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Utah's Public Service Commission wants rate decreases, no rate increases and no layoffs as conditions to approving a merger between Utah Power & Light Co. and PacifiCorp.

The commission's long-awaited order explaining why it approves of the merger was issued Thursday, detailing findings of fact, conclusions of law and more than 20 pages of conditions.Despite assurances from both utilities that Utah's interests won't be ignored, the PSC said, "There is no denying that the proposed merger heightens the risk of loss of localized emphasis and to this extent, at least, undermines the tendency on our part to accept without reservation forecasts of merger benefits to Utahns.

"This, of course, is one of the primary reasons why our approval of this merger must be conditional."

Neither UP&L nor PacifiCorp would comment immediately on whether they could live with the numerous conditions laid down by the PSC.

"It's being reviewed by senior management. We need to understand the conditions before we can make a comment," UP&L spokesman Dave Mead said.

UP&L and PacifiCorp announced their plans to merge in August 1987. Regulatory agencies from the seven states the merged utility would serve have all approved the merger. Approval from the Federal Energy Regulatory Commission is pending.

The PSC said it will reconsider its order if final federal approval and conditions change the merger's impact for Utah.

Under the $2 billion stock swap arrangement, UP&L would become a division of PacifiCorp, headquartered in Portland, Ore. But the Utah service area would generate about 40 percent of the merged company's revenues.

Both utilities have promised rate reductions between 5-10 percent for UP&L customers as a result of the merger. The proposed marriage would realize savings of almost $500 million in the first five years, the utilities said.

As a condition of approval, the PSC order requires the utility to file for an across-the-board 2 percent rate reduction within 60 days of the merger's final approval. Within four months, the order said, plans to reduce rates another 3-8 percent over the next four years must be filed.

The merged company will also have to certify that retail rates "will never be raised as a result of the merger."

Commissioners also require UP&L and PacifiCorp to not fire any Utah employees as a result of the merger. Any work force reductions must be by attrition, and any promotions should occur "with reasonable proportionality between the Utah and Pacific divisions."

Local support and representation on the PacifiCorp board are also necessary conditions for commission approval, the order said.

Other conditions dealt with guaranteeing regulatory access and oversight of finances and other operations of the merged utility.

Direct costs of the merger, estimated at $18.5 million, should be borne equally by ratepayers and shareholders, the PSC said, but any risk involved in paying a premium for UP&L stock, estimated between $412 million and $750 million, must be assumed by shareholders.

During the merger hearings last spring, discussions focused on how and when cost and revenue allocation methods of the merged company should be established. The PSC's order requires the merged utility to hold meetings with all the states it serves, discuss allocation issues, employ the state's Energy Balancing Account to allocate net power costs and use equitable methods in allocating other costs.

Based on the findings and conditions, a "reasonable share of the (merger's) benefits" will be passed on to Utahns, the PSC said, and the merger "will result in net positive benefits to the stockholders, ratepayers and employees of the newly merged system."