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September 17, 2014

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NV Energy to decommission coal plants, shift to gas and renewables

Image

Sam Morris

The coal-fired Reid Gardner Generating Station near Moapa is shown April 5, 2007. The spots near the smokestacks are “ghost” reflections of the lights on the plant, which can occur in digital cameras while shooting a point light source.

Reid-Gardner Generating Plant

Reid Gardner Station, a coal fired power plant in Moapa, is shown on Friday, Dec. 7, 2007. Sierra Pacific was fined a million dollars and required to install $85 million worth of new pollution control technology at the plant. Launch slideshow »

NV Energy will roll out a major policy initiative Wednesday, announcing that it will shutter its coal-fired plants, increase investment in renewable energy and create thousands of construction jobs over the next 12 years.

Under the plan, Nevada’s coal plants would begin closing by the end of next year, and the company would accelerate investment in wind, solar, geothermal and natural gas to replace the coal energy going offline. The company estimates the plan could result in a nearly 4 percent increase in rates over the next 20 years, and the proposed legislation would limit the Public Utilities Commission's ability to approve the increases.

The utility plans to unveil the proposal it’s calling “NVision” on Wednesday at the Legislature as an amendment to Senate Bill 123.

“This does three things: it retires coal from Nevada, builds renewables, and it creates jobs,” said Tony Sanchez, NV Energy senior vice president.

The amendment calls for the accelerated closing of three of the four units at Reid Gardner, the controversial 553 megawatt coal plant in Moapa, by 2014. It leaves the fourth unit operating until 2017, after which the utility would have no coal plants operating in Southern Nevada.

U.S. Sen. Harry Reid, D-Nev., has relentlessly called for the closing of the plant, most recently during an address to the Nevada Legislature last month.

(Under the plan, the utility would not divest from its share of ownership in the Navajo and Valmy coal plants until 2017 and 2025, respectively.)

A state legislator familiar with the proposed amendment said NV Energy’s plan could position Nevada as a leader in renewable energy development in the wake of its divestment from coal.

“I applaud the utility in having the foresight and the courage to try to answer the questions about the future of coal in Nevada and their willingness to recognize that coal needs to be exiting stage left,” said Assemblyman David Bobzien, D-Reno, who chairs the Assembly Commerce and Labor Committee that could hear the bill if it passes the Senate.

Bobzien tempered his praise of the proposal with a cautionary note that legislators still need time to investigate the plan to see how the Legislature can achieve the goals of getting Nevada out of the coal business and firmly into the renewable energy business without adversely affecting industry and consumer interests.

“In the coming weeks the Legislature is going to have some questions about how we get there so that it’s done in a way that’s going to be predictable and stable for ratepayers,” he said.

In place of coal, NV Energy wants to invest in a 60-40 split of natural gas and renewables.

NV Energy would construct, acquire or contract for 600 megawatts of renewable energy in Nevada during the next five years.

The bill mandates that the utility own or operate 25 percent of that renewable energy.

This would be the first time the utility would own and operate renewable energy power plants, Sanchez said.

The company would also construct or acquire and own 1,000 megawatts of natural gas during the next five years and 1,000 more megawatts in the next 10 years with both construction or acquisition intended to be in-state.

The amendment also calls for the construction of natural gas pipelines and transmission lines to hook the new power plants into the grid.

The construction projects would bring about 4,700 construction jobs to Nevada and would result in about 200 permanent operations and maintenance jobs at the facilities.

NV Energy said it does not anticipate any layoffs from Reid Gardner because employees will be involved in ramping down the plant and could transition to new jobs at new facilities, said Rob Stillwell, spokesman for NV Energy.

All this comes at a cost to the ratepayer.

“NVision has an estimated compound annual growth rate in electricity prices of 1.65 percent, which includes the effects of inflation,” according to an NV Energy statement released to the Las Vegas Sun on Tuesday.

The utility’s amendment would call for the Public Utilities Commission of Nevada to review the plan upon legislative approval. The commission would have 210 days to review the plan, considering among other things that the cost is “just and reasonable in light of the elements of the plan,” according to a copy of the amendment obtained by the Las Vegas Sun.

The commission does not appear to have the ability to reject the plan; the amendment instructs the commission to “approve or modify” the utility’s proposal.

The utility would also charge ratepayers to recover all “just and reasonable” costs of renewable energy construction, maintenance, and operation.

NV Energy would also be able to recover costs for closing coal plants, including charging for unused coal inventory, contract termination, and decommissioning and remediation costs.

Such rate hikes would automatically begin on the first day of the next financial quarter after they were enacted.

