Legal & Regulatory

PGE Takes Over Power Plant Construction After Abengoa Filing

Portland General Electric (PGE) assumed engineering, procurement, and construction (EPC) responsibility for the Carty Generating Station on Dec. 18, following the original EPC contractor’s default on its construction agreement.

Construction began on the Carty plant on Jan. 9, 2014. It is being built in Oregon next to PGE’s existing Boardman Plant, which is scheduled for retirement by the end of 2020. The new 441-MW combined cycle plant will utilize a Mitsubishi 501 GAC (air-cooled) combustion turbine supplied by Mitsubishi Hitachi Power Systems America.

PGE said that it selected Abeinsa, an affiliate of Abengoa S.A., as the EPC contractor after a rigorous competitive bidding process. However, Seville, Spain–based Abengoa filed for preliminary creditor protection on Nov. 25, 2015, which is considered the first step in what could result in Spain’s largest-ever corporate bankruptcy. According to Spanish law, the preliminary creditor protection request gives Abengoa four months to suspend debt payments while it negotiates with its creditors.

Although the EPC contractor for the project is commonly referred to as Abeinsa, a number of affiliated companies are party to the contract. The companies include Abeinsa EPC LLC, Abener Engineering and Construction Services LLC, Teyma Construction USA LLC, and Abeinsa Abener Teyma General Partnership. Abeinsa also hired Sargent & Lundy as its design engineer. On Dec. 14, Abeinsa ceased construction activities on the project.

“We’ve been monitoring progress at Carty carefully throughout the project,” said Jim Piro, president and CEO of PGE. “The plant is in an advanced state of construction, with all major components on site and installed or being installed.”

The Carty power plant is estimated to be about 75% complete, and was expected to be online in the second quarter 2016 at a cost of about $514 million. PGE said initial work has begun to prepare the site for construction to resume, but it is building a group of engineering companies and contractors to establish a new construction management team and update work plans before putting crews back to work. PGE’s own team of onsite project managers and engineers will continue to monitor progress at the site, focusing on continuity, quality, safety, and timely project completion.

“Our responsibility to our customers and our investors requires us to step in now and assume control so construction can get back underway,” Piro said.

Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)

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