Portland General expects lower hydro output

Portland General Electric expects lower-than-normal hydropower generation in the northwest US for the rest of 2015 after an unusually warm winter depleted snowpack in the water-rich region.

Water runoff in April-September is projected at 78pc of average at the Dalles Dam in Oregon and at 86pc of average at the Grand Coulee dam in Washington, the company disclosed in its first quarter earnings report.

Portland General's reliance on hydropower output, both its own and purchased externally, was in fact 10pc higher in the first quarter than expected because winter runoff started early. The hydropower generation for calendar-2015 still should be lower than average.

The impact of lower hydropower output on the company's power purchases is still uncertain, chief executive Jim Piro said yesterday on an earnings call. "As we look through the rest of the year, a lot of it will depend on how the hydro shows up, when the market prices [are] and what kind of loads we see in California, whether there is any heat this summer."

Wind output in Portland General's territory should follow an opposite trend. Wind generation was 36pc lower than expected in the first quarter but it should be normal later in the year. The decrease in wind production occurred even though the 267MW Tucannon River wind farm started up in December. New production from Tucannon somewhat offset the decline in generation from the 450MW Biglow Canyon farm.

Mid-Columbia peak summer 2015 assessments are $34/MWh, a 15pc discount to the year-earlier prescheduled average. That discount is 25pc for California's NP-15 hub.

Portland General is starting work on its next integrated resource plan, which will have to tackle the retirement of the 585MW Boardman coal plant in Oregon that will shut in 2020. The company said construction of the 440MW gas-fired Carty Generating Station is on track for completion in 2016.

The company will have to add energy and capacity resources to replace Boardman and meet Oregon's renewable energy target of 20pc by 2020, chief operating officer Jim Lobdell said. Portland General will consider building generation on its own but also will issue a request for proposals for external capacity, he said.

The expected decrease in coal's share in the generation mix has Portland General considering investments in natural gas reserves. "We have been talking to consultants looking at where gas prices are, whether there is an opportunistic attempt to acquire natural gas," Piro said. The company discussed the possibility with state regulators and will not decide until later this year.

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