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PGE Oregon Gas-Fired Plant Delayed; Contractor Fired

Portland General Electric (PGE) has fired the contractor building its 440 MW Carty Generating Station and stopped construction of the project, it said. The plant was on track to open during the second quarter.

PGE has declared the contractor responsible for engineering, procurement and construction (EPC) at Carty in default of its construction agreement, and the contractor, a unit of Abengoa SA, stopped work at the site Dec. 14. PGE said it assumed control of the construction site last Friday. Abengoa has filed for bankruptcy.

PGE is assembling a new team to finish the project. "Initial work has begun to prepare the site for construction to resume," a PGE spokesperson said.

In late October, PGE CEO Jim Piro said construction at Carty was 70% complete on the then-estimated $450 million generation plant at Boardman, OR, adjacent to a coal-fired plant scheduled to be retired in 2020. At that time, Piro said Carty was "on budget and on track" to start operations in 2Q2016 (see Daily GPIOct. 28).

PGE officials said they have begun discussions with project insurers Liberty Mutual Surety and Zurich North America, which provided a performance bond of $145.6 million under the original construction agreement. The two companies will also provide the bonding on contractors entering into agreements to complete work, they said.

"Carty is estimated to be about 75% complete and was expected to be online during the second quarter at a cost of up to $514 million," the spokesperson said. "Once construction has resumed and PGE has completed an assessment of the current project status, the company will provide an update on the expected costs and completion date for the project."

When Carty was announced in 2013, Abeinsa Abener Teyma General Partnership, an Abengoa SA affiliate, won a competitive bid for the project. Construction began in January 2014.

Abengoa SA recently initiated a process to seek restructuring of its debt under Spain's bankruptcy law where the company is headquartered.

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