Portland General Electric (NYSE: POR) said in its Oct. 28 third-quarter earnings report that Carty, a 440-MW natural-gas fired baseload generating resource near Boardman, Oregon, went into service on July 29 and is operating as designed and had a 92% availability rate through September.
Beginning Aug. 1, Portland General Electric (PGE) began recovering the $514 million of capital costs, as well as the plant’s operating costs approved by Oregon regulators as part of the 2016 General Rate Case (GRC) in customer prices. As of Sept. 30, PGE had $615 million recorded as plant in-service related to Carty. The company currently estimates that the total capital expenditures for Carty, including allowance for funds used during construction, will be $640 million to $660 million. This cost estimate does not reflect any offsetting amounts that may be received from the sureties pursuant to the performance bond or from Abeinsa Abener Teyma General Partnership (Abeinsa), the contractor or Abengoa S.A., the contractor’s parent company.
PGE said it continues to pursue legal action against Liberty Mutual and Zurich North America, the two sureties that provided a $145.6 million performance bond on the Carty project. At the end of July 2016, the U.S. District Court of Oregon ruled against the sureties’ motion to stay the proceedings in the U.S. District Court for Oregon and ruled in favor of PGE’s motion to enjoin the sureties from an International Chamber of Commerce arbitration proceeding filed by Abengoa under a parental guarantee on the project. As a result, the first phase of the case with the sureties – which will determine whether PGE’s termination of the contractor was proper – is currently scheduled to begin trial in the U.S. District Court of Oregon in June 2017.
Additionally, in early October, the U.S. Bankruptcy Court granted PGE’s motion for relief from the stay imposed by Abeinsa’s Chapter 11 bankruptcy proceeding, and, on Oct. 21, PGE filed a complaint in the U.S. District Court of Oregon against Abeinsa on the Carty project for alleged failure to satisfy its obligations under the terms of the Carty construction agreement.
Also, PGE said it is finalizing its 2016 integrated resource plan (IRP) and expects to file it with the Oregon Public Utility Commission (OPUC) in mid-November. The plan continues to reflect a shift to a less carbon-intensive supply portfolio consistent with the new Oregon Clean Electricity and Coal Transition Plan which calls for 50% renewables by 2040. The 2016 IRP addresses the need for additional resources to meet the law’s requirements of 20% renewables by 2020 and to replace energy and capacity from PGE’s Boardman plant, which will cease coal-fired operations at the end of 2020. Actions identified through 2020 are also expected to offset expiring purchase power agreements and integrate variable energy resources, such as wind or solar generation facilities.
The proposed four-year Action Plan associated with the draft IRP includes a minimum of 135 MWa of new cost-effective energy efficiency, 77 MW of new demand response, and the addition of approximately 175 MWa in new qualifying renewable resources. The plan also identifies the need for up to 850 MW of new capacity resources, which includes 375 MW-550 MW of long-term dispatchable resources and up to 400 MW of annual (or seasonal equivalent) capacity resources, to meet reliability needs.
The final IRP plan filed with the OPUC may include modifications to the draft. Acknowledgment of the 2016 IRP is targeted for mid-2017. Upon acknowledgment, PGE will request approval from the OPUC to issue one or more Requests for Proposals to acquire needed resources.
Portland General Electric is a vertically integrated electric utility that serves approximately 863,000 residential, commercial and industrial customers in the Portland/Salem metropolitan area of Oregon.