Sierra Pacific deal draws analysts’ interest
CARSON CITY – Sierra Pacific Resources’ agreement to buy Portland General Electric from Enron for $3.1 billion has piqued the interest of regulators, industry analysts and experts.
”It’s always surprising to hear about a deal of this magnitude, but it seems to be in line with both companies’ business plans,” said Don Soderberg, chairman of the NevadaPublic Utilities Commission.
Enron appears more interested in generating power and being a power marketer while Reno-based Sierra Pacific wants to focus on the electric utility wires and distribution business, he added.
That focus by Sierra Pacific may be a business opportunity for Southwest Gas, spokesman Roger Buehrer said, adding, ”We would be interested in discussing with them the purchase of their natural gas service.”
Sierra Pacific distributes natural gas to Reno and neighboring Sparks. Some of the gas comes through Southwest Gas’ Paiute Pipeline, but Sierra Pacific also draws gas from the Tuscarora Gas Pipeline, which it owns jointly with TransCanada PipeLines Ltd.
Sen. Randolph Townsend, R-Reno, applauded the acquisition news. He’s chairman of the Senate Commerce and Labor Committee and father of the state’s new electric deregulation bill.
”This is one more step in the never-ending saga of having a competitive marketplace,” he said.
The acquisition makes Sierra one of the biggest utilities in the West and will make it difficult for an out-of-state company to succeed in a possible hostile takeover of Sierra Pacific, the lawmaker added.
Soderberg said the PUC has jurisdiction over the creation of a new holding company, and the Federal Energy Regulatory Commission must approve the acquisition. He added FERC may use the opportunity to push for creation of a regional transmission organization.