Impact on Nevada power not expected

A proposal by California Gov. Gray Davis to buy the transmission lines for the state's precarious electrical system probably will not have a significant effect on Nevada's utilities, state and power industry officials said.

The latest moves to stabilize the situation in California will "change the dynamics of the power business substantially" there, said Tim Hay, Nevada Consumer Advocate, but probably won't affect Nevada's power woes.

California's electrical crisis, which has included rolling blackouts throughout much of the Golden State, has policymakers here scrambling to build more power plants and Nevada Power officials making sure they have contracts to buy electricity this summer.

During the hot desert months, Nevada has to buy power from outside the state to satisfy the demand created by air conditioners. This year -- and for at least several years in the future -- Nevada will compete with California for that power.

Elected officials from Gov. Kenny Guinn on down are concerned that blackouts, though unlikely, could happen in Southern Nevada this summer. The prospect has prompted state officials to prepare an emergency management plan to deal with the heat, a significant health threat during the summer.

Mark Schank, Nevada Power's director of regional transmission, said the company should have enough contracts in place to satisfy the summer demand.

The biggest threat would come from physical damage to the electrical network, such as a brush fire knocking out a transmission line, Schank said.

Schank said the changes in California, which will make the state the owner of the transmission network, will not affect the business arrangements that companies in Nevada and other western states have because the Independent System Operator, a quasi-public agency that oversees California's transmission, will remain in place.

But California's moves radically reshape the entire premise of deregulation, the shattered effort to bring down consumer electrical prices through encouraging competition in the electrical industry. Instead of leaving the power business, the state will have a larger role than every.

Hay, in Reno, said deregulation in Nevada will move a lot slower and more carefully than envisioned by the 1996 Legislature because of the California experience.

"For the next three to five years, it's probably going to be a very incremental approach," he said.

The problem throughout the West has not just been deregulation, although that is an important element of the chaos in California. The problem is that nobody anticipated how much power would be needed, how soon, Hay said.

"Load growth in the West far exceeded anybody's expectations," he said. Now power companies and policy makers are playing catch up.

"It's critical to get new supplies one way or the other," Hay said.

Environmentalists are concerned that the rush to get new power plants on line in two to three years could mean that environmental protection gets sidetracked.

Hay, however, said that the silver lining to the problems in the West is that clean, renewable sources of power are likely to go online sooner than gas-fired plants.

"There's a new opportunity to look at Nevada's renewable resources, particularly geo-thermal," he said.

Geo-thermal sources in Nevada's north could be paired with wind and solar power in the state's south to provide hundreds of megawatts of power quickly, safely and without contributing to air pollution, he said.

The power crisis has made such power economically viable, Hay added.

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