An independent company claims Nevada utilities copied its proposal to build the state's largest power plant and wants to challenge the utilities' project in regulatory hearings.

LS Power Group of East Brunswick, N.J., on Tuesday filed a written request with the Public Utilities Commission, seeking permission to participate in hearings over the Nevada utilities' plans to build a giant coal-fired power plant near Ely.

LS Power, which wants to build a similar coal-fired power plant near Ely, fears it will be denied an opportunity to participate in the hearings.

Michael Liebelson, co-founder of LS Power, said the Public Utilities Commission staff has said "they will not let us intervene" in a resource plan proposal that will be the subject of commission hearings.

Liebelson said it would be "unheard of for us" to be denied an opportunity to participate in utility commission hearings. It has participated in similar cases in more than six other states, said Eric Crawford, LS Power project development director.

At stake is the potential regulatory approval of the first $300 million in spending on a planned $3.7 billion coal-fired power plant near Ely. The so-called Ely Energy Center was included in resource plans the two utilities filed earlier this summer.

Nevada Power Co. and Sierra Pacific Power Co. want to build a 1,500-megawatt coal-fired power plant that would use low cost coal as a fuel for generation, rather than depending so much on expensive and volatile natural gas for power generation. The utilities also propose to build a transmission line that would connect the Ely Energy Center to Reno and Las Vegas customers.

The utilities unveiled the plans in January and based them on LS Power's earlier proposal to build a 1,600-megawatt coal-fired power plant that would sell wholesale power to electric utilities and other wholesale power buyers, according to LS Power. LS Power also plans a transmission line.

"They copied our projects," said Michael Liebelson, co-founder of LS Power.

The first issue for LS Power is whether it will be allowed to participate in hearings over the Nevada utilities' proposed plant at Ely.

Kristy Wahl, a spokeswoman for the commission, said she did not know who told LS Power that it would be denied an opportunity to participate in the case, but it was not Don Soderberg, chairman of the Public Utilities Commission and the presiding officer in the case.

The chairman will not know whether to permit the intervention until he reads the petition from LS Power, she said.

"The commission has some very specific rules of procedure as to who is allowed to be an intervenor," said Roberto Denis, senior vice president of Sierra Pacific Resources, the utilities holding company. "We would expect the commission to apply its rules."

Liebelson acknowledged that Nevada Power Co. and Sierra Pacific Power Co. are proposing their project without first getting a benchmark in the form of competitive bids from power suppliers.

For example, two large electric utilities in Arizona -- Salt River Project and Arizona Public Service -- and PNM, the main utility serving New Mexico, all requested proposals recently for power supply contracts before building plants of their own.

Liebelson said the lack of competitive bids to consider in the Nevada Power case could be solved by allowing LS Power to participate in the resource plan case.

"We think competition for generation is good for Nevada," Liebelson said.

"The commission should look at (the LS Power proposal) as an alternative because the objective is to come up with a least cost result," Liebelson said.

Nevada Power said it already considered LS Power's project and another coal-fired power plant proposed by Sithe Global Power near Mesquite, as well as out of state power projects. It found problems with all of those projects, the Nevada utilities stated in a regulatory document.

Nevada Power said it held discussions with LS Power on a possible joint venture on an Ely power plant, but the utility said it was unable to reach an agreement.

LS Power contends that the utilities are taking risks, including the possibility of delays and cost overruns, by pursuing the project on their own. Those risks could be reduced by forming a partnership with LS Power, Liebelson said.

"There is no free lunch," Denis said. Independent power suppliers expect to get paid for taking risk, and the cost of those payments increases the cost of power, Denis said.

Liebelson repeated his claim that LS Power is three years ahead of the Nevada utilities and that Nevada utility customers would save $600 million over those three years based on the lower cost of coal.

"I think that statement is not consistent with reality and not supported by facts," Denis responded.

LS Power also argues that its proposal is better because it already has an agreement giving it access to water the power plant will need while the utilities do not have a water rights agreement yet.

Nevada Power and Sierra have filed a realistic plan for completing the first phase of the plant by the end of 2011, Denis said. In its petition to intervene, LS Power predicted that the Nevada utilities wouldn't be ready to start the first plant until 2014.

In its resource plan, the utilities seek commission approval of a $300 million budget for engineering design, initial orders of equipment and other preliminary expenses for the power plant and transmission line.