PGE announces its largest-ever renewable wind power purchase to help meet future energy needs of PGE customers

Portland, Ore. — Portland General Electric (PGE) today announced a 30-year agreement with PPM Energy to purchase 75 megawatts (MW) of wind capacity to serve PGE customers beginning in December 2005. Through this agreement, PGE will purchase all of the output of PPM Energy’s Klondike II Expansion Wind Project located near Wasco, Ore. The agreement marks a significant outcome from PGE’s 2002 Integrated Resource Plan (IRP) and the first major step toward meeting the company’s renewable power supply goals under that plan.

"We are pleased to be delivering more renewable energy to our customers at an affordable price and we trust PPM Energy’s record as a reliable and responsible power supplier," said Jim Lobdell, PGE’s vice president of power operations and resource strategy. "Increasing supply diversity and adding more renewable energy to our supply portfolio were two of the goals in our IRP, and this moves us closer to meeting those goals."

Lobdell also noted that the agreement is particularly attractive because PPM Energy included "firming, shaping and delivery services" for the renewable wind energy. These additional services provided by PPM will transform the naturally intermittent wind energy into reliable, predetermined blocks of power that are easier for PGE to integrate into its larger supply portfolio.

"We are delighted to work with PGE to bring online this great wind resource that is well situated to serve PGE’s requirements," said Terry Hudgens, CEO of PPM. "With no fuel costs, wind power provides a hedge against fuel price volatility as well as an environmentally responsible energy choice."

PGE will continue to pursue other renewable strategies as it seeks to meet the approximately 200 MW (65 average MW) target outlined in the company’s IRP. To that end, PGE has been an active leader in securing an extension to the federal production tax credit for renewable power producers. This helps suppliers such as PPM Energy reduce the price of their renewable power offerings so that they are more competitive with the pricing from traditional energy sources.

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PGE also is second in the nation for electric utility renewable energy sales via its renewable power sign-up program, through which customers can elect to have more renewable energy delivered to the electrical grid than the standard mix.

Other PGE Resource Actions Already Underway

In its most recent IRP, PGE identified a need for additional future resources of 773 average megawatts of energy plus an additional 955 megawatts for meeting seasonal peaking capacity beginning in the fall of 2006. The identified need was based, in part, on an analysis that PGE customer demand for energy will increase by about 2.5 percent a year though 2007, as well as an assumption that a contract for 258 megawatts of power from the Bonneville Power Administration will expire after 2006. Following is a brief summary of the key PGE resource strategies from the IRP:

Sustainable measures will help meet energy needs. Because PGE has planned for upgrades of existing PGE power plants, energy efficiency measures and acquisition of newly developed renewable energy, approximately 50 percent of PGE’s forecasted load growth between 2004 and 2007 can be met through sustainable measures instead of new resources dependent on additional fossil fuels.

Mid- to long-term power contracts solicited through bidding process. In order to get the best prices for customers from the best mix of resources, PGE issued a far-reaching request for proposals (RFP) to the energy industry and received an overwhelming response from more than 40 parties who submitted more than 100 separate bids covering various technologies. With help from an independent observer to oversee the process, PGE selected a short list of bidders and began negotiations for supply agreements. Most of the targeted supplier agreements from the RFP have been completed, negotiations on others continue.

Development of the first major PGE power plant in a decade. The PGE Port Westward natural gas-fired power plant near Clatskanie, Ore. will bring about 400 megawatts of new supply online by May 2007. PGE purchased a super-efficient turbine, making this plant the most efficient utility unit of its kind in the Northwest and one of the most efficient in the West. Construction begins in January 2005.

PGE, headquartered in Portland, is a fully integrated electric utility that serves more than 755,000 residential, commercial and industrial customers in Oregon.

PPM Energy is a unit of ScottishPower (NYSE: SPI) and has a portfolio of more than 830 MW of wind power currently in operation in seven states. PPM has a goal of bringing 2,300 MW of new wind power to market by 2010. The U.S. Environmental Protection Agency, the U.S. Department of Energy, and the Center for Resource Solutions honored PPM in October for significantly advancing development of the green power market.

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