To Close or Not to Close: PGE Ponders Fate of Oregon Coal Plant

December 30, 2008

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Portland General Electric is facing a “dirty dilemma,” as Oregon’s Department of Environmental Quality has revived the 28-year-old issue of one of its main sources of power, the Boardman Generating Station.

Situated about 150 miles east of Portland, the coal-fired plant uses 330 tons – or nearly three rail cars worth – of pulverized coal dust an hour at full throttle. Each week Boardman consumes four to five 115-car freight trains worth of coal.

But Boardman is PGE’s cheapest source of power on the open market, where it gets about 25 percent of its generation and 15 percent of its overall demand, reports The Oregonian. Coal-fired electricity is one-half to two-thirds cheaper than burning natural gas, and domestic supply is still cheap and plentiful.

The newspaper called Boardman’s operations “19th century technology,” but ShopFloor was quick to point out that the plant does employ some modern techniques to control emissions.

In early December, however, Oregon passed new haze-reduction rules for the plant, meaning that PGE must reduce Boardman’s output of oxides of nitrogen, sulfur dioxide, particulate matter, and mercury over the next decade, spending about $472 million in new equipment. Inflation and financing costs could balloon the total cost to more than $700 million, PGE said.

The investment would not only raise energy rates for consumers by 3 percent, but it is also an incomplete solution: The new equipment will do nothing to control carbon dioxide.

Under new, speculated legislation, industrial polluters could soon be paying for every ton of emitted CO2. With rates ranging from $10 to $70 per ton, a plant like Boardman would have to shell out $50 million and $350 million annually.

To avoid steep costs, PGE is adding renewable energy sources as fast as it can, making solar polar purchases, opening its first wind farm, and issuing a request for bids from other sources. Still, only 4 percent of PGE’s electricity comes from renewables today, so it is far from meeting the Oregon state mandate requirement of 25 percent by 2025.

Despite Oregon’s forward-moving hydro power industry, the state still gets 40 percent of its electricity from coal-fired plants like Boardman. Customers have been plaintively unwilling to pay more for a change: Just 8 percent of PGE customers have chosen to pay an extra 10 percent to get 100 percent of their electricity from renewable sources.

This story has been corrected. An earlier version referred to PGE as Pacific Gas & Electric instead of Portland General Electric.

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