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Business fights forced shutdown of PGE plant

May 12, 2010

AOI Board Opposes Premature 2014 Forced Shutdown of PGE Boardman Power Plant
By John Ledger
Associated Oregon Industries

Supports the most cost effective means of achieving compliance with regulatory requirements.

The AOI Board of Directors, at its April 29, 2010 meeting, went on record in opposition to costly and premature closure of the Boardman generating facility, supporting instead an approach enabling PGE to provide reliable and cost-effective energy to Oregon companies and consumers until at least 2020. The board also approved AOI intervening with agencies on behalf of the business community. The need for reliable and competitive energy costs were cited as critical for economic recovery, long-term growth, and job creation.

PGE has asked, as an addendum to its integrated resource plan (IRP), for OPUC approval to close the Boardman plant in 2020. Sierra Club and some other, but not all, environmental groups are aggressively pushing for a 2014 forced shutdown.

Projected emission control costs for various sets of regulatory requirements (each set triggered at different times and with different timelines and costs) as well as uncertainty regarding future CO2 regulation, are the chief factors driving PGE’s proposal. According to PGE, a 2020 closure offers the best balance of cost/risk for customers. The second best alternative would be a 2040 closure, which would entail the installation of controls exceeding half a billion dollars plus unknowable CO2 regulatory costs. The most costly would be a forced shut down in 2014.

Competitive energy rates are vital if Oregon is to attract, keep and expand businesses and spur job creation. AOI supports the most rational and cost effective means of achieving compliance with regulatory requirements consistent with maintaining and enhancing Oregonian’s quality of life.

In addition to OPUC approval, the 2020 closure plan requires cooperation from the DEQ. The facility’s air permit renewal is currently out for public comment and there is a concerted campaign to have new requirements inserted into the permit so as to make the plant uneconomical to operate after 2014. In addition, DEQ rule changes will be needed to avoid exceedingly costly retrofits that would make no sense given that the plant would close by 2020.

The motion adopted by the board reads:

It is moved that AOI, because of the vital importance of reliable and affordable energy to the state’s economy, intervene with the Oregon Public Utility Commission (OPUC) and take other action, as appropriate, opposing efforts to force closure of the PGE Boardman coal-fired power plant prior to 2020.

It is further moved that the PGE Integrated Resource Plan (IRP) be referred to the AOI Environment & Energy Policy Council to review details of the proposal and report back with recommendations to the AOI Board of Directors.

The motion was adopted unanimously.

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Discuss this article

Bob Clark May 12, 2010

The economic cost, without externalities, of the Boardman plant probably runs about 2 to 3 cents per Kwh. The cost of replacement power runs between 6 to 10 cents per Kwh for new plant natural gas, 10 cent plus for new non-baseload wind power (unsubsidized), and 50 cents plus for roof top solar panels (unsubsidized). Excluding increased conservation efforts which occur on a more gradual basis, continued operation of the Boardman plant is much less expensive than its substitutes and the externalities are probably not great enough to overcome the cost advantages.

It is disappointing PGE was allowed to operate this plant so long without the best available environmental controls. If retrofitted much earlier, it would have still been an economical plant only with significantly less externalities. But this is neither here nor there now.

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