PGE pushes forward with plan to close coal plant

Portland General Electric Co. on Thursday told state regulators it will pursue a plan to close its coal-fired power plant near Boardman by 2020 — 20 years sooner than expected.

The Portland-based electric utility (NYSE: POR) said in a letter to the Oregon Public Utility Commission that it will spend about two months studying an option that will either close the controversial plant in 2020 or replace pulverized coal as its fuel source.

The 374-megawatt plant is a low-cost power source for PGE that last year accounted for 24 percent of its power supply. But it’s been vilified as a major source of haze and greenhouse gas-causing pollutants.

In September PGE filed an electricity resource plan with the PUC that called for keeping the plant open through 2040. That included spending more than $500 million on pollution-control technology in 2011, 2014 and 2017 as called for under a haze-reduction plan approved in June by the state Environmental Quality Commission.

Since then, the utility — at the urging of environmental groups and some stakeholders — has met with officials from the state Department of Environmental Quality, which has signaled a willingness to let PGE submit a rule change to the regional haze plan.

In its letter to regulators, PGE said preliminary data suggests a 2020 closure could be done “at a favorable cost and reduced risk to customers.”

In addition, closing the plant or replacing it with an alternative fuel source would provide significant carbon reductions in advance of potential federal limits on greenhouse gas emissions.

But PGE warned that it faces significant obstacles, including obtaining stakeholder approval and the “stringent requirements” called for in the regional haze plan.

PGE projects electricity demand will have climbed 20 percent by 2020. The company said that would leave them with an energy shortfall of 1,393 annual megawatts by 2020.

To fill that gap, the company is proposing a 900-megwatt natural gas-fired plant next to the coal plant near Boardman. It also hopes to build a smaller, 100 megawatt to 200 megawatt gas-fired plant near its existing gas plant near Clatskanie as a back-up power source to help integrate renewable resources.

Closing the Boardman coal plant early would widen that gap and increase the need for additional resources.