Klamath Falls, Ore
Hopping over a few hurdles never hurt anyone. In Klamath Falls, Ore., it helped to create a 500-megawatt cogeneration plant that provides power to residents in the West, as well as improved water quality use and a municipal revenue source.
Prior to 1996, Oregon perceived that it had a power surplus. Nevertheless, Klamath Falls recognized that relying on other power distributors made the city vulnerable. City officials decided to develop their own power generation system, and they began researching a hydro project at the Klamath River.
Unfortunately, “it became obvious that, with the winds, the project wouldn’t work,” says Jeff Ball, city manager. Consequently, the city decided instead to examine a cogeneration plant.
Beginning the project posed other challenges. At the time, “the state would permit only one facility in the entire state,” Ball says. Thus, he notes, a “beauty contest” ensued, with various communities pitching power projects in hopes that they would be chosen.
“The state was very concerned with a program that would offset CO2,” Ball says. Consequently, Klamath Falls created an extensive mitigation package and eventually won the state’s approval.
Permit in hand, the city began constructing its facility in 1996. The cogeneration plant, which officially began operating in August 2001, uses natural gas to generate electricity and industrial steam. Steam is supplied to local lumber company Collins Products to fuel its boilers. Power is sold to Seattle City Light, California’s Sacramento Municipal Utility District and Modesto Irrigation District, and PacifiCorp Power Marketing (PPM) in Portland, Ore.
PPM operates and maintains the cogeneration plant, and brokers any excess power. “Two hundred megawatts of the power are being sold on long-term projects,” Ball explains. “The remaining power is sold based on supply and demand; PPM has been doing a good job of moving market power sales.”
Cooling water that is pumped from the city’s wastewater treatment plant (WWTP) to the cogeneration plant’s cooling tower, reducing the plant’s reliance on groundwater. However, because the facility depends on the WWTP’s 2.8 million to 4.2 million gallons per day of effluent, Klamath Falls had to make a $9.4 million WWTP upgrade that included building a backup system and adding more pumps, storage, chlorination capabilities and operational flexibility. Nevertheless, more than 60 percent of the wastewater used by the cogeneration plant is evaporated, which means that the amount of wastewater discharged into the river has decreased by about 67 percent since the cogeneration plant began operating, Ball says.
Ultimately, the cogeneration plant is generating power and creating revenue without harming the environment. “A lot of communities have generating facilities but not a merchant plant,” Ball says. (Merchant plants sell wholesale power.) “And what makes it especially useful is that it helps us with effluent disposal.”
Revenues from the power sales help cover project costs, including paying off the $300 million in city revenue bonds that financed the project. Once the bonds are paid in January 2025, the plant is expected to generate up to $10 million to $15 million per year, which is more than the annual revenues generated from property taxes, Ball says. At that point, sales will:
provide tax relief by eliminating franchise fees on telephone and gas lines, and reducing city tax levies;
rebuild and expand basic city services to the community;
fund capital improvements;
provide seed money for economic initiatives for future development;
develop a community grant fund; and
fund environmental efforts, such as Oregon reforestation or solar energy projects in developing countries.
The plant was recognized by Oregon’s governor with the Sustainable Oregon Award and by Power Magazine with the 2001 Power Plant award. Looking ahead, Klamath Falls is working with PPM and the South Suburban Sanitary District to plan another merchant plant next to the existing cogeneration plant.
Agencies/companies involved: Black & Veatch, Overland Park, Kan.; Collins Products, Klamath Falls, Ore.; IMCO General Construction, Bellingham, Wash.; J.A. Jones, Charlotte, N.C.; and PacifiCorp Power Marketing, Portland, Ore.