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Pacific Northwest Gas-Fired Power to Get More Storage

Previously announced plans for expanding natural gas storage to serve expanded gas-fired power generation in the Pacific Northwest are moving along on schedule through the Oregon regulatory process, Portland-based NW Natural CEO Gregg Kantor said Tuesday during a quarterly earnings conference call.

The company reported slightly higher quarter-over-quarter 2Q2015 profit and a 1.5% increase in customers reflecting a rebounding economy in Oregon, led by the greater Portland area housing market. Kantor offered a bullish status report on the plans to expand the company's Mist underground gas storage facility to accommodate Portland General Electric Co.'s (PGE) expanded gas-fired Port Westward generation plant along the Columbia River northwest of Portland.

Since reaching agreement with PGE on the storage expansion late last year (see Daily GPIMarch 2), NW Natural has been progressing through various permitting and land acquisition work, which involves state infrastructure siting and energy units.

"This project would provide no-notice natural gas storage services to the PGE power units at Port Westward," Kantor said.

Expansion includes opening a new 2.5 Bcf reservoir, an additional compressor station and new pipeline. Kantor said the estimated cost remains approximately $125 million with an in-service target of the winter of 2018-2019.

In April, the gas utility filed an application with the Oregon Siting Council to amend its existing certificate for operating Mist, and subsequently, it has provided details on the expansion plan to the Oregon Department of Energy. The next major step comes later this year when the siting council and energy unit publish a proposed order.

"Between now and the proposed order, we will continue to work with both organizations to address any questions that arise while we also work on addition permits and property rights needed," said Kantor, noting that with timely approvals the project should stay on budget and on schedule.

NW Natural's other growth initiative is a "carbon solutions" filing that the utility made to the Oregon Public Utility Commission (PUC) in July, in response to new state legislation (SB 844) allowing the PUC to incentivise gas utilities to undertake steps to reduce greenhouse gas emissions (GHG).

As part of its initial effort, NW Natural promises to step up the use of combined heat-power (CHP) in Oregon, a goal the state has had for many years, Kantor said. Industrial customers wanting to invest in CHP could be eligible for incentive funding from the gas utility.

The key is NW Natural being able to verify the carbon savings, a monitoring/review capability that is going to become even more important given the Obama administration's new GHG emissions reduction requirements for power plants (see Daily GPIAug. 3).

"In our view, this is a very important effort that could provide a very significant carbon reduction benefit for our customers, and Oregon" Kantor said, adding that the PUC is expected to act on the utility's filing by year-end.

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