PGE to build additional natural gas plant at Port Westward

PORTLAND, Ore. — Portland General Electric Company (NYSE: POR) today announced its proposed Port Westward Unit 2 flexible generating resource, to be located near Clatskanie, was selected as the successful bid in a capacity request for proposals to help meet customer needs and provide system reliability. PGE will begin construction of the plant this year, and expects to have the new resource online in 2015.

Port Westward Unit 2 was the company’s benchmark proposal in a competitive bidding process seeking approximately 200 megawatts of flexible peaking capacity. The process was initiated in 2011 and overseen by an independent evaluator who reports to the Oregon Public Utility Commission.

“Port Westward Unit 2 will be an important, versatile resource to meet our customers’ current and future needs,” said Jim Piro, PGE’s president and CEO. “The new natural gas plant will be a highly efficient and environmentally responsible facility designed for maximum flexibility to help meet real-time fluctuations in customer demand and integrate variable renewable resources like wind and solar into PGE’s system. It will also serve as a ‘peaking’ resource during periods of high demand, helping maintain system reliability.”

The 220-megawatt plant will be located adjacent to PGE’s existing natural gas-fired Port Westward and Beaver plants in Columbia County. The project will create up to 200 new construction jobs, and is expected to cost between $285 million and $310 million, excluding allowance for funds used during construction.

Port Westward Unit 2 will use reciprocating engine gensets supplied by Wärtsilä. Black & Veatch and Oregon-based Harder Mechanical, as a contractual joint venture, will have the turnkey contract for construction of the project.

The RFP was conducted pursuant to competitive bidding guidelines established by the OPUC, using objective scoring criteria intended to identify projects that will provide the best balance of cost and risk while meeting PGE customers’ needs for reliable, affordable electric power.

The RFP also sought 300 to 500 megawatts of baseload energy resources, as well as seasonal capacity resources. PGE has completed its evaluation of bids. The company will begin negotiations soon with the top bidder from the final short list of baseload projects. The bids on the final short list include power purchase agreements and PGE-ownership options. PGE intends to ask the independent evaluator to monitor the negotiations for the baseload resource. The company will also conduct negotiations to secure power purchase agreements for the seasonal capacity resources.

Accion Group Inc., the independent evaluator selected by the OPUC, oversaw the RFP and review of bids to assure an objective and impartial process.  On Jan. 30, 2013, the independent evaluator gave the OPUC a final assessment of the bid scoring and final short list selection, and a closing report with a detailed assessment of the process. The independent evaluator report confirmed “the RFP was conducted in a fair and unbiased manner and that the Final Short List accurately identified the Bids with the most value for PGE customers.” The report and more information about the competitive bidding process are available at PortlandGeneralRFP.accionpower.com.

PGE also issued a separate RFP last year, seeking approximately 100 average megawatts of renewable power to help meet Oregon’s Renewable Energy Standard. The company is currently evaluating the bids received. Final selections are expected by June 2013, and PGE expects the resources acquired will be brought into the company’s portfolio in the 2013-2017 timeframe.

DOE Names Bill Drummond As New BPA Administrator

 WASHINGTON – The Energy Department has chosen Bill Drummond to be the new Administrator for the Bonneville Power Administration (BPA), one of the four Power Marketing Administrations (PMAs) the Department oversees. As BPA’s Administrator, Drummond will be responsible for managing the non-profit federal agency, which markets carbon-free power from Columbia River hydroelectic dams and operates the surrounding power grid, distributing wind, nuclear and other energy to the Pacific Northwest and beyond. Drummond’s leadership of BPA is part of a larger strategy for each of the Department’s PMAs to help lead the 21st century transformation of our nation’s electricity sector. Reliable and affordable electricity is a foundation of economic growth and a resilient electric grid also helps to better protect our national security. Drummond currently serves as BPA’s deputy administrator and has worked in the energy industry for over 30 years.

“The leadership of BPA is critically important because America’s continued global competiveness in the 21st century will be significantly affected by whether we can efficiently produce and distribute electricity to businesses and consumers, seamlessly integrating new technologies and new sources of power,” said Secretary of Energy Steven Chu.  “I look forward to working with Bill Drummond to help lead BPA’s transition to a more flexible, resilient, and reliable electric grid and establish much greater coordination among system operators in partnership with its customers.”

“The Bonneville Power Administration is truly fortunate to have Bill Drummond as its new Administrator to lead the agency,” said Deputy Secretary of Energy Daniel Poneman. “Drummond has a stellar track record during his time at BPA and throughout his career in the energy sector, and I am fully confident in his ability to provide the highest level of leadership and service to BPA’s customers, constituents, and employees. I also want to thank Administrator Steve Wright for his outstanding leadership of BPA and congratulate him for his achievements over the past twelve years in which he has served as Administrator.”

“Bonneville represents the best expression of public vision and achievement; collaborative relationships, environmental stewardship and a commitment to operational excellence,” said Drummond. “I am grateful for this opportunity and look forward to my new role at BPA.”

Drummond began serving as BPA’s deputy administrator in October 2011, which included providing strategic leadership and executive management to the agency. In addition to his responsibilities as deputy, he oversaw the agency’s General Counsel, and Compliance and Governance, Risk Management, Internal Audit, Public Affairs, Finance, and Corporate Strategy functions.

