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Puget Sound Completes Storage Expansion

Bellevue, WA-based Puget Sound Energy (PSE) said last Tuesday it has completed an 18-month, $44 million expansion of the Pacific Northwest's major natural gas storage reservoir, Jackson Prairie in Lewis County, WA. The facility now is capable of meeting a quarter of the region's peak winter gas demand, PSE said.

Developed in the 1960s, Jackson Prairie has a 23 Bcf capacity spread over 3,200 acres in an operation jointly owned by PSE, Spokane, WA-based Avista Corp. and interstate pipeline operator Williams.

Separately, the utility announced late Oct. 31 that it has asked the Washington Utilities and Transportation Commission (WUTC) to pass through federal tax credits that PSE has earned for its two wind generation facilities, Wild Horse and Hopkins Ridge. It would add to the credit for PSE's retail utility power customers, giving them a monthly savings of about $1.68 starting in January.

The WUTC also is in the final review phase considering the outstanding $7.4 billion merger proposal by a consortium led by the New York City-based unit of Australian investment firm Macquarie Infrastructure Partners. The prospective buyers include Macquarie Capital Group, the Canada Pension Plan's CPP Investment Board, British Columbia Investment Management Corp., Alberta Investment Management Corp. and Macquarie-FSS Infrastructure Trust. Combined they make up Puget Holdings, the acquiring company.

With the Jackson Prairie gas storage expansion completed, PSE said the facility can handle the peak daily natural gas demand of 1.2 million homes across the Northwest, representing a 35% increase in the facility's natural gas withdrawal capacity -- from 850 MMcf/d to 1.15 Bcf/d.

The utility now has more assurance that it can deliver reliably on the coldest winter day, according to Kimberly Harris, PSE executive vice president. "The existing natural gas transportation system, on its own, simply can't deliver enough natural gas from Canada and the Rockies to meet our region's peak winter daily demands. This expansion lets us store and withdraw significantly more natural gas to supplement the regional pipeline system and keep people's homes warm."

The expansion increases by 10% the total gas volumes that are now available on a peak-usage day, PSE said. During the past 18 months, construction crews have added 10 new wells, each about 2,000 feet deep, to the original 35 wells that were in place at Jackson Prairie.

In addition to boosting Jackson Prairie's withdrawal capacity, PSE since 2002 has been steadily increasing the facility's total storage capacity.

Regarding the wind power credits, Harris said the utility through the newly extended federal tax credits passed through to its retail customers 100% of the benefits. The production tax credit for wind was extended through 2009 as part of Congress passing the emergency economic bailout law Oct. 3.

PSE senior executives have promised state officials that none of this will change under the proposed private capital owners, although the state Public Counsel, from the Washington state Attorney General's Office, remains opposed to the merger. A settlement was reached in July and filed with state regulators. It includes WUTC staff, the Industrial Customers of Northwest Utilities, Northwest Industrial Gas Users, the Energy Project, the Northwest Energy Coalition and the Kroger Co., but not the Public Counsel.

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