When Your Utility Gives Up on Your State
Portland General Electric will pay $1.9 billion to acquire PacifiCorp's entire Washington operation, 140,000 customers, three power plants, and the distribution lines that connect them, because PacifiCorp has concluded that serving six Western states simultaneously has become impossible, according to the companies' January 2025 announcement. PacifiCorp cited "diverging policies among the six states" as creating "extraordinary pressure," a rare public admission that America's state-by-state approach to energy regulation has made operating regional infrastructure unmanageable.
This isn't a typical utility acquisition. PacifiCorp isn't selling because Washington is unprofitable or because PGE made an irresistible offer. The purchase price, 1.4 times the estimated 2026 rate base, is modest by industry standards, suggesting PacifiCorp prioritized escape over maximizing value, according to financial analysts covering the transaction. The company operates as Pacific Power in California, Oregon, and Washington, and as Rocky Mountain Power in Idaho, Utah, and Wyoming. It serves roughly two million customers and owns more regulated wind capacity than any other Western utility, according to company filings. Yet it's now dismembering itself, state by state, because the regulatory environment has fractured beyond what a single company can navigate.
Six States, Six Rulebooks, One Grid
The mechanics of multi-state utility regulation explain why PacifiCorp is retreating. Every state where the company operates has its own public utility commission, its own legislature setting energy policy, and its own political priorities. California accelerates coal plant retirements and mandates renewable energy purchases under its SB 100 clean energy law. Wyoming protects coal jobs and resists emissions regulations. Oregon sets aggressive climate targets under its 2021 climate law. Idaho takes a different approach to rate design. Utah and Washington each have their own timelines, their own definitions of "clean energy," and their own ideas about who should pay for wildfire prevention.
A utility spanning all six must satisfy all six simultaneously. When California orders faster coal retirements, the costs flow through to customers in Wyoming, who didn't vote for California's legislature. When Wyoming fights to keep coal plants online longer, Oregon customers, who voted for climate action, subsidize that decision. Rate cases become six separate negotiations, each with different assumptions about the company's future. Infrastructure investments require approval from six commissions that may have contradictory views on whether natural gas is a "bridge fuel" or a liability.
The pressure isn't abstract. PacifiCorp faced this exact problem with wildfire liability following the 2020 wildfires that burned over 1 million acres across Oregon and California. Oregon and California imposed strict rules holding utilities responsible for fire damage, even when the utility followed all safety protocols. Wyoming and Idaho took different approaches. The result: a single company operating under incompatible legal frameworks, unable to develop a coherent risk management strategy because the rules kept changing depending on which state a transmission line crossed.
What Washington Is Losing
The sale transfers the Chehalis natural gas plant, the Marengo wind facility, the Goodnoe Hills wind facility, and the distribution infrastructure serving Yakima, Walla Walla, and surrounding communities, according to the transaction details. These are largely rural areas, agricultural towns that have been Pacific Power customers for decades. They didn't choose a new utility. They're being transferred because their current utility couldn't manage the regulatory complexity of operating in six states at once.
PGE, which currently serves only Oregon, will now cross the Columbia River. The company's CEO, Maria Pope, framed the acquisition as expansion, and PGE expects the deal to increase earnings within the first year, according to the company's investor presentation. But the more revealing detail is what PacifiCorp's CEO, Darin Carroll, said about why his company is selling: the transaction will "improve PacifiCorp's financial stability and simplify its operations." Simplification, in this context, means serving fewer states. Stability means reducing exposure to conflicting regulatory demands.
How the Transfer Actually Works
The transaction must clear multiple regulatory hurdles before a single Washington customer sees PGE's name on their bill. First, the Washington Utilities and Transportation Commission will conduct a months-long review evaluating whether the sale serves the public interest, a standard that includes rate impacts, service quality, and grid reliability. Oregon's Public Utility Commission must simultaneously approve PGE's expansion into a new state and its financing arrangements. According to utility regulatory timelines, this dual-state approval process typically takes 12 to 18 months.
During that review period, both commissions will examine PGE's financial capacity to operate the acquired assets. The involvement of Manulife Investment Management as a financing partner means regulators will scrutinize whether outside investors' return expectations could pressure PGE to cut maintenance spending or seek rate increases. Washington's commission can impose conditions, requiring specific service quality metrics, capping rate increases for a transition period, or mandating infrastructure investments, before approving the transfer.
For the 140,000 affected customers, the practical impact depends entirely on these regulatory decisions. If Washington's commission approves the sale without rate conditions, PGE could file for rate increases within months of taking control, arguing it needs to recover acquisition costs or upgrade aging infrastructure. The company's standard Oregon residential rate currently runs about 11.5 cents per kilowatt-hour, according to PGE's 2024 rate schedules. Pacific Power's Washington customers currently pay approximately 10.8 cents per kilowatt-hour under rates approved in 2023. Whether that gap closes, widens, or disappears depends on what conditions regulators attach to the sale and how aggressively PGE pursues cost recovery.
The Precedent This Sets
If shedding Washington improves PacifiCorp's financial performance, and the company clearly believes it will, other multi-state utilities will notice. The grid itself is regional. Wind doesn't stop blowing at state lines. Transmission infrastructure crosses borders. Power demand in one state affects prices in the next. But regulation remains stubbornly local, and the gap between how electricity moves and how it's governed is widening.
PacifiCorp still operates in five states. How long before it's four? The company is now demonstrably willing to exit markets where the regulatory burden outweighs the returns. California, with its aggressive climate mandates and wildfire liability rules, seems like an obvious candidate. So does Oregon, which shares California's policy direction. The irony: PacifiCorp is the largest regulated owner of wind power in the West, a clean energy leader being forced to break itself apart at precisely the moment climate policy demands regional coordination.
Who Decides Your Power Company
The 140,000 Washington customers being transferred to PGE had no vote in this decision. Utility regulation operates in a strange democratic gap. Customers can't switch providers, electricity is a natural monopoly. They can petition their state utility commission, but the commission's job is to balance ratepayer interests against utility financial health, and those interests don't always align. When a utility decides a state is too difficult to serve, customers have no mechanism to object beyond public comment periods that rarely change outcomes.
Both states will evaluate whether the transaction serves the public interest, but the definition of "public interest" is itself contested. Does it mean lower rates? More renewable energy? Grid reliability? Job preservation? Each state answers differently, which is precisely the problem PacifiCorp is trying to escape.
The System Breaking
PacifiCorp describes itself as "one of the lowest-cost electrical providers in the United States" in its corporate materials. That claim is harder to maintain when you're operating under six different regulatory regimes, each pulling in different directions. Low costs require operational efficiency, and efficiency requires predictability. When you can't predict whether California will order early coal retirements, whether Wyoming will fight to keep plants open, or whether Oregon will impose new wildfire liability rules, you can't plan. And when you can't plan, costs rise.
The sale won't solve the underlying problem. It just moves the boundary. PGE will now operate in two states instead of one, inheriting the same challenges PacifiCorp faced, just on a smaller scale. Washington and Oregon have different energy policies, different political climates, different ideas about the pace of decarbonization. PGE will discover whether two states are manageable in a way six states weren't.
What happens if they're not? The grid doesn't get smaller just because utilities do.