In what ultimately amounts to gambling with taxpayer dollars, the Portland city government is arranging a behind-closed-doors deal with PGE. The deal states that PGE will purchase hydroelectric power from the city at more than the market rate and that Portland will pay damages if not enough power is produced.
While the City Budget Office claims that the Water Bureau stands to gain $3 million to $8.5 million over the course of the deal’s 15-year span, an independent risk analysis stated that the city could lose as much as $800,000 over the next three years.
The deal’s wins or losses will directly impact police salaries, firefighter salaries, parks maintenance, and homeless and affordable housing initiatives – not generally things that the average Oregonian would want to gamble with. Certainly not when the amount being gambled is hidden behind a nondisclosure agreement between PGE and the city.
Steve Corson, a spokesman for PGE, alleges that the nondisclosure agreement is needed in order for PGE to keep its competitive advantage in the energy market. What Corson is inadvertently admitting to here is crony capitalism – not illegal, but not exactly ethical, either.
Even Portland Mayor Ted Wheeler, while still supporting the agreement, likened it both to shady private equity deals and to a game of poker.
Fortunately, according to Robert McCullough of McCullough Research, a local energy consulting firm, federal regulations require that energy companies publicly disclose each quarter how much they pay for power. These regulations are designed to prevent market manipulation and have the power to override local agreements; even if the deal is pushed through in secret, PGE should be forced to disclose their end come next quarter.
If the deal does go through, the impact it will have on the city and its citizens will depend almost entirely on the weather over the next decade-and-a-half. Not exactly a predictable or reliable fulcrum, to say the least.