The Public Utilities Commission could retroactively review rate hikes permissible under the plan during the next general rate case, a reversal of the current practice in which it reviews such rate increases before they take effect.

The wide-ranging amendment also covers several significant changes to the state’s Renewable Portfolio Standard, its renewable demonstrations programs and its net metering program.

The bill also mandates that the Nevada Department of Environmental Protection oversee the closure and remediation of its coal plants, a job that would have gone to the Southern Nevada Health District under current law.

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  1. I built a number of cogeneration facilities around the country, with coal and petroleum coke as the primary source of power, and natural gas as the backup fuel. Trust me, just because nat gas has fallen in price lately, we will be taking it in the shorts down the road. I think NV Energy is going to stick it to us big time. All the green energy whiners will say "we didn't know that gas would increase in price like this". Get out your wallets, users, we will be paying through the nose, and NV Energy will be smiling like an innocent baby. You wait and see.

  2. Nothing more than a legislative end-run around the PUC... which is hilarious, because the gutless PUC acquiesces to every NVEnergy whim.

    What's the point of having the PUC, or putting bodies like NVEnergy or the Water Authority under its control if these entities can just lobby their way out from underneath them?

    We've already seen how NVEnergy screws their ratepayers by charging them extra when the ratepayers conserve energy. Why should we trust that NVEnergy has anything other than their bottom line at stake?

    "A recommendation is going to the state Public Utility Commission on Thursday to allow NV Energy to collect $10.2 million from its customers for electricity they never used."

    http://www.lasvegassun.com/news/2012/dec...

  3. It's not such a great victory when you realize that they're just going to build a natural gas fired plant, they are currently being sued by the Indian tribes for pollution run off, they have been caught red handed faking environmental reports, they continue to buy renewable credits from out of state rather than build renewables here and in the end they will continue to pollute & lie about it, make a 10.8% interest rate on energy for what should be a public utility w/ no interest rate, and charge whatever they damn well please while the PUC rubber stamps rate increases like they always have.

  4. Shouldn't Cost the users more than an additional 225%.

  5. Okay, everybody reach for their wallets now.

  6. When our own NV State Legislature has a Bill dreamed up by the Sen. Committee on Commerce, Labor, and Energy, SB 252, to INCREASE the State RPS to 35%---what is a power company supposed to do? We have been forced to subsidize way too many solar and wind projects in NV. Far more than are necessary for NV Energy to be able to meet the existing RPS. Therefore, our legislators, in their infinite idiocy, say, "We must force NV Energy to buy more solar and wind power, to sell to their captive customers! But NV Energy is already meeting the RPS--WE WILL INCREASE THE RPS, AND FORCE THEM TO BUY MORE!" These prices will be passed on to rate payers. And, we can't have rate payers knowing just how expensive the solar and wind is...so we have another bill, SB 123, which makes the prices NV Energy will pay for electricity purchased from these solar and wind projects A TRADE SECRET. That's right, let the buyer beware. We are not allowed to know how much it costs.

    Show up today, at 1:30 pm over at the Grant Sawyer Building, Room 4412E. The Sen. Committee on Commerce, Labor, and Energy are having a hearing. Here is their Agenda:
    https://nelis.leg.state.nv.us/77th2013/A...
    Be sure to take a look at SB 252, SB 123, and all the others. TELL THESE PEOPLE NOT TO INCREASE THE RPS--TO A LEVEL HIGHER THAN CA'S--WE SIMPLY CAN'T AFFORD IT.

  7. Can you say 18 cents a KWH? WE are going to pay for the early decommissioning of the coal fired plants, WE are going to pay for the construction of the new Natural Gas fired plants, WE are going to pay for the construction of the renewable energy plants, and WE are going to pay for the increased costs of the renewable energy. And then you are going to see increased costs as more pipelines are needed to bring the natural gas to this area. I am sure many of you remember how volatile the cost of natural gas was in the 80's and 90's. As more and more utilities move to natural gas, drilling will have to increase and now you are seeing the environmentalism movement trying to stop drilling. Then you will get to see the cost of natural gas go up which will increase the power bills even more.

    I am surprised that they just don't require every home to have 5kw of solar panels installed. That would make most homes nearly self-sufficient with electricity.

  8. I suspect this will result in another excuse for multiple requests for rate increases for years to come.

    We need competition. We need a co-op. Living under an energy monopoly is no way to go through life.

  9. Make sure you all conserve so they can make even more money.

  10. Brass, I don't think I've typically agreed with you, but the last few posts I've seen from you are spot on!