For nearly two years, the City of Portland has been in contract negotiations with a local power company, PPM, to provide all of the city’s municipal energy through wind power. The deal will make Portland the first city in the country to use all renewable energy for the government’s power needs–but not unless the two sides can agree on the contract’s terms, something that seems decreasingly likely as the days stretch on.
“It’s a complicated issue, and we’re on the cutting edge,” says Shannon Callahan, a staffer in City Commissioner Dan Saltzman’s office, which is heading up the green energy push. Holding up the negotiations are disputes about pricing, who is financially responsible if the wind system fails, and how much it will cost the city to have guaranteed power.
Further complicating the talks is the fact that, since the city accepted PPM’s bid, the company has twice been bought out by overseas power companies– ScottishPower and Spanish firm Iberdrola. Each change in ownership has required the city to reconsider the risks associated with the deal–for instance, whether the parent company would be able to bail out PPM if it went belly up.
But the biggest hang-up so far is that PPM hasn’t delivered terms that the city–through Saltzman’s office, the Office of Sustainable Development, and the Office of Management and Finance–can agree to. Now, the city may be ready to walk away from the deal, scrapping the talks and launching a new Request for Proposals from wind power companies.
“We’re giving them until the end of February,” says Saltzman. “I’m hopeful that we’ll reach an agreement by then, or we’ll go out for another bid.”
Doing so could mean yet another delay in Portland getting wind energy, but it could ultimately be far better for the city. This year, the state legislature will be considering a statewide standard for renewable energy–if it passes, it could create a large market for green energy, meaning there will be more companies for the city to choose from.
Plus, it’s entirely likely that Multnomah County could get involved in a new bid–Saltzman’s former chief of staff, Jeff Cogen, who headed up the original talks, has just been sworn in as a county commissioner. That would potentially lower the cost through the power of “bulk purchasing.”
“We haven’t given up [on PPM] yet, despite my frustrations,” Saltzman says. We’re still negotiating in good faith.” PPM says it is “not in a position to discuss the transaction.”
By Scott Moore
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