Battle for Power

Giant Bonneville and Grand Coulee Dams generate the power for homes and industries in the Pacific Northwest. They also generate the hottest fight in the U.S. over public v. private ownership of utilities.

Last week private power, battered but still belligerent after ten years of battle, was beset anew. The assault came from a brand-new public power team of strong public utility districts, Rural Electrification Administration units and privately financed cooperatives. Behind them all, as a silent partner, stood the strongest force of all: gigantic, federally owned Bonneville.

The team, called Interstate Electric, Inc., was organized as a non-profit cooperative for the specific purpose of acquiring the $49 million Pacific Power & Light Co., serving northern Oregon and southern Washington. Pacific Power, Interstate felt, was the most vulnerable of the four big private utilities in the area. Reason: SEC had ordered Pacific's parent holding company, American Power & Light to dispose of its holdings of Pacific Power common stock.

Farmers' Friend. To Interstate's chairman, slight, bespectacled Charles Baker, 48, the job of getting Pacific Power looked no more complicated than anything he has done as a farm leader. Baker had organized the Pacific Supply Cooperative in 1934 with only $300. This year he expects the cooperative to gross $10 million. He began by buying goods wholesale for farmers, finally branched out with 104 retail stores in seven western states, sold seed, fertilizer, farm machinery, gas and oil.

Buying Pacific Power may prove a long, hard battle. Pacific Power's bristling, tough president, Paul Boole McKee, plans to fight to the last kilowatt. If the U.S. Supreme Court upholds the SEC decision, as expected, the parent company can still: 1) distribute its Pacific common stock holdings to its own stockholders; 2) sell the common stock.

Said Paul McKee confidently: "There's no law which says we have to sell to public power groups. These cooperatives . . . can't bring condemnation proceedings, so they have to have a willing seller.''

Utilities' Enemy. Nevertheless, the bitter, unrelenting pressure of public powerites has made other utility men willing to sell. Up till now this pressure has been greatest against the $134 million Puget Sound Power & Light Co., serving central and western Washington. For ten years Puget Sound Power has outmaneuvered the complicated strategy of the public powerites. The man behind the campaign against Puget Sound was Manhattan's Guy C. Meyers, the fiscal agent who sold all of Nebraska's utilities into public ownership (TIME, Jan. 8). Last week Guy Meyers was on the move again. Within 30 days, he announced, he would make a firm offer for Puget Sound Power & Light. And Puget Sound, tired of the fight, was rumored ready to listen to a good offer, namely the $135 million it thinks that the company is worth.

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