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Clean Coal, Natural Gas Essential Part of NW Mix, Energy Execs Say

Clean coal and natural gas-fired electric generation must be part of the energy mix in the Pacific Northwest, along with wind and hydro-electric sources, according to two regional industry executives speaking Thursday at an energy conference in Seattle. The power and natural gas sector's continuing volatility is accompanied by robust growth that is an opportunity for coal and gas both, the speakers said.

"How do we develop new power generation sources in this highly volatile, but growing market?" Tom Brueger, project manager at Richland, WA-based Energy Northwest, asked rhetorically at the Law Seminars International conference, "Buying and Selling Electric Power in the West."

Krueger and Calgary, Alberta-based Pristine Power Inc. Vice President Kevin Gilchrist advocated a "diversified mix" of fuel sources in a region that historically has viewed itself as the home of "too-cheap-to-meter" federal government-produced hydro-electric supplies from Bonneville Power Administration (BPA).

Energy Northwest is a not-for-profit state-sanctioned "joint operating agency" (JOA) in the state of Washington with 19 public-sector utilities as members who buy power from various projects it finances and operates for the consortium. The entity has a $1 billion clean coal gasification/generation project, Pacific Mountain Energy Center, proposed for southern Washington state at Kalama. Energy Northwest provides power generation to its members "at or near cost," Krueger said.

"Our focus is to develop generation and operate it at or near costs and we're very competitive; we're trying to pursue energy options that help the overall energy mix," he said, noting that through its 1,157 MW Columbia Nuclear Plant it provides 12% of BPA's power supplies.

Along with low-impact hydro, wind and very small solar plants, Energy Northwest's Pacific Mountain integrated coal project (IGCC) is supposed to generate 600 MW at two combined-cycle generating units using synthetic gas produced from coal.

"Natural gas drives the price for electricity over the region," said Krueger, who added that more than 70% of the time gas drives the wholesale price of electricity (compared to 90% in California).

Pristine Power's Gilchrist said the Northwest has to "backstop renewables with gas-fired generation."

As it moves toward a regulatory filing for the clean coal plant, Energy Northwest also will be searching for long-term off-take contracts for the plant, which could be online by 2012, Krueger said. "We think the IGCC (integratred gasification combined cycle) is a great option," he said, noting a targeted 2007 for start of construction of the plant.

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