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Silver state could turn energy crisis into gold mine

CARSON CITY, Nev. (AP) – The energy crunch in the West has hammered California, but could turn into a jackpot for neighboring Nevada.

The gambling state is courting energy giants, betting that future power plants based in Nevada will help its economy and provide plenty of electrical power to the region.

The power companies are responding, with proposals for Nevada plants that would supply more than 10,000 megawatts of energy by 2004.



Those proposals are among plans that would add more than 76,000 megawatts of power in the Northwest, Southwest, Rocky Mountain and California-Mexico regions, according to the California Energy Commission.

”The lack of power in California is undermining other states,” said Richard Fernandez of Duke Energy North America. ”We’re looking at the West as a whole as needing additional generation.”



Duke is proposing a plant near Las Vegas big enough to supply about a million homes with energy and another plant near Reno about half that size. Both are expected to be finished in two years.

One megawatt is about enough to power 750 to 1,000 homes, which means the proposed Nevada plants would generate power for up to about 10 million homes.

Some of the proposals probably will fizzle, according to industry experts. But the state’s population is only about 2 million, and Nevada utilities already supply about half the power the state uses.

”We’re definitely going to be building more plants than our current rate of growth can accommodate,” said Senate Commerce and Labor Chairman Randolph Townsend, R-Reno. ”But because plants are so large and so expensive, economies of scale are important, and you have to build more than you’re going to use internally.”

Nevada is lucky, when you consider that in 1999 state lawmakers passed a deregulation plan similar to California’s.

The main difference: Under Nevada’s law, Gov. Kenny Guinn could stall deregulation. That’s what the former utility executive did as California’s energy woes developed.

”Nobody realized that was going to be the saving grace,” said Senate Minority Leader Dina Titus, D-Las Vegas.

Lawmakers followed up this year by passing a law repealing deregulation and halting sales of Nevada power plants to unregulated power companies. The bill also bailed out Nevada utilities with a new accounting system that lets them pass along fuel and purchased-power costs to customers.

The new law, signed by Guinn in April, eases the impact on consumers by averaging electricity costs to level out seasonal peaks and lows over three years.

With Nevada’s immediate energy problems apparently resolved, politicians stepped up efforts to promote the state’s low-tax status and to reduce the time usually needed to get water permits for power plants.

”Hearings before the state water engineer can go on for months, if not years,” Duke lobbyist Bob Campbell said. ”And Gov. Guinn saw the urgency of the situation and talked to certain parties to get those handled as expeditiously as possible.”

Campbell said federal permits can be difficult, especially in a state like Nevada where 87 percent of the land is in federal hands.

But as part of President Bush’s new energy plan, agencies have been told to speed up their permit process to keep energy projects moving.

Legislative efforts include Titus’ SB362, nearing final approval, that lets various local and state agencies act simultaneously on permits for power plants, transmission lines and other related facilities.

”This bill does not shorten the period for comments from the public or for notice of any part of the permitting process,” Titus said. ”The other thing it doesn’t do, which is very important to me, is weaken any environmental regulations.”

Also nearing approval is AB661,a bet-hedging proposal that lets Nevada’s casinos, mines and other major power consumers sidestep the deregulation delay and seek power on the open market.

Legislators last week sent Guinn SB372, which incrementally increases the amount of renewable energy that Nevada utilities must buy from the current 1 percent to 15 percent of their total energy portfolio.

Also sent to Guinn was SB273, which exempts people from paying local sales and school support taxes on any products used to generate power by wind, geothermal, solar or biomass energy.

The governor also got SB227, giving a partial property-tax exemption to facilities that generate electricity from recycled materials.

Despite the green-energy measures, some environmentalists are uneasy with the state’s haste to build power plants.

John Hadder of Citizen Alert said legislators should be doing more to encourage energy conservation, which can reduce energy bills by up to 40 percent without lifestyle changes.

Hadder also says more planning is needed to take advantage of renewable energy sources such as Nevada’s plentiful sun and wind.

Unlike natural-gas fired plants, he said renewable facilities are decentralized and need a new system of transmission lines.

”That’s where the longer-term planning is required,” Hadder said. ”We don’t have the infrastructure to use renewables on a large scale at this point.”


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