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PORTLAND-There’s not that too many tenants to cool at the moment, but Portland Energy Systems has overcome financing questions and completed the first phase of a planned $15 million plant capable of cooling six million sf of commercial space.

PES General Manager Gary Heikkinen tells GlobeSt.com the system, as it stands, is capable of cooling 1.7 million sf, which not coincidentally is the ultimate size of Gerding Edlen’s redevelopment of the five-block former Blitz Weinhard Brewery on the northwest edge of Downtown Portland.

That’s a big step from February, when the Enron subsidiary had only one small chiller up and running and not enough money to add install the two larger ones. In April, however, fellow Enron subsidiary Portland General Electric, from which PES was spun out last year, won approval from the Oregon Public Utility Commission to make a $2-million loan and keep the company on track.

“As you can imagine, because we have a substantial amount of capital invested up front and the customers are going to be phased in, our income is not instantly going to cover our costs so we need to draw down on that line of credit,” says Heikkinen. “We don’t expect to use it all, but it certainly allows us to be sure we can pay our bills for a while.”

The term of the loan is about one year, says Heikkinen, which should get the operation through to April 2003. Beyond that, he says, there are provisions that allow the possible extension of the loan with PUC approval, “but we hope not to have to do that.”

The $6.4-million first phase of the PES project included 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 services the five-block redevelopment. The air conditioning plant is powered by electricity, says Heikkinen, but because of its size, when operating close to capacity, it is much more efficient than if each of the buildings it services powered its own chilling system.

That ultimate efficiency is why Heikkinen and crew eventually want to serve more than just the Brewery Blocks. “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 last year.

Heikkinen estimates 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, but without the added maintenance costs.

Only a few dozen cities in North America are said to have district-wide cooling systems operating or in the works. The PES system would 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.

As well, Heikkinen says PES is keeping an eye out for a second plant location on the south end of Downtown. Indeed, Heikkinen says PES would love to get in on the ground floor of any North Macadam-area redevelopment, if and when it ever comes to fruition.

“But the truth is we need to get ownership issues squared away around here before we can seriously think about expanding beyond the Brewery Blocks,” says Heikkinen. “Somebody needs to buy PGE or something else needs to happen to get us out from underneath the cloud of Enron.”

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