Klamath Falls natural gas plant to provide 100 MW to Washington utility

Klamath Falls, Ore., May 27, 2011 – Iberdrola Renewables today announced a winter-only power purchase agreement with Puget Sound Energy for 100 MW of electricity from Iberdrola’s natural gas-fired Klamath generating facility in Southern Oregon.

The transaction, which takes effect Jan. 1, 2012, is designed to help PSE meet its customers’ wintertime peaks in electricity demand. While the contract price is confidential, PSE said the transaction’s terms were the most favorable of the 60-plus power-supply offerings the utility received during a formal 2010 request for proposals.

PSE currently self-generates about 46 percent of its customers’ electric energy, Markell noted, with the rest purchased from other power producers.

Under the new contract, PSE will receive 100 MW of power from Iberdrola’s single-cycle “peaker” generating facility in Klamath Falls, although Iberdrola has the option to supply the energy from its adjacent, 506-MW Klamath Cogeneration Plant.

PSE continues to seek and evaluate proposals to meet its growing need for peak and off-peak power going forward, and plans to issue a new power-supply request for proposals later this year.

The utility’s 2011 draft Integrated Resource Plan estimates that the utility will need to acquire about 2,600 MW of additional power capacity by 2020 to meet its customers’ peak wintertime electricity demand. PSE’s capacity need – driven by expiring purchased-power contracts, potential retirement of aging PSE power plants, and long-range population growth – rises to about 4,200 MW two decades from now.

Iberdrola’s Klamath Cogeneration Plant on April 26 was recognized with Oregon OSHA’s VPP Star status, the highest designation for safety and health excellence from the Voluntary Protection Program in the United States.

The project has won many awards. When commissioned in 2001, Klamath became the cleanest fossil-fuel power plant ever constructed in the U.S. in terms of greenhouse gas emissions. It was a model for Oregon legislation that now governs the carbon dioxide emissions of new fossil-fuel power plants built in the state.

In addition to greenhouse gas mitigation, Klamath uses up to three million gallons per day of treated municipal wastewater provided by the city of Klamath Falls to meet 100 percent of its cooling needs, helping the city reduce its discharges into the Klamath River by about two million gallons per day.

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