PSD Puget Energy New

Puget Sound Energy [utility subsidiary of Puget Energy (NYSE:PSD)] last week completed the $240 million purchase of a 310-megawatt natural gas-fired power plant in Longview, Wash., the latest step in the utility�s long-range effort to ensure a reliable, cost-effective energy supply for its growing customer base in Western Washington. PSE signed an agreement in September to buy the 11-month-old �Mint Farm� power-generating facility from Minnesota-based Wayzata Opportunities Fund, LLC. A November approval of the transaction by the Federal Energy Regulatory Commission cleared the way for PSE to complete the purchase on Dec. 5, using previously secured bank financing. �Our long-term strategy for procuring the new resources our customers require focuses first on boosting energy efficiency and then on adding more renewable power supplies,� said Kimberly Harris, executive vice president and chief resource officer for PSE. �The third leg of the stool rests largely on clean-burning, readily dispatchable natural gas-fired power generation that facilities like Mint Farm can provide.� The Longview facility employs �combined-cycle� technology that allows it to generate electricity using both a natural gas cycle and, from the power-generating turbine�s exhaust heat, a steam cycle. The process boosts operating efficiency, lowers fuel costs, and cuts air emissions. PSE intends to retain appropriate staff currently operating Mint Farm. �The City of Longview is very excited to welcome PSE into our community,� said Bob Gregory, City of Longview manager. �The utility�s purchase of the project will provide long-term viability of this commercial power-generating facility, as well as a stable, long-term capital investment in the Mint Farm Industrial Park. PSE is a financially sound energy utility that will help the city fulfill its objective of recruiting economic development that diversifies our tax base and supports a sustainable financial foundation for our community.� The population within PSE�s Puget Sound service area is predicted to grow by more than 1 million over the next 20 years. That growth, together with the expiration of some large purchased-power contracts in coming years, requires that PSE obtain approximately 4,400 MW � more than double the peak power load of a city the size of Seattle � of additional power capacity by 2027 through energy efficiency and supply-side resources. With the addition of Mint Farm, PSE has obtained more than 1,600 MW of long-term resources over the past three years. These include PSE�s development of two large wind-power facilities in Eastern Washington � Hopkins Ridge (157 MW) and Wild Horse (229 MW) � and the purchase of two other natural gas-fired power plants in the state, Goldendale (277 MW) and Sumas (125 MW). Also included is 50 MW of wind energy purchased from the Klondike III facility in north-central Oregon, and a long-term power-purchase contract for nearly 500 MW of hydropower from the Chelan County Public Utility District. PSE also has constructed the Northwest�s largest solar-power generating facility, a 500-kilowatt demonstration project located at PSE�s Wild Horse Wind and Solar Facility near Ellensburg. Under PSE�s resource-acquisition strategy, the company issued a request for proposals in January 2008 seeking up to 1,340 MW of new power-supply resources by 2015. Out of 30-plus submitted bids, the Mint Farm purchase was among PSE�s four short-listed targets for new power resources. The short list also includes two planned 20-year power purchases from wind facilities in Washington and Oregon, together having 250 MW of power-generating capability, and a short-term, winter-only power purchase that PSE recently executed to help erase a projected near-term power-supply shortfall�during�customers� wintertime peaks in�power usage. PSE will be updating its Integrated Resource Plan in 2009. The 20-year plan serves as a guide for the utility�s energy-supply strategy. For more information about PSE�s power-generation facilities, please visit PSE.com. About Puget Sound Energy Washington state�s oldest and largest energy utility, with a 6,000-square-mile service territory stretching across 11 counties, Puget Sound Energy serves more than 1 million electric customers and nearly 750,000 natural gas customers. PSE meets the energy needs of its growing customer base through incremental, cost-effective energy conservation, low-cost procurement of sustainable energy resources, and far-sighted investment in the energy-delivery infrastructure. For more information, visit PSE.com.