Portland General Electric, Sierra Club, other environmental groups agree to settle lawsuit over alleged Clean Air Act violations at coal-fired Boardman Power Plant; PGE to provide US$2.5M for environmental projects, pay US$1M to reimburse plaintiffs

PORTLAND, Oregon , July 19, 2011 () – Portland General Electric Company (NYSE:POR - News) today reported progress implementing its 2020 plan for the Boardman Power Plant. Under the plan, PGE is installing a suite of controls to significantly reduce emissions from the plant, and has agreed to end the use of coal there by the end of 2020. The plan was adopted by state regulators last year.

“We are making significant progress toward implementing our Boardman 2020 plan,” PGE President and CEO Jim Piro said. “We’ve started installation of new emissions control equipment, and we’re on track to address remaining regulatory and legal concerns.”

EPA approves state haze reduction plan

The U.S. Environmental Protection Agency has approved the portions of Oregon’s state implementation plan for regional haze that pertain to the Boardman 2020 plan. EPA approval of the plan was published in the Federal Register July 5, and was the final regulatory step in certifying that the 2020 strategy complies with Clean Air Act requirements for regional haze.

PGE installs initial emissions control retrofits

PGE installed the first of the planned emissions control retrofits this spring, including controls that are expected to filter out 90 percent of the plant’s mercury emissions. PGE also replaced the plant’s burners, which are expected to reduce nitrogen oxide emissions by more than 50 percent. This fall, PGE will begin testing a dry sorbent injection system that is expected to reduce permitted emissions of sulfur dioxide 67 percent by 2014 and 75 percent by 2018.

PGE and Sierra Club agree to settle lawsuit

This week, PGE, the Sierra Club, and other environmental groups lodged a consent decree with the U.S. District Court in Portland to resolve allegations of Clean Air Act violations at the plant. The consent decree, which settles a suit filed by the environmental groups in 2008, requires approval by the court following a 45-day review period by the EPA and the U.S. Department of Justice. PGE contested the allegations while working with the plaintiffs to resolve the matter without further litigation. The decree specifies certain caps in permitted sulfur dioxide emissions from the Boardman Plant during its remaining coal-fired operation, which PGE expects to meet within the framework of the 2020 plan, and would allow for continued operation of the plant through the end of 2020. In addition, PGE and its Boardman Plant co-owners will provide $2.5 million to the Oregon Community Foundation for environmental projects in the Columbia Gorge area and northeastern Oregon, and pay $1 million to reimburse the plaintiffs for legal expenses.

“We work closely with our state and federal regulators as part of our commitment to comply with applicable statutes, permits and regulations,” Piro said. “While we believe we have strong defenses against the claims, we think it’s time to put the lawsuit behind us, and we’re pleased the funds we provide to the Oregon Community Foundation will add to the environmental benefits the 2020 plan offers Oregon.”

EPA proposes new “MACT” standards for generating units

The EPA has proposed new emissions standards for coal- and oil-fired electric plants known as the MACT rule – for maximum achievable control technology. PGE and other stakeholders are offering comments to the EPA on its draft standards. The comment period ends August 4.

“We believe the Boardman 2020 plan represents the best approach to compliance with the intent of the new federal rules,” Piro said. “Now, we’re asking the EPA to include in the final rules flexibility to accommodate innovative solutions like ours that result in significant emissions reductions and an enforceable end to coal burning years ahead of schedule.”

PGE operates the Boardman Plant and owns 65 percent of it. The other owners are Bank of America Leasing LLC, 15 percent; Idaho Power Company, 10 percent; and Power Resources Cooperative, 10 percent.

About Portland General Electric Company

Portland General Electric, headquartered in Portland, Ore., is a vertically-integrated electric utility that serves more than 821,000 residential, commercial and industrial customers in Oregon. Visit our Web site at www.PortlandGeneral.com.

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