Before joining BPA, Drummond was manager of the Western Montana Electric Generating and Transmission Cooperative in Missoula, Montana, for 17 years. From 1988 to 1994, he led the Public Power Council, an association of all Northwest publicly-owned utilities. During his 30 years in the energy industry, Drummond has been a leader on many regional task forces and committees, including the Bonneville Environmental Foundation, Northwest Energy Efficiency Alliance, Northwest Wind Integration Forum and Northwest Energy Efficiency Task Force. Nationally, he has served on committees of the American Public Power Association and the National Rural Electric Cooperative Association.

Drummond holds degrees in forestry from the University of Montana and economics from the University of Arizona.

The Energy Department conducted a competitive process under the federal civil service rules to select a new BPA Administrator. BPA has annual revenues exceeding $3.2 billion, over 3,100 full-time employees, and employs approximately 1,500 contractors. Current BPA Administrator Steve Wright announced his plans to retire in June of last year, and Drummond will begin serving as Administrator following Wright’s retirement early next month.

American Gas Association Releases 2013 AGA Playbook

Washington, D.C. – The American Gas Association (AGA) today released the 2013 Playbook, the essential handbook for natural gas information. The 2013 Playbook includes up-to-date facts about natural gas, including information about pipeline safety, supply, responsible resource development and energy efficiency.

“Thanks to an unprecedented abundance of domestic natural gas, this affordable resource is changing the energy industry and our nation’s economy. It is no surprise that there is a lot of attention focused on this clean, domestic, abundant foundation fuel,” said Dave McCurdy, president and CEO of AGA. “We update the Playbook each year because it is imperative we provide the facts and help inform policy makers, media and the public about the realities of natural gas. The 2013 AGA Playbook will help make sure people have access to a current, fact-based narrative about the natural gas industry.”

The 2013 Playbook covers the history of natural gas, the challenges and opportunities of the natural gas industry, and the priority issues and strategies with respect to the production, transmission, distribution and use of America’s clean and domestically abundant energy source. It also contains information about innovation and direct economic benefits including industry-related jobs.

McCurdy continued, “AGA’s Playbook outlines how natural gas can deliver on the promises of helping increase our energy security, improve our environment and boost our economy. America’s natural gas utilities are delivering these promises today, and increased use of this foundation fuel can help address many of the energy challenges facing our nation.”

The 2013 Playbook can be accessed online. If you are interested in hard copies, please contact Sherri Hamm at shamm@aga.org or 202-824-7201.

Natural Gas Term of the Week: Degree Day

 What it means: An index indicating the difference between 65 degrees Fahrenheit and the average temperature for a day.

See it in action: How does an NWGA member company with a large operating territory, like Avista, compare the different heating and cooling requirements in Medford and Spokane? One of the key means of comparison are degree-days; I’ll leave it to NOAA to describe how they are calculated:

“To calculate the heating degree days for a particular day, find the day’s average temperature by adding the day’s high and low temperatures and dividing by two. If the number is above 65, there are no heating degree-days that day. If the number is less than 65, subtract it from 65 to find the number of heating degree-days.

For example, if the day’s high temperature is 60 and the low is 40, the average temperature is 50 degrees. 65 minus 50 is 15 heating degree days.

Cooling degree-days are also based on the day’s average minus 65. They relate the day’s temperature to the energy demands of air conditioning. For example, if the day’s high is 90 and the day’s low is 70, the day’s average is 80. 80 minus 65 is 15 cooling degree days.”

While utilities use all manner of sophisticated analytical tools to help plan their energy needs for each year, degree-days provide a great overview of weather variability. As a winter peaking region for natural gas use, most of the Northwest will see many more heating degree-days each year than cooling degree-days.

However, there’s still plenty of variability in our region. In Avista’s two large natural gas service areas, Spokane sees an average of 6842 heating degree-days and 398 cooling degrees days while Medford averages 4611 heating degree-days and 725 cooling degree-days. It’s not hard to see who gets the rougher winters.

Natural Gas Terms of the Week are posted each Monday, check back weekly to boost your natural gas IQ.

Follow the NWGA on Twitter: @Ben_at_NWGA

Natural Gas Term of the Week: Combination Utility

 What it means: Utility which supplies more than one utility service, such as gas and electricity.

See it in action: Three of the NWGA’s 10 members are combination utilities, serving both natural gas and electric customers; Avista Utilities, based in Spokane, Washington, Puget Sound Energy, based in Bellevue, Washington and FortisBC, based in Vancouver BC.

Combination utilities don’t always provide both of their services to customers in the same area, or even in the same states.  Puget Sound Energy’s service area encompasses a large portion of Northwestern Washington with significant portions devoted to both gas and electric service and other areas providing only one or the other.  Avista provides both gas and electric service to much of Eastern Washington and Western Idaho but also supplies natural gas to a large section of Southern Oregon and portions of the Columbia Gorge. FortisBC provides gas service to the Vancouver metro area and portion of inland BC while their power operations are focused along the Canada-U.S. border in the central portion of the province.

Natural Gas Terms of the Week are posted each Monday, check back weekly to boost your natural gas IQ.

Follow the NWGA on Twitter: @Ben_at_NWGA