ORDER NO. 98-534

ENTERED DEC 17 1998

This is an electronic copy. Appendices and footnotes may not appear.

OF OREGON

UE 102

DISPOSITION: MOTION FOR GENERIC CONSIDERATION OF AUCTION PROCESS DENIED

On November 24, 1998, PGE filed a motion for an order creating a generic proceeding to determine the auction processes and the procedures that utilities may use to sell all or a substantial part of their generating assets and energy supply, sale and exchange contracts. If the motion were granted, generic issues relating to auction processes would be removed from UE 102 and considered in the generic proceeding. PGE cites no specific statutory provision in support of its motion. The Commission assumes PGE is relying on ORS 756.515, which gives the Commission authority to investigate "any matter relating to any public utility or telecommunications utility or other person" on its own motion.

PGE claims that a generic proceeding would be a more efficient and quicker method of dealing with the issues relating to the proposed sale of its assets pursuant to a restructuring plan than would consideration of these issues in UE 102. It argues that a generic decision on asset sales would eliminate the need for specific investigations each time a utility seeks to sell an asset for which transition costs or benefits may be claimed. Thus, it claims, once the Commission issues a generic order on asset sales, PGE would not need a specific Commission order regarding its Auction Protocols and Procedures but could proceed directly with the sale. It notes that when the Commission issues an order on PGE's restructuring plan, legislative review of the order may delay the sale for many months. PGE also claims that the only issues now ripe for decision are generic because the Commission has not determined what assets, if any, PGE may sell.

Parties to UE 102 had an opportunity to respond to PGE's motion. The Industrial Customers of Northwest Utilities (ICNU) supports the motion. For the most part, the other parties either oppose the motion or express some reservations. Staff does not oppose the motion but points out that in order to make it applicable to all three investor-owned electric utilities in Oregon, it may be necessary to conduct discovery relating to the supply assets of each. PacifiCorp supports the motion but would like the generic proceeding to include consideration of the sale of individual or small groups of assets as well as the sale of all or most assets, as PGE desires. This would make it applicable to PacifiCorp’s possible divestiture strategy. Idaho Power opposes the motion, pointing out that problems raised by its multi-state jurisdiction and asset location could make development of generic principles impossible. The Citizens’ Utility Board (CUB) is skeptical of the motion and notes that it is possible that a generic proceeding would adopt broad guidelines that would not be useful in specific cases. PG&E Energy Services opposes the motion because a generic proceeding might become simply a hypothetical exercise that would increase the costs of parties who would have to participate in both the generic proceeding and in a specific PGE proceeding. Other parties seek to make certain that any generic proceeding does not preclude consideration of specific issues pertinent to PGE's auction, such as the impact of the divestiture on existing sales and exchange contracts.

The Commission has considered the arguments made by all parties and concludes that the motion should not be granted.

DISCUSSION

We do not believe that opening a generic proceeding would result in increased efficiency or avoidance of delays. First, a proceeding of that nature would very likely take several months to complete. Many parties that could be affected by asset sales would participate, including not only the utilities who could propose sales but also those who have an interest in the assets or who might purchase assets as well as consumer and public interest groups. It is difficult to see any efficiency for PGE in such a process. Moreover, PGE’s assumption that the adoption of generic guidelines would eliminate the need for any further consideration of PGE’s specific processes is not persuasive. If Staff or other parties questioned whether PGE’s specific auction process meets the broad guidelines set out in a generic proceeding, some further proceeding, and delay, would be necessary to deal with the dispute. Moreover, PGE’s claim that the only issues now ripe for decision are generic is also unconvincing. Although the Commission has not decided what assets, if any, PGE may auction, PGE has before the Commission a very detailed plan for its auction process. The Commission can consider this plan and make a decision on whether the process is appropriate and serves the public interest.

We note that other affected utilities may have different resource mixes and different jurisdictional issues. Development of useful broad guidelines for asset sales may thus be difficult. It may be that a generic proceeding at this point would end up with narrow guidelines that would primarily apply only to PGE. Our consideration of PGE's specific proposal in UE 102 can accomplish as much. It could also give some guidance to other utilities who may make restructuring proposals.

It is our conclusion that opening a generic docket now would not be in the interest of the public or of PGE. We direct the Administrative Law Judge to continue with consideration of the specific auction proposal put forward by PGE.

 ORDER

IT IS ORDERED that the motion by PGE for an Order creating a generic proceeding to determine the auction processes and the procedures that utilities may use to sell all or a substantial part of their generating assets and energy supply, sale and exchange contracts is denied.

Made, entered, and effective ____________________________.

 A party may request rehearing or reconsideration of this order pursuant to ORS 756.561. A request for rehearing or reconsideration must be filed with the Commission within 60 days of the date of service of this order. The request must comply with the requirements of OAR 860-014-0095. A copy of any such request must also be served on each party to the proceeding as provided by OAR 860-013-0070. A party may appeal this order to a court pursuant to ORS 756.580.