Jul. 11--SALEM -- By Dave Hogan, The Oregonian, Portland, Ore. Knight Ridder/Tribune Business News

With legislative leaders continuing to negotiate a final budget deal, the Oregon House met Sunday evening to approve a short list of bills, including one that could aid the conversion of Portland General Electric to a consumer-owned utility.

The weekend activity made the Capitol a busy place on the six-month anniversary of the session, which began Jan. 10.

In its first floor session in four days, the House's most significant vote was to approve Senate Bill 671, which would set up a financing method for a group of investors to buy PGE and convert it to a customer-owned utility.

The House had voted Wednesday to adjourn until the weekend after Republican leaders said there was little for members to do during negotiations on the state's 2005-07 budget.

The budget wrangling continued through the weekend. On Saturday, Republicans from the House met for about 12 hours with Democratic leaders from the Senate, as well as with Gov. Ted Kulongoski's chief of staff. Their negotiations resumed Sunday evening and included House Speaker Karen Minnis, R-Wood Village, who had missed Saturday's meetings due to illness.

When the House returned Sunday, members voted 43-14 to approve the legislation designed to aid the efforts by Oregon Mutual Utility Development Inc., a group of Portland-area businesspeople and utility executives.

Theirs is one of three competing efforts to mount a public takeover of PGE, including one by the Legislature and one by the city of Portland. PGE is owned by Enron and is the state's largest utility, with 765,000 ratepayers.

SB671 would authorize the state Public Utility Commission to require a utility to collect enough money in rate payments to cover the debt of a bond-financed acquisition. That would essentially guarantee a revenue source for the debt, lowering purchase costs through low-interest borrowing.

House members expressed reservations about the financing method, saying they worried it could increase PGE customers' rates. They also noted that a variety of consumer and industry groups opposed the legislation.

"SB671 is risky business, and I ask you not to gamble with Oregon's future," said Rep. Chip Shields, D-Portland.

But Rep. Derrick Kitts, R-Hillsboro, emphasized that the bill would only put a purchasing mechanism in place, and the PUC would retain its ability and responsibility to approve such a purchase only if it provided net benefits to Oregonians.

"You're putting a tool in the toolbox," Kitts said in urging members to approve the bill.

The bill is being pushed by influential lobbyists Dave Barrows and Larry Campbell on behalf of a group of investors that includes former PacifiCorp chief executive Fred Buckman and Jim Hansen, an entrepreneur and venture capitalist from Lake Oswego.

Hansen has said the bill is the first step in a process to buy PGE and convert it into a consumer-owned utility patterned after a cooperative or mutual utility.

The PUC, which regulates investor-owned utilities, would oversee the newly transformed PGE, creating what Hansen has described as a hybrid public-private utility. He has said that after financing is secured through SB671, he and his partners would meet with consumer groups to explain the venture in more detail and answer questions.

The Senate approved SB671 by a 19-9 vote on July 1, so it now goes to the governor, who has not said whether he will sign it into law.

"He has some reservations about it," spokeswoman Anna Richter Taylor said Sunday evening. "His focus is on education and economic development, and it's not clear how this would advance either of those priorities."

Enron hasn't announced interest in any of the public purchase options. The company, which emerged from bankruptcy late last year, is moving forward with a plan to transfer ownership to creditors through the distribution of PGE stock.

The House had been expected to vote on another closely watched bill Sunday. House Bill 2010 would create a Child Protection Unit in Attorney General Hardy Myers' office to oversee how the Department of Human Services responds to reports of child abuse and neglect and, how it cares for children in its custody.

The House decided, however, to send the bill back to the State and Federal Affairs Committee. The legislation needs additional details and guidance for the oversight by the attorney general's office, said Rep. Brian Boquist, R-Dallas.

Members of both the House and Senate will return to the Capitol today.

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