, of the Northeast Ratepayers Group of Portland, attacked the document for leaving out a key condition: reduced electricity prices.
Governor Michael Leavitt of Utah, whose agencies must approve the purchase, had called on Scottish Power to cut charges by 5 per cent. But at a private meeting in Portland on Wednesday, executives signaled that no price reductions were in the offing.
Scottish Power’s managing director for US operations, Alan Richardson, did not help the company’s chances when he reportedly told the Utah Governor two weeks ago that failure to approve the takeover would result in an investment boycott of the state by foreign corporations.
Richardson did win some hearts and minds in Utah: he persuaded the state’s League of Cities to delay a move by the state legislature to demand their own vote on the merger. This would have effectively killed the takeover. The list of powerful constituent groups challenging the merger lengthened this week. The city of Portland and giant multi-utility Southern California Edison, a potential competitor, announced that they would join organizations intervening formally.
On 5 March, Scottish Power and Pacificorp executives must submit to cross-examination of their plans by state regulators and consumer groups in five states, a process that may last until July. State utility panels will then vote to accept, reject or, more likely, modify the terms of the merger, which still faces a challenge by consumer campaigner Ralph Nader.
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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).