Portland General’s Carty plant goes into service; renewable RFP shelved

Portland General Electric (NYSE: POR) reported in its Aug. 3 earnings statement that its gas-fired, 440-MW Carty Generating Station went into service.

“I’m pleased to report that our highly efficient Carty Generating Station is now in service and providing a safe, reliable, and cost-effective source of energy to our customers,” said Jim Piro, president and CEO. “I want to recognize and thank the many dedicated PGE employees and contractors who worked closely together to deliver this result. In addition to achieving this milestone, we also delivered another solid quarter of financial and operating performance.”

On July 29, PGE placed Carty into service at a site near Boardman, Oregon. The plant was selected in 2013 after an exhaustive planning and competitive resource selection process that began with PGE’s 2009 integrated resource plan, which the Oregon Public Utility Commission (OPUC) acknowledged in 2010. Following the termination of the construction agreement in December 2015, PGE assumed control of the project. Working with the help of key contractors on the project PGE’s project team and operating staff focused their efforts on assuring that the completed facility will safely and reliably meet energy needs.

As a result of placing the plant in-service, $514 million of capital costs as well as the plant’s operating costs approved in the 2016 General Rate Case, were included in customer prices beginning Aug. 1. The company currently estimates that the total final capital expenditures for Carty, including AFDC, will be $640 million to $660 million. On July 29, PGE filed a regulatory deferral request with the OPUC for the incremental capital cost from Carty’s in-service date until the additional amounts are approved, if necessary, under a future regulatory filing, which will depend on whether those additional amounts are offset wholly or in part by funds received from two sureties, who had provided a $145.6 million performance bond, or from the original Carty contractor or the contractor’s parent company.

PGE required the performance bond as part of financial protections incorporated into the original fixed price, turn-key engineering, procurement and construction contract for construction and delivery of Carty as a completed facility. PGE invoked the performance bond after the contractor defaulted on its construction agreement in December 2015, and is currently pursuing legal action against the sureties, Liberty Mutual and Zurich North America, to enforce satisfaction of the terms of the bond.

Also, PGE noted that on June 7, at the regular public hearing of the OPUC, PGE requested approval to issue an accelerated Request for Proposal (RFP) to obtain additional renewable resources of approximately 175 average megawatts. At the public hearing the OPUC decided to take no action on approval of the RFP and extended the public comment period until June 28. The OPUC also encouraged stakeholders to engage in timely discussions regarding any concerns with the RFP. Following numerous discussions with interested parties, on July 13 PGE submitted an amended application to the OPUC requesting approval of an updated version of the RFP by no later than July 29.

At a special public hearing on July 29, the OPUC took no action on PGE’s request to issue the accelerated RFP. The commission adopted the recommendation made by staff which concluded that the RFP was not aligned with the company’s most recently acknowledged Integrated Resource Plan (IRP). In light of the questions expressed by the OPUC, staff and other parties, the company is suspending the Renewable RFP until such time as it is able to complete further analysis and determine the appropriate timing for seeking approval of a revised RFP schedule.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.