While signaling that Pacific Northwest hydroelectric supplies this year should remain strong, Portland General Electric (PGE) senior executives said Tuesday that two major new natural gas-fired generation plants are on schedule to be online by 2016.
The gas-fired plants, along with a large wind project, will help add $1.2 billion in rate base for PGE in the next two years, according to CEO Jim Piro, who gave the update on major capital projects as part of a conference call reporting 2Q2014 profits of $35 million (43 cents/share), compared with a net loss of $22 million (29 cents/share) for the same period last year.
Piro and CFO Jim Lobdell said the economy in PGE's territory has picked up. In anticipation of continuing modest growth in electric demand, PGE is completing the Port Westward II 220 MW gas-fired power plant adjacent to an existing gas-fired plant along the Columbia River, and the 440 MW Carty gas-fired plant adjacent to the coal-fired Boardman plant, which is slated for closure in 2020.
Completion of the second Port Westward plant -- a $300 million project -- is expected before the end of the year with commercial startup early next year, Piro said. The $450 million Carthy plant is slated to come online in 2016. The $500 million, 260 MW wind project in southeastern Washington is also slated for completion next year.
The new plants are all on schedule and on budget, said Piro. When they are all operational by 2017, PGE's total rate base will grow to $4.5 billion, a $1.2 billion increase from where it stands now, he said.
On the upswing in the economy, Piro said PGE's customer total is up 1%, new utility customer connections are up 25% year over year, and "we continue to see expansion in multi-family construction and the high tech sector. Employment indicators continue to be positive. Unemployment is at its lowest level since August 2008."
Lobdell said PGE is in the process of filing an updated integrated resource plan (IRP) that will reset its future capital expenditure plans. "We may have to address the need for additional [generating] capacity in that IRP," he said, noting that there still needs to be a replacement power source for Boardman ahead of its closing in 2020. "There are a number of generating resource decisions that will have to be made.
"We feel like we'll have plenty of opportunities to invest capital [going forward]," Lobdell said.
In response to a separate question, Lobdell said hydroelectric supplies were still 102% of normal.