ORDER NO. 99-196

ENTERED MAR 05 1999

This is an electronic copy.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UP 155

In the Matter of the Application of Portland General Electric Company for Approval of the Sale of Spare and Component Parts of the Bethel Generating Facility to Energy Services, Inc. )

)ORDER

 DISPOSITION: APPLICATION GRANTED

The Commission received an application from Portland General Electric Company, filed pursuant to ORS 757.480 and OAR 860-027-0025, requesting approval to sell certain of its utility property alleged to be no longer necessary or useful for providing utility services to the public. The property consists of certain spare and component parts of the Bethel generating facility, including two stack gas analyzers, pumps, valves, combustion chamber assemblies, tools, and miscellaneous parts.

Based on a review of the application and the Commission’s records, the Commission finds that the application satisfies applicable statutes and administrative rules. At its public meeting on March 2, 1999, the Commission adopted the Staff’s recommendation to approve the sale as proposed. Staff’s recommendation is attached as Appendix A and is incorporated by reference.

OPINION

Jurisdiction

ORS 757.005 defines a public utility as anyone providing heat, light, water, or power service to the public in Oregon. The Company is a public utility subject to the Commission’s jurisdiction.

Applicable Law

ORS 757.480 provides that a public utility doing business in Oregon shall first obtain Commission approval for any transaction to sell, lease, assign or otherwise dispose of property of such public utility necessary or useful in the performance of its duties to the public or any part thereof of a value in excess of $10,000.

OAR 860-027-0025 specifies the information a public utility must submit when it makes application to sell or lease its property. This application contains the necessary information.

The proposed sale involves property which has a value in excess of $10,000 and is no longer useful for providing utility services to the public. Commission approval of the accounting treatment for this transaction does not constitute approval for ratemaking purposes. There is no indication that the proposed sale will impair the Company’s ability to provide public utility service in Oregon.

CONCLUSIONS

1.  The Company is a public utility subject to the jurisdiction of the Public Utility Commission of Oregon.

2.  The Company’s proposed transaction meets the requirements of ORS 757.480.

3.  The application should be granted.

ORDER

IT IS ORDERED that the application of Portland General Electric Company for authority to sell certain utility property alleged to be no longer necessary or useful for providing utility services to the public in Oregon is granted, subject to conditions, if any, stated in Appendix A.

 Made, entered, and effective .
BY THE COMMISSION:

 

______________________________

Vikie Bailey-Goggins

Commission Secretary

A party may request rehearing or reconsideration of this order pursuant to ORS 756.561. A party may appeal this order pursuant to ORS 756.580.

APPENDIX A

ITEM NO. CA2

PUBLIC UTILITY COMMISSION OF OREGON

STAFF REPORT

PUBLIC MEETING DATE: March 2, 1999

REGULAR AGENDA CONSENT AGENDA X EFFECTIVE DATE_________

DATE: February 12, 1999

TO: Bill Warren through Lee Sparling and Ed Busch

FROM: Ed Krantz

SUBJECT: UP 155, Portland General Electric Company Application for Approval of the Sale of Spare and Component Parts of the Bethel Generating Facility to Energy Services, Inc.

SUMMARY RECOMMENDATION:

Approve sale as proposed.

DISCUSSION:

Portland General Electric Company (PGE or Company) filed this application under ORS 757.480 and OAR 860-27-025 asking for approval by the Public Utility Commission (Commission) of the sale of certain PGE utility property alleged to be no longer necessary or useful for providing utility services to the public.

The property, owned by PGE since 1992 and 1995, consists of certain spare and component parts of the Bethel generating facility, including 2 stack gas analyzers, pumps, valves, combustion chamber assemblies, tools and miscellaneous parts.

PGE is seeking Commission approval of the sale of the property to Energy Services, Inc. (ESI) for $100,000. The 2 stack gas analyzers have been treated as utility property since 1992 and 1995. The other parts were purchased as minor items associated either with larger equipment for Bethel at the time of construction, or as maintenance items to have on hand for repair work; therefore, no accounting information exists on the minor items.

PGE’s lease for the Bethel turbines expired in December 1998. For economic and reliability concerns, PGE decided not to renew the lease and discontinue the operation of the generating facility. The company claims this to be in the best interest of the company and its customers.

The sales price was the product of negotiation between PGE and ESI. ESI is the only company to make an offer for this equipment. Additionally, the company states that there are no identifiable uses of this equipment elsewhere in the PGE system.

There is no indication that the proposed sale will impair PGE’s ability to provide public utility service in Oregon.

PGE proposes to record the $22,061 loss on the sale of utility plant in FERC Account 411.7, Losses from Disposition of Utility Plant, an "above-the-line" account.

STAFF RECOMMENDATION:

Staff recommends the application be approved subject to the following conditions:

1. PGE shall file, as soon as available, final executed or conformed copies of all documents related to this transaction.

2. PGE shall file, as soon as available, copies of the journal entries recording the transaction.

The order should note that approval of the accounting treatment does not constitute approval for ratemaking purposes.