Portland General Electric (PGE) has filed for regulatory approval to add 860 MW of gas-fired capacity and 50 MW of solar power to its Carty Generating Station (440 MW) in Boardman, Oregon. Just the gas-fired expansion requires a permit from the Oregon Public Utility Commission (OPUC) – the solar portion only needs to demonstrate its cost-competitiveness with similar projects.
Oregon’s two largest utilities, PGE and PacifiCorp, are keen to expand their clean energy portfolio after the state government in March stepped up Oregon's renewable portfolio standard to 50% by 2040. The state’s Coal Transition Plan seeks to get Oregon off coal-fired power by 2035.
Quest to accelerate RFP process for Carty phase-2
Seeking to boost its green credentials, Portland General Electric on June 7 filed for regulatory approval to issue an accelerated Request for Proposal (RFP) to add approximately 175 MW of renewable power sources – 50 MW of which at the Carty power station.
The Oregon Public Utility Commission, however, extended public comment period and ultimately concluded in early August that the RFP was not aligned with Portland General’s most recently acknowledged Integrated Resource Plan (IRP). An updated version of the RFP was since submitted to the regulator.
Changes in PGE’s power plant portfolio include the July start-up of the Carty power plant, as well as additions of the addition of 220 MW gas-fired Port Westward unit 2 (project cost: $311m) and the 267 MW the Tucannon River wind farm, both in December 2014. Oregon’s more stringent renewable performance standards require 20% of PGE’s retail load to be serviced by renewables by 2020 – a share that needs to be stepped up to 45% by 2035.
Financial quarrels with phase-1 EPC contractor
Phase 1 of the Carty open-cycle gas power plant entered commercial operations in July this year, after financial constraints hindered Portland General Electric to start operations before the end of 2015, as initially planned. The 440 MW plant is driven by a G-class Mitsubishi gas turbine.
Right after placing the plant in-service, PGE included $514 million of capital costs as well as operating costs (approved in the 2016 General Rate Case) in customer prices starting from August 1. Total Capex is estimated to amount to up to $660 million, the operator stated; hence it filed a deferral request to the regulator on July 29 for the incremental Capex, noting that additional amounts should be partly offset by a $145.6 million performance bond agreed with the plant’s turnkey EPC contractor.
Declaring Abeinsa, a subsidiary of near-bankrupt Abengoa, in default of their construction agreement in December last year – PGE is now embroiled in a legal battle to recover funds related to Carthy project’s performance bond.