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PGE Eyes Coal Plant Closure in '20 by Associated Press The Dalles Chronicle, January 15, 2010

PORTLAND -- Oregon's largest utility is proposing to close the state's only coal-fired power plant 20 years sooner than planned.

The proposal Portland General Electric Co. advanced Thursday would require approval of state and federal regulators.

PGE's existing plan calls for it to invest a half-billion dollars in pollution controls at the Boardman plant to comply with federal and state clean air rules, then operate it until 2040. Under the new proposal, the company would make a $45 million investment next year to partially clean up emissions of mercury and oxides of nitrogen, then run the plant only until 2020.

The utility says the 2020 shutdown appears to be the lowest-cost, least-risk plan for utility ratepayers and shareholders.

It sent a letter detailing its revised plan to the Oregon Public Utility Commission. The plan would require the approval of Oregon's Environmental Quality Commission and the federal Environmental Protection Agency. The company said it would spend the next 60 days seeking input from all those affected, then seek formal approval.

PGE Chief Executive Jim Piro said utility leaders met in November with state Department of Environmental Quality officials, "and they indicated some willingness to consider it."

"They couldn't guarantee how the EQC would decide, but we're making progress," Piro said.

Under the existing plan, the utility risks making a huge investment to control haze-causing pollution -- which does nothing to control the plant's carbon emissions -- then seeing the plant's electricity become prohibitively expensive if lawmakers implement some form of carbon tax as part of global warming legislation.

"We think an alternative plan could reduce cost and risk for our customers while giving us time to develop replacement resources or convert to a different fuel, but we'll need changes in state rules and help from our stakeholders to accomplish that," Piro said.

A number of environmental and ratepayer groups have urged the earlier shutdown.

Portland Mayor Sam Adams said Thursday he was "pleased and encouraged" by PGE's proposal.

"Achieving closure by 2020 would significantly reduce greenhouse gas and other emissions," Adams said.

Boardman, which burns strip-mined coal shipped in by train from Wyoming's Powder River Basin, provides a stable source of low-cost electricity. The plant accounts for about 25 percent of the power generation owned by PGE, and 15 percent of the energy consumed by its customers.

In the next few years, the utility will see long-term contracts expire for the cheap hydropower that it buys from municipally owned dams on the mid-Columbia River.

The company has been reluctant to worsen that resource shortfall by shutting a key plant any sooner than required. It is warning that ratepayers will have to deal with far more fuel-cost volatility as the company builds up its reliance on natural gas-fired generation.

PGE has already proposed building two new gas plants, one near the existing Boardman plant, and a smaller unit next to the utility's existing gas plant in Clatskanie to fill in when customer demand peaks during summer and winter. If the coal-fired plant in Boardman is closed in 2020, PGE would consider a second gas-fired power plant in Boardman, Piro said.

Related Pages:
New Power Plan is Good Start, But Needs to Attack Coal Plants by Beres & Patton, Seattle Times, 9/27/9
NW Power Panel: Save Juice, Build Fewer Plants by Associated Press, Seattle Post-Intelligencer, 9/3/9