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  For Immediate Release: 6/9/1998
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  Owners Seek Sale of Centralia Power Project
  PacifiCorp, Washington Water Power, Seattle City Light, Tacoma City Light, Snohomish County PUD, Puget Sound Power & Light, Grays Harbor County PUD, Portland General Electric

CENTRALIA, Wash., June 9, 1998 - - Management of the eight investor and publicly-owned utility partners who own the 1340 megawatt coal-fired Centralia Power Project have agreed to hire an investment advisor to pursue the possible sale of the plant and adjacent Centralia Mine.

Some of the utilities are still making recommendations to their boards of directors or, in the case of the publicly-owned utilities, to their city councils or public utility district commissioners, but it is expected that 100 percent of the ownership will participate.

If successful, the sale could close before year end pending appropriate regulatory approvals.

The sale of the plant is being considered by owners, in part, because of emerging deregulation and competition in the electricity industry. "This is a logical time for the partners to see how owning Centralia fits with their vision of the future." said Rich Woolley, Centralia Plant manager. "It is also an opportunity for another company to enter the generation business here in the West as electricity customers begin to have choice in suppliers."

A series of events during the last three years led to the decision to offer the plant for sale.

First, in 1995, the plant was ordered by regulators to reduce sulfur dioxide (SO2) emissions by 50 percent to meet new clean air standards.

Special interest groups said it wasn't enough to protect visibility and air quality and it became apparent that the order would be challenged. Owners responded early in 1996 by voluntarily negotiating with regulators to reduce SO2 emissions by 90 percent and by meeting requirements for nitrogen oxide emissions by 2003.

The Washington legislature in 1997 allowed some tax changes to help offset additional costs.

Plant closure is an option, but owners felt that by resolving environmental issues before offering the plant for sale, it would have the best chance to continue operating well into the next century.

"Now owners are weighing alternatives," said Woolley. "Even with tax changes the cost for scrubber systems is considerable. If there is market interest among other companies for owning Centralia, then new owners will make that investment."

Centralia is capable of supplying the electricity needs of a city the size of Seattle.

PacifiCorp operates the plant and owns a 47.5 percent share. Other plant owners include Washington Water Power, with 15 percent; Seattle City Light, 8 percent; Tacoma Public Utilities, 8 percent; Snohomish County PUD, 8 percent; Puget Sound Energy, 7 percent: Grays Harbor County PUD, 4 percent, and Portland General Electric with 2.5 percent. PacifiCorp also owns and operates the adjacent Centralia Mine.




 

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