Nevada