Iberdrola Renewables Contract Will Help Puget Sound Energy Meet Customers’ Peak Power Needs

Klamath Falls plant to provide Washington utility with more Northwest energy

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May 26, 2011

KLAMATH FALLS, Ore. — Iberdrola Renewables today announced a winter-only power purchase agreement with Puget Sound Energy for 100 megawatts (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.

“Independent power producers like Iberdrola Renewables play an important role in our overall power-supply mix,” said Eric Markell, PSE senior vice president and chief strategy officer. “This contract gives our customers reliable power from an environmentally responsible, clean-burning facility.”

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.

“Iberdrola Renewables is delighted to add PSE to its growing list of repeat customers,” said Martin Mugica, executive vice president of Iberdrola Renewables. PSE in 2007 signed a 20-year power purchase agreement with Iberdrola Renewables for 50 MW from its Klondike III Wind Power Project also located in Oregon. Mugica added, “We can provide other Northwest utilities a variety of peaking and baseload capacity products from this nationally recognized clean gas-fired resource.”

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 (VPP) 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. The plant won Power Magazine’s Power Plant of the Year 2001 award when it came online and won Oregon Gov. John Kitzhaber’s 2000 Community and Economic Development award. Klamath Cogeneration won “Best of the Best” honors for operations and maintenance at the Combined Cycle Journal's 2008 Best Practices Awards, and a total of 12 Best Practices awards from 2007 – 2011.

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.

About Iberdrola Renewables:

Iberdrola Renewables, Inc. is headquartered in Portland, Ore, with more than 850 employees at the end of 2010. It is part of the Iberdrola Renovables global group, the world's leading provider of wind power with more than 12,500 megawatts of renewable energy in operation around the world, and more than 4,700 megawatts of that wind power located in the U.S. www.iberdrolarenewables.us


About Puget Sound Energy:

Washington state’s oldest local energy utility, Puget Sound Energy serves more than 1 million electric customers and 750,000 natural gas customers in 11 counties. A subsidiary of Puget Energy, PSE meets the energy needs of its customers through incremental, cost-effective energy efficiency, procurement of sustainable energy resources, and far-sighted investment in the energy-delivery infrastructure. PSE employees are dedicated to providing great customer service and delivering energy that is safe, reliable, reasonably priced, and environmentally responsible. For more information, visit www.PSE.com.

Media Contacts:

Art Sasse, Director, Communications & Brand, Iberdrola Renewables, 503-796-7740
Paul Copleman, Media Relations, Iberdrola Renewables, 207-641-2805
Roger Thompson, Puget Sound Energy, 1-888-831-7250