New PGE Boardman plant $100M over budget

PENDLETON — Portland General Electric hopes to have a generating station in commercial service before the end of the month even though it's more than $100 million over budget.

PGE originally planned to complete the startup phase of its 440-megawatt natural gas power plant near Boardman by end of July. The company turned on the turbines for the first time on June 21, reported The East Oregonian.

The July 31 deadline comes from the Oregon Public Utility Commission's 2016 General Rate Case order for Carty Generating Station.

The station is being built in the shadow of the Boardman Coal Plant. It burns natural gas to drive one turbine and captures excess heat to create steam that powers the other turbine. It's called a combined cycle system, which PGE says is up to 15 percent more efficient than other models.

Carty will help PGE deal with growing demand, according to the company's long-range energy plan. Most PGE customers live in and around the Portland metro area.

Utility spokesman Steve Corson says it's a good sign that the plant has been fired up, but there's a lot of work left to do before it's ready to go online. "This is, without a doubt, a complex situation," Corson said.

PGE said the service date could be delayed because of uncertainty about shoddy work by Abeinsa, a former contractor, according to a recent filing with the U.S. Securities and Exchange Commission.

The company says it found potentially deadly defects at the plant after it fired Abeinsa. PGE said it's working to fix issues that could cause severe safety hazards if not addressed.

The project also has 52 liens placed on it by local subcontractors who claim they weren't payed to their work, according to Morrow County.

These issues have caused the estimated cost for Carty to rise between $635 million and $670 million. The amount previously approved by the utilities commission is just $514.

Abeinsa is a subsidiary of Abengoa, a Spanish multinational corporation that has filed for Chapter 15 bankruptcy in the U.S. Abengoa claims it was wrongfully terminated by PGE, causing the insurance companies that backed a $145.6 million bond to deny liability.

PGE is suing the companies, Liberty Mutual Surety and Zurich North America, for damages.

The company plans to ask for a rate increase to pay the additional costs for Carty unless its bond is recovered. Anticipating Carty's completion this year, the utilities commission has already approved a small rate increase for 2016.

If the plant is not up and running by July 31, PGE says it will work with the utility to determine how and when rates will be affected moving forward.


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