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NatGas 'Critical' to Oregon's Carbon-Reduction Goals, NW Natural CEO Says

Implementation of an Oregon law to phase out coal use in power generation will depend heavily on using natural gas as a backup as the state’s reliance on renewable resources grows, Portland-based NW Natural CEO Gregg Kantor said this month during a first quarter earnings conference call.

Natural gas and its supporting infrastructure, he told analysts, "will be critical" to achieving the renewable energy and coal phase-out goals under the Healthy Climate Change bill (SB 1574) (see Daily GPIMarch 3). NW Natural's proposed Mist gas storage field expansion is an example, he said.

The storage field “will back-up intermittent wind resources by serving Portland General Electric's (PGE) expanded gas-fired generation plant at Port Westward," Kantor said. "The project will provide no-notice storage services to Port Westward, including a new reservoir providing up to 2.5 Bcf of storage to the power plant, along with an added compressor station and pipeline."

Previously announced plans, he said, for expanding gas storage to serve gas-fired power generation in the Pacific Northwest is on schedule in the Oregon regulatory process (see Daily GPIAug. 5, 2015).

Last month, NW Natural received a “critical permit” from the Oregon Energy Facility Siting Council, and over the next few months the gas utility plans continue its request-for-proposals (RFP) process for the engineering procurement construction (EPC) portion of the work and and to obtain the remaining permits and land rights for the $125 million project.

Kantor cautioned that the cost estimate is based on bids received in 2014 and could change depending upon the outcome of the upcoming RFP process. "We expect to award the EPC contract and receive a notice-to-proceed from PGE this summer," he said.

The project is targeting a start-up date for the winter of 2018-2019.

In 1Q2016, NW Natural reported net income of $36.6 million ($1.33/share), compared with $28.5 million ($1.04) for the same period in 2015.

Kantor is set to retire Aug. 1 when COO David Anderson is to take over.

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