Portland General Electric Company (POR - Free Report) has come up with an approximately $1 billion investment plan in a new gas-fired power plant in Central Oregon and a new wind farm in Southeastern Washington.
The utility plans to construct a natural gas-fired power plant near Boardman, which would cost around $440 million to $455 million. The plant will use a Mitsubishi turbine that is capable of generating 440 megawatts (MW), enough power to serve about 300,000 residential customers. Portland General will own and operate this new facility, which is scheduled to be online in 2016. It is expected to create around 500 jobs during the construction phase.
The utility also agreed to spend as much as $535 million for development rights to Phase Two of the Lower Snake River wind farm near Dayton, WA, north of Walla Walla. It is currently under development by Puget Sound Energy. The project comprises 116 wind turbines manufactured by Siemens Energy Inc. Each wind turbine will have a capacity to generate 2.3 MW bringing the total capacity to 267 MW.
This new wind farm project will be built by RES Americas Construction Inc., a renewable power developer, and would generate up to 300 jobs during construction and about 18 full-time operating positions upon completion. The transaction is expected to close in August this year and will facilitate the utility to comply with state renewable energy mandates. State standards entail the company to generate 15% of their energy from renewable resources beginning 2015.
Portland General has also clinched a non-binding agreement with the Bonneville Power Administration (BPA) to buy 1,500 MW of transmission capacity. The company has thus decided to suspend the proposed Cascade Crossing transmission project.
Upon accomplishment of the final deal with BPA, the utility says that this option will be more cost effective as well as environmentally friendly than its original proposal. Portland General will record an after tax loss of $31 million for the second quarter 2013 for costs related to its project.
Meanwhile, the company has lowered its previously disclosed full-year 2013 earnings guidance of $1.85 to $2.00 per diluted share to $1.35 to $1.50 per diluted share as a result of these negotiations.
Based in Portland, OR, Portland General Electric is a fully integrated electric utility electricity company that caters to nearly 830,000 residential, commercial and industrial customers in the state.
Portland General Electric has progressed on its strategic initiatives, including starting construction on Port Westward 2. These initiatives will help the company to enhance its production capabilities and remain competitive. In addition, the projected capital expenditure of $505 million to $525 million for the year will help in continuing development activities.
Portland General Electric Company currently retains a Zacks Rank #2 (Buy). Companies like Zacks Ranked #1 (Strong Buy) Companhia Paranaense de Energia and CPFL Energia S.A. , along with a Zacks Ranked #2 (Buy) ALLETE, Inc. (ALE - Free Report) also remain well positioned.