ScottishPower to Buy PacifiCorp.
Link to ScottishPower Web Site
PacifiCorp Profile From Infoseek
A Scottish company is making waves all the way to Utah.
Governor Mike Leavitt says, "I need to see why it is we ought to be turning control of a Utah resource, power, over to an entity in Scotland."
The Scots have struck a deal to take over Utah Power and its multi-billion-dollar parent company. Environment Specialist John Hollenhorst reports.
The announcement caught a lot of people off guard, but insiders knew something was up because transatlantic negotiations have been underway for several weeks. The big question for Utah regulators: Iis it in the public interest to turn over control of electrical power to the Scots?
Okay, suppose the power lines go down during a storm. Who do you call? Dave Eskelsen of Utah Power says, "Well, nobody's gonna have to call Scotland."
Utah Power officials say customers may not even notice a change. But the business world is already sitting up and taking notice. It would be the first purchase of an entire U.S. utility by a foreign company.
Portland-based Pacificorp, which took over Utah Power nearly a decade ago, has agreed to be swallowed by Scottish Power. The firm is based in Glasgow Scotland, where they have a reputation for, well, thriftiness.
"Both of these companies have a reputation for thriftiness," Eskelsen says, "And being a low cost provider of electricity. We expect that to continue."
Pacificorp shareholders will get a 21 percent premium on the market value of their stock. Pacificorp and Utah Power would remain essentially unchanged, officials say, and the resulting company will be better for shareholders and ratepayers.
"Electric companies are going to get more competitive. And there are going to be more companies, more choices for consumers. A larger, stronger company will be better able to compete in that environment," Eskelsen predicts.
But Utah's Governor says he's having a hard time seeing a benefit to Utah ratepayers. "Just the basic notion of turning control of the electricity in Utah over to a foreign entity raises concern for me," the Governor says.
Utah's Public Service Commission will likely study the deal for months. Steve Mecham, Chair of the Public Service Commission, says, "Such an essential service for modern life, we're clearly going to have to take a good, long, hard look."
The companies have shaken hands, but this is far from a "done deal" from a government perspective. Several federal agencies and six different states will be scrutinizing the transaction. Any one of them could be in a position to block the deal.
