Portland General Electric reports natural gas plant 60 percent complete
PGE working with state, stakeholders on recovering Carty costs
The plant is scheduled to be placed into service during the second quarter of 2016 at an estimated cost of $450 million, excluding allowance for funds used during construction (AFDC), PGE President and CEO Jim Piro said during a quarterly earnings call with financial analysts.
The 500 kV Grassland substation serving the site has been completed and construction of the 24-mile lateral gas pipeline commenced in early June.
PGE’s large areas of focus include the Environmental Protection Agency (EPA) Clean Power Plan to cut power sector carbon dioxide emissions 30 percent by 2030 as well as replacing the Boardman coal plant and complying with Oregon’s 20 percent renewable standard by 2020, Piro said.
PGE will file its integrated resource plan (IRP) in 2016, Piro said.
In February, PGE filed a general rate case with the Oregon Public Utility Commission (OPUC) with a 2016 test year, which would result in an overall price increase of 3.7 percent effective in 2016, primarily to recover the costs associated with the Carty plant. The request is based on a return on equity of 9.9 percent, a capital structure of 50 percent debt and 50 percent equity, and rate base of $4.5 billion.
In June, a partial stipulation was filed covering agreements reached among PGE, OPUC Staff, and other parties on a variety of issues in the proceeding, including cost recovery of the Carty Generating Station, subject to meeting certain conditions. In addition, PGE has updated load forecasts and filed revised 2016 power cost estimates.
Generation, transmission and distribution expense decreased $1 million, or 1 percent, in the second quarter of 2015 compared with 2Q14. A $3 million decrease resulting from differences in the timing of the annual planned maintenance outages at Boardman plant in 2014 and 2015 was largely offset by higher operating and maintenance expenses in 2015, driven by the addition of Port Westward Unit 2 and Tucannon River, and higher information technology expenses.
The 267 MW Tucannon Wind project started operation in December 2014. Likewise, the roughly 220 MW Port Westward Unit 2 gas-fired generator was also placed into service in December 2014. PGE has said Port Westward 2 will help integrate intermittent renewable resources.
The planned maintenance outage at Boardman occurred in the first quarter of 2015, compared with the second quarter of 2014. Boardman will stop burning coal by the end of 2020.
PGE reported net income of $35 million, or 44 cents per diluted share, for the second quarter of 2015. This compares with net income of $35 million, or 43 cents per diluted share, for 2Q14.
"Higher energy deliveries and excellent operations, including strong system reliability and power supply management, collectively offset the effects of lower hydro and wind conditions," Piro said.
Wind power generation is also down, around 30 percent, so far this year, the company official added.
Portland General Electric continues to benefit from an Oregon economy that is in better shape than the nation as a whole, Piro said.