Sierra Pacific Nixes Merger Plans
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RENO, Nev. (AP) _ Sierra Pacific Resources has abandoned plans to buy the largest electric utility in Oregon from Houston-based Enron Corp., citing the need to protect shareholders in a sour Western energy market.
Sierra Pacific and Enron mutually agreed to terminate Sierra Pacific’s purchase of Portland General Electric, which serves the Portland metropolitan area in Oregon and southwest Washington state. The completion of the transaction had been doubtful for the last couple of weeks.
``While this acquisition would have offered many efficiencies in utility distribution for customers in both Nevada and Oregon, completing it was becoming increasingly difficult in the current market and political environment in the West,″ said Walt Higgins, chairman and CEO of Sierra Pacific Resources in Reno.
Sierra Pacific Resources owns Nevada Power Co., Sierra Pacific Power Co., Tuscarora Gas Pipeline Co. and Sierra Pacific Communications.
Enron, an energy marketing company, bought Portland General Electric in 1997 but found energy deregulation moving too slowly in Oregon to meet its plans, and it began to shop for a buyer for the utility.
Sierra Pacific Resources announced plans in November 1999 to buy it for $3.1 billion in cash and assumed debt, an amount similar to what Enron paid two years earlier.
But energy shortages and high wholesale electricity prices cut into Sierra Pacific’s finances last summer. Reports surfaced earlier this month that the Reno-based holding company was having second thoughts about the deal.