Portland Energy's goal is to replace individual air conditioning units in office buildings at the north end of the Downtown core. At build out, those involved say it would be a $15 million plant capable of cooling six million sf of commercial space. Right now, the firm is 90% done with the first phase, but it needs another $2 million soon to complete the $6.4 million first phase before users begin occupying the new building next month.
The need for the money coincides with the collapse of Enron, the parent company to both Portland Energy and PGE. PGE says it needs to lend the money because there's not enough time for Portland Energy to arrange outside financing. PGE first broached the subject with the PUC in late January, according to the agency's Web site. A source at the PUC tells GlobeSt.com the commission may consider PGE's request at its regularly-scheduled public meeting on March 21.
Scott Eaton, leasing director for Brewery Blocks developer Gerding Edlen Development Co., was not immediately available for comment on the firm's back up plan to service its tenants in the five-block, 1.7-million-sf development. Portland Energy Solutions General Manager Gary Heikkinen told GlobeSt.com last summer that the company got its break thanks to Gerding Edlen and its Brewery Blocks Development, and that the potential for success is great.
"Most of the larger buildings in downtown Portland have older chilled water equipment in them and simply hooking up to our system is a low cost alternative to property owners replacing, operating and maintaining their own systems," Heikkinen told GlobeSt.com, estimating that a 300,000-sf office building could avoid between $500,000 and $1 million in up front costs by connecting to Puget Energy Solutions air conditioning plant rather than upgrading their own system. After that, says Heikkinen, the cost of service--between 50 cents and $1 per sf per year, depending on the size of the building--is comparable to a building owner operating and maintaining its own independent system.
The first phase of Portland Energy's project includes two 30-foot-tall water cooling towers on the roof of Block 1 and a system of distribution pipelines that run throughout the three-level, two-and-a-half block underground parking garage that will service the redevelopment. The air conditioning plant will be powered by electricity, says Heikkinen, but because of its size, when operating close to capacity, it will be much more efficient than if each of the buildings it services powered its own chilling system.
A few dozen cities in North America are said to have district-wide cooling systems operating or in the works. The PES system will be the first in the Northwest. If all goes as planned, Heikkinen says the first extension of the distribution lines beyond Gerding Edlen's project will be across Burnside Street and then down Southeast Stark Street to Sixth Avenue. More rooftop chillers -- up to eight -- would be added to handle the increased business.
"We are still in the final design stages of the Stark extension, but we already have some contracts in hand," said Heikkinen last summer, acknowledging that PES is already searching for a second plant location on the south end of Downtown. Heikkinen also said his company would love to get in on the ground floor of any redevelopment effort along North Macadam, if and when it ever comes to fruition.
An article about PGE's loan request in the Oregonian contained information on the financial condition of Portland Energy. It attributed the information to PGE's filing with the PUC. A source at the PUC says it did not give out that information and that the information is supposed to be kept confidential. He did not challenge the accuracy of the figures themselves, however, which show the company losing $221,000 on sales of $241,000 during 2002, and project it losing another $203,000 in 2003 on sales of $532,000.
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