Nevada Power searches for water to expand plant

A state official says he's willing to compromise to settle a legal dispute threatening the expansion of one of Nevada Power Co.'s generating plants near Las Vegas.

Nevada Power sued the state last week because it can't obtain enough cheap water to expand its 75.9-megawatt Harry Allen Generation Plant 35 miles north of Las Vegas.

State Engineer Michael Turnipseed two months ago rejected six of Nevada Power's applications for water from the Hidden and Garnet Valleys, 9 miles from the plant site.

The state said it granted the utility access to water two years ago for its planned expansion, to 5,000 acre feet of water annually, or no more than 10 cubic feet of water per second to be drawn from the Coyote Springs area, about 30 miles northwest of the plant.

"Nevada Power gave us the impression that they'd already got all the water they'd ever need to meet the requirements for running 4 to 5 units and also a combined cycle turbine, which requires more water than their current gas-fired combustion turbine," said Turnipseed. Water is used as a coolant for the gas turbines.

Utility officials said another three generating units may be added to the plant, which currently comprises one gas-fired combustion turbine unit, if applications for construction are approved. This would dramatically raise the plant's water requirement to more than 4,000 acre feet a year from the current 30 acre feet.

Turnipseed said he is now considering granting Nevada Power access to water in Hidden Valley, one of Nevada Power's proposed sites, if the utility withdraws its application for water from Garnet Valley and Coyote Springs, and if it can prove there is enough water in Hidden Valley to meet its requirements.

"We can't grant them access to Garnet. There isn't much water there because it's over-appropriated. There's already an allocation for the water that is recharged," said Turnipseed.

But the state's records show there are only 200 acre feet of surface water in Hidden Valley, far short of the 5,000 acre feet of water available at Coyote Springs.

"They will have to drill test wells and prove there is water in the carbonate system in Hidden Valley, and how much there really is," he said, referring to the rainfall that percolates through the valley's base rock and is trapped in its limestone solution channels.

The state has regulatory authority over ground and surface water and the State Engineer allows only enough water to be appropriated according to what is available. Applications to appropriate water are determined on the basis of whether the appropriation will have an impact on the environment.

Utility officials argued approval of its applications will significantly enhance economies-of-scale for whatever company buys the plant when Nevada Power of Las Vegas merges with Sierra Pacific Resources of Reno and the combined company sells its generating assets.

Reduced expenses for the power plant buyer could be passed on to Nevada Power, which intends to become a power distributor and could pass the lower operating costs on to customers, utility officials say.

"We need affordable water and a lot of it. The State Engineer denied our applications, saying we already have enough water to run the Harry Allen plant. But the cost of getting water is so great that it just isn't a reasonable source," said Gerald Mikesell, Nevada Power's attorney.

"Despite the Harry Allen station's potential, we've only had one unit constructed so far because our long-term plan is to sell generators and not build more. We've been investing in transmissions systems that allow us to buy up to several hundred megawatts of power," Mikesell said.

In order to bring the water from Coyote Springs to the 75.9-megawatt plant, Nevada Power would have to build a $30 million pipeline along the Lincoln County power line corridor to transport the water. The utility has filed for a pipeline right-of-way, but this has not been approved by the Bureau of Land Management.

This is only a temporary source and a larger and more permanent water supply is still needed to expand the plant's operation, Nevada Power said.

Craig York, Nevada Power's director of power generation services, said Turnipseed's denials have resulted in "real and future costs" of generation from the plant, but he declined to provide figures.

"The State Engineer's denial of applications has affected our finding more economical sources of water. If we don't challenge that, it will affect the economics of expanding generation plants for the Las Vegas basin," York said.

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