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PSE Signs Iberdrola Deal for Winter Gas-Fired Power

Bellevue, WA-based Puget Sound Energy (PSE) has signed a deal with Portland, OR-based Iberdrola Renewables for winter-only electricity supplies from the independent power provider's Klamath generating facility in Southern Oregon. PSE signed up for 100 MW to be delivered starting Jan. 1 next year.

Coming out of a broad-based request for proposals (RFP) last year, the contract will help PSE meet its customers' winter peak electricity demand, according to a spokesperson for the combination utility. While the contract price remains confidential, PSE said the transaction terms with Iberdrola were its most favorable among more than 60 offers it received in the RFP.

Under the agreement, Iberdrola can supply PSE its power from either the 100 MW single-cycle peaking facility in Klamath Falls, OR, or from its adjacent 506 MW Klamath Cogeneration Plant. PSE currently self-generates 46% of its power supplies.

The utility said it is continuing to seek and evaluate proposals to meet its growing need for peak and off-peak power, and it plans to issue a new RFP later this year. Its 2011 integrated resource plan estimates that there is a need to acquire about 2,600 MW of additional power capacity by 2020 to meet winter peak electricity demand (see Daily GPI, April 5).

Part of PSE's future capacity needs are driven by a combination of expiring power purchase contracts, potential plant retirements in its aging fleet, and long-term population growth. With that combination in two decades, PSE estimates it will need an additional 4,200 MW.

PSE Senior Vice President Eric Markell said independent power producers like Iberdrola are playing "an important role" in his utility's changing power supply mix. "This contract gives our customers reliable power from an environmentally responsible, clean-burning [natural gas] facility," he said.

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