PacifiCorp Plans to Shed Operations
PacifiCorp, hit by losses and the prospect of lower rates, said Friday that it will sell nearly all operations aside from its electric utility business in the West and abandon global expansion plans.
The announcement marked an abrupt about-face for the Portland, Ore.-based electric utility company, which a year ago was in the throes of an ultimately futile bid to acquire Britain’s Energy Group.
“We’ve spent a lot of time and money trying to transform ourselves into a global energy company without success,” PacifiCorp Chairman Keith McKennon, who took the helm in August, said in a statement. “I don’t think we need to be transformed.”
PacifiCorp, which has 1.4 million electricity customers in California and six other Western states, said it will sell its natural gas storage and marketing unit, its eastern U.S. electricity trading business and stakes in joint ventures outside the United States.
The company said it would retain its Australian power distribution business, Powercor, but would sell its 19.9% stake in a power plant near Melbourne.
PacifiCorp announced its new plan as it reported a third-quarter loss of $92 million, or 31 cents a share, including $151 million in charges related to its exit from unregulated energy businesses. The company earned $68 million, or 23 cents a share, a year ago, which took into account a $65-million loss related to the Energy Group bid.
The company said it will take unspecified charges in the fourth quarter for its cost-reduction efforts.
PacifiCorp also announced long-awaited details of a plan to buy back up to 13%, or about $750 million, of its stock during the next 12 months and said it aims to achieve $30 million in savings from more layoffs and other steps.
The company spent millions of dollars on the takeover battle for Energy Group and also saw its energy trading unit stumble this year, losing $38 million in the second quarter when power prices in the Midwest soared dramatically.
Investors were not overly impressed, and PacifiCorp stock fell 31 cents to close at $20.06 on the New York Stock Exchange.
