Portland General Electric (PGE) is considering another baseload natural gas-fired generation unit in the 2019-2021 time frame to make up for the scheduled closing of its Boardman coal-fired plant in north-central Oregon in 2020, PGE CEO Jim Piro said last week.
The latest projection came in anticipation of the Oregon-based utility completing an updated integrated resource plan (IRP) this year in which the plans for post-Boardman are to be outlined. It also comes at a time when PGE opened a 220 MW gas-fired unit at its Port Westward generation plant northwest of Portland along the Columbia River, and is in the midst of building a 440 MW gas-fired facility, Carty, adjacent to the existing Boardman plant (see Daily GPI,Jan. 2).
Boardman's closure creates a "significant hole that will have to be replaced" in PGE's IRP, said Piro. In the planning process the utility will have to identify the "lowest-cost, lowest-risk way" of making up for the 560 MW coming from Boardman.
"Once we had that vetted and acknowledged by the Oregon Public Utility Commission in an action plan, we would go forward with a RFP [request for proposals] as we have done before, benchmarking resources for potential energy capacity and renewables," Piro said. "The mix of resources will be a very interesting discussion with all of our stakeholders to find the right balance of cost and risk.
"To the extent that it is a baseload resource, the new plant would likely be gas-fired, but we'll look at the mixture between gas-fired and renewables. If we replaced Boardman with a gas unit, it would be a second unit at Carty, a 440 MW gas-fired baseload resource."
That scenario would be a self-build project by the utility that would win out against renewable and other options in an RFP, said Piro, during an earnings conference call.
Boardman is set to close at the end of 2020, so if a gas-fired replacement wins out, which Piro said is the way things tend to look currently, PGE would like to have the project under way in mid-2020 at the latest. "We'd like it to be available in 2021," he said.
"If we were to win the IRP and our benchmark resource was chosen, we would start construction in the 2019 time frame," Piro said. "Carty is being developed as a two-unit plant so we have adequate space to build [the second unit]."
The 220 MW added unit at Port Westward is a flexible capacity project that went into service the end of last year. It came in ahead of schedule and under budget, Piro said, adding that there is still another $20 million of capital expenditures planned early this year, bringing the total cost to about $350 million.
The first Carty unit is expected to open in the second quarter of 2016 at a total cost approaching $450 million, and if a second unit wins out for replacing Boardman's coal facility, Piro said he expects it to cost about the same.
The company reported it earned $47 million (59 cents/share) in 4Q2014, compared with $43 million (55 cents) for the same period in 2013. For the year PGE earned $175 million ($2.18) versus $105 million ($1.35) in 2013.