Portland General Electric Company 121 SW Salmon Street. Port/and, Oregon 97204 PortlandGeneral,com



### October 22, 2010

Mr. Dick Pedersen Executive Director Oregon DepartmentofEnvironmental Quality 811 SW 6th 

### Avenue Portland, OR 97204

Dear Mr. Pedersen:
Please accept the attached letter from Mr. Jim Lobdell, Vice President ofPower Operations and Resource Strategy at Portland General Electric to Mr. Bob Jenks, the Executive Director ofthe Citizens' Utility Board ofOregon regarding the Boardman Best Available Retrofit Technology ("BART") rulemaking. PGE hereby requests thatyou, in your role as Director of the Department ofEnvironmental Quality ("DEQ") and representative ofthe Oregon Environmental Quality Commission (ttEQC"), re-open the Regional Haze BestAvailable Retrofit Technology ("BART") rulemaking record to include this letter. This letteris to be read in conjunction with a Jetter from a number ofenvironmental groups to Mr. Jim Lobdell ofPGE dated October 22, 2010.
Thankyou fot 

### consideringthis request. Sincerely,

Dave Robertson Vice President, Public Policy' 

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# "**~** Portland General Electric Company James F. Lobdell 121 SWSalmon St,'eet • Port/and, Oregon 97204 Viet President**~ ~** **~ ~~**  _ _ _ __ _ _**_~503)** 464:-2723 • Facsimile (503) 464-2222 PQWer Operations andReslJUrce Strategy**:::,'~**__:

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# ~ October 22, 2010

.

Mr. Bob Jenks Executive Director Citizens' Utility Board ofOregon 610 SWBroadway, Suite 308 Portland, OR 97205

RE: PGE Boardman replacement resource planning process.
Dear Mr. Jenks:
Portland General Electric Company ("PGE") has been working with certain members ofthe public interest community (including to date, the Citizens' Utility Board ("CUB"), the Renewable Northwest Project, Angus Duncan, Oregon Environmental Council, and the NWEnergy Coalition (the "Group")) to discuss PGE's public commitment to construct Boardman candidate replacementresource portfolio options to be considered in the Oregon Public Utility Commission's ("OPUC") Integrated Resource Planning process related to the cessation of Boardman coal-fired operations. The Group and PGE have also been discussing the Group's support for ceasing coal-frred operations at Boardman no later than December. 31,2020 as part of a comprehensive plan, as further described in the Group's letter from Bob Jenks ofCUB to Jim Lobdell ofPGE dated October 22,2010 (the "Group Letter"). This letter represents PGE's understanding ofits role withrespect to these discussions.
Within the context ofthe Integrated Resource Planning Process ("IRP") and the guidelines adopted for that process by the OPUC, and in consideration ofthe Group's support as described in the Group Letter, and contingent upon EQC approval ofBART 

### ill or a plan that is substantially similar to BART TIl and acceptable to PGE, PGE will:

,. Lead an effort in its next lRP to develop a limited number of carbonreduction candidate resource portfolio options to meet anticipated utilityresource requirements including the replacement ofBoardman coal generation and designed to achieve the best combination ofexpected costs and associated risks and uncertainties for PGE and its customers and also reduce the carbon footprint ofthe company's resource portfolio over time ("C02 reduction portfolios"). Suchportfolios will be evaluated against other constructed resource portfolios developed during the IRP process.

.. Define CO2 reduction portfolios as prospective supply and demand side resource options that are teclmically feasible and commercially available during the lRP planningperiod that could potentially be candidates for reducing portfolio carbon emissions and meet forecasted energy and capacity defici'ts related to the cessation ofBoardman coal-fired operations and otherresource requirements.

_

.. Design in consultation with the Group the CO2reduction portfolios to meet specific CO2 reduction targets to be defined by the Group.

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Portland General Electric

• Allocate sufficient funding, not to exceed$50,000 without PGE's prior approval, to be made available on a one-time basis for the sole purpose ofsecuring technical consulting assistance services (to be selectedjointlyby PGE and the Group) to assist with development and evaluation ofthe potential candidateresource portfolios for Boardman

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... during the next IRP process.

o Invite all m..p stakeholders, including OPUC and ODOE staffto the workshops. • Affirm publicly that the process described above represents a commitment by PGE to use its best efforts to develop and evaluate carbon emission reduction portfolios that support Oregon's efforts to reduce greenhouse gas emissions while operating within the OPUC's least-costlleast-riskparadigm. • Supportthe elimination ofthe DEQ BART Rule that now allows for continued coal-flred operations at Boardman through 2040, or the end ofits economic life, upon occurrence of all ofthe following: (1) a revised Boardman BART/Reasonable Progress rule acceptable to PGE has been adopted by EQC; (2) such Boardman BART/Reasonable Progress rule has been included in Oregon's State Implementation Plan (SIP); and (3) the Boardman BART/Reasonable Progress portion ofthe Oregon SIP has been finally approved by the Environmental Protection Agency and becomes binding on Boardman. Until such flnal approval by EPA ofthe Boardman BARTlReaS0118.ble Progress portion ofthe Oregon SIP, PGE is free to advocate for a 2040 backstop option should EQC and EPA not approve a BART rule that is acceptable to the company.

PGE 

### will comment, consistent with the content ofthis letter and the Group Letter, in other public venues, including print and broadcast media strongly In favor ofthis process, including coauthorship with the Group ofajoint opinion editorial speaking to the importance ofthese efforts to cease coal-fired operations at Boardman, and the repll,l.cement resource process that all parties hope will enable PGE's transition to a lower carbon least-costresource portfolio, to be filed with the Oregonian and other relevant news outlets prior to the EQC decision on this matter. PGE understands that nothing in this document will require the company to t!J.ke any action that is in conflict with the OPUC's IRP Guidelines and process.

Thankyou for taking the time to engage 

### in these discussions. Sincerely,

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