A senior staff member of the Oregon Public Utilities Commission has informed Portland General Corp. and Enron Corp. that the PUC plans to recommend disapproval of the proposed merger between the two utilities.

The decision will run in the staff's final report, which is expected to be released April 11. "We are not trying to kill the merger," said Phil Nyegaard, PUC staff member.

The staff believes that Enron's offer of $61 million in guaranteed cost savings and rate reductions does not provide sufficient benefits to meet the mandates for merger approval.

In a court-ordered auction held March 19, a federal bankruptcy court judge selected a proposal by LG&E Energy Corp. to lease the generating assets of Big Rivers Electric Corp.

LG&E Energy will lease about $1.3 billion of the generating assets of the bankrupt Henderson, Ky., cooperative for 25 years, and provide power to Big Rivers to serve its member cooperatives and 90,000 customers.

Previously, it appeared PacifiCorp would get the lease agreement, which is the centerpiece of the Big Rivers' reorganization plan. But U.S. District Judge Jennifer B.

Moody's Investors Service has concluded that a properly structured securitization backed by the future cash flow from a utility's stranded investments can achieve a credit rating higher than the rating of the senior debt of the utility.

Moody's said this ability bodes well for the increasing number of investor-owned utilities expected to issue up to $75 billion of such securities by 2000 to recover uneconomic investments.

Zond Development Corp. will supply MidAmerican Energy Co. with 45 MW of wind-generated power per month for 20 years. Terms of the agreement were not released, but Zond will begin supplying energy within three years of regulatory approval. The contract helps fulfill the utility's alternate energy requirements under Iowa law. Zond will generate the power from about 150 wind turbines planned for Buena Vista County. The windmills will interconnect with the MidAmerican transmission system at a nearby substation.

CMS Energy Corp.'s energy marketing unit, CMS Marketing, Services and Trading, hired David B. Geyer as v.p., risk management. Geyer's responsibilities include hedging, arbitrage and trading. CMS Generation Co.'s contract with Thailand's AMATA-EGCO Power Ltd., prompted the promotion of W. David Carni from operations superintendent to operations and maintenance plant manager.

Walter J. Gilbert, Volunteer Energy Corp. v.p., will head the company's newly opened office. Gilbert's added duties include special projects relating to gas acquisition, gas purchasing and marketing.

If Jane Austen were writing this column, she would begin something like this: "It is a truth university acknowledged, that a natural gas distributor in possession of a good franchise must be in want of an electric utility to merge with."

That's the rule of electric/gas convergence. But as an editor, my instinct when I uncover such a "rule" tell me to look for a reason why it ain't so. That's why I got such a kick from a recent conversation with Sheldon Silver, the speaker of the New York State Assembly.

Some in Congress would link customer choice with a portfolio standard. How would that play in a wholesale power market where gas turbines rule the roost?

By Michael C. Brower and Brian Parsons

WHAT KINDS OF POWER PLANTS WILL

get built in a deregulated electric industry? If recent history offers any guide, utilities and independent power companies will succumb to the traditional wisdom and invest in gas-fired combustion turbines and combined-cycle plants. Sound reasons may exist for doing so. The plants are less expensive than conventional steam plants. They put less capital at risk.

Enova/PE merger finds

California utilities learning

how to "micro-unbundle."

here's a meter war ticking away out West, pitting natural gas against electricity.

Enova Corp. is set to acquire Southern California Gas Co. through a merger with the gas utility's parent company, Pacific Enterprises. This strategy raises a tantalizing question: Can the new, merged company sell electricity "through" SoCalGas meters, using customer contacts on the gas side to grab market share in electricity from Southern California Edison, whose territory overlaps that of SoCalGas?

Competitors would have LDCs quit the merchant function and restrict

their dealings with affiliated marketers. But is that really good for consumers?

Those who would restrict business dealings between natural gas local distribution companies and their marketing affiliates (em going so far as to ban LDCs from the merchant function (em often overlook one critical downside: what those rules would mean for the small gas customer.

A regulatory policy for a code of conduct and LDC merchant service must improve the position of consumers.

Everybody's got an opinion on electric competition, and they're dying to be asked.

Last year the Colorado Public Utilities Commission opened Docket No. 96Q-313E, In the Matter of the Inquiry Into Electric Utility Industry Restructuring. Then, after weighing several options, and rather than preempt the policy discussion, the PUC mailed a 26-page questionnaire to 360 people identified as "having an interest" in electric utility issues, including investor-owned electric utilities, rural electric cooperatives, municipal utilities and others.

What it learned could fill a book ....