An energy developer based in New York wants to build two natural-gas-fired power plants -- with the option for a third -- on the site of the old

in Troutdale.

The site is about a mile from the boundary of the

and the potential impact of the plants' emissions on air quality in the gorge is sure to make the proposal controversial.

The

will compete with other proposals to satisfy energy needs of

s 800,000 customers. Its backers say the plant will not only meet emissions limits, but eliminate the need for expensive transmission upgrades that ratepayers would otherwise be stuck paying for.

PGE is looking to fill some big holes in its generation portfolio. Among other things, the utility's latest resource plan calls for a new baseload gas plant to meet day-to-day demand, as well as a flexible unit that could be cycled up and down to meet peak demand or back up the intermittent output of wind farms in the gorge.

Regulators have already acknowledged that need, and told PGE in late September to bundle both plants and solicit competing proposals to supply the power. PGE will offer its own benchmark proposal to meet those needs, including a new gas plant in Boardman and a flexible resource at its Port Westward plant in Clatskanie. The Clatskanie plant requires a major transmission upgrade from the plant into the Portland metro area.

PGE may also be looking for a second baseload plant eventually to replace the output of its existing coal-fired power plant in Boardman, which it has agreed to close by 2020. The utility has also proposed a 210-mile cross-Cascades transmission line that could cost up to $1 billion to ship wind and other energy from Boardman to near Salem.

Utilities generally prefer to locate power plants close to demand centers to minimize long transmission runs and the line losses that occur over those distances.

But with the luxury of the regional transmission system built to serve federal hydroelectric projects, most plants in the Northwest are a longway from their customer base. The regional grid is increasingly bottlenecked however, which has caused big problems moving wind and hydropower.

Backers of the $850 million Troutdale proposal, the New York-based Development Partners, say the site is tailor made.

Not only does it sit on existing industrial land in metro Portland but also a major gas supply line runs adjacent to the parcel. Troutdale’s nearby water treatment plant would provide cooling water. And the PGE substation to move the energy into the distribution system is about 1 mile away, requiring only a small extension.

"From a siting standpoint, it has everything we want," said Bob Howard, Director of Development Partners, which builds and operates power plants around the country.

Howard suggested that building the plants in Troutdale would eliminate the need for PGE's transmission upgrade north of Portland, and might even reduce the need for PGE's $1 billion cross-Cascades line. PGE dismissed the latter, saying it already had requests in hand for more capacity than the line offers.

Either way, the Troutdale location is not likely to prove popular with conservation groups. The national scenic act requires protection of air quality in an area that extends both within and outside its boundaries. PGE is closing the Boardman coal plant because the expense to upgrade it to meet stricter air quality standards was prohibitive. While coal plants emissions are far worse, natural gas plants still emit nitrogen oxides that cause haze and acid deposition.

The emissions impact from the Troutdale plant would occur in the summer, when a funneling effect sucks air from west to east. Boardman, located on the other side of the Cascades, impacts air quality in the winter and spring, when prevailing winds are in the opposite direction and inversions trap air in the gorge and on the flanks of Mt. Hood.

"We'll be taking a very close look at the proposal, its emissions, its likely impact on air quality and its compliance with laws that protect the Gorge, human health and the environment," said Michael Lang, conservation director of the Friends of the Columbia Gorge.

Howard acknowledged potential air quality impacts. But he said the plant would be state of the art, and he was confident it would comply with ever-stricter emissions standards.

The plant would be located in a vacant tract adjacent to the Federal Express hubthat is owned by the Port of Portland. Kenneth Anderton, the Port's program manager for the business park, said the site is a tough to develop because of the groundwater remediation still taking place from fluoride contamination from the aluminum smelter.

"This use is ideal in terms of trying to minimize the impact on the wetlands and our mitigation efforts," he said.

Troutdale Mayor Jim Kight said Friday that he was enthused about the potential for 25 to 35 well-paid jobs, in addition to the construction crews that would be required.

The site is located in an Enterprise Zone, which provides a three-year hiatus from property taxes. But Kight said the developers would likely apply for tax breaks under the state's strategic investment partnership, which restricts the taxable value at a very low level over 15 years.

PGE has already sought and received SIP approval from Morrow and Columbia counties to make its own proposal more competitive.

The utility is pushing hard to win its own bid, giving its shareholders the opportunity to make profitable investments in new plans themselves. It has faced criticism in the past for allegedly stacking the bid process in favor of its own. An independent evaluator will score the proposals when they are submitted, potentially this winter or spring.

"I think PGE is facing a real run for the money," said Bob Kahn, director of the Northwest & Intermountain Power Producers Coalition. "It's a very competitive proposal on the face of it, which is what our industry is supposed do."

To meet PGEs needs, developers would aim to have the smaller plant online in late 2014 and the larger online in 2015.

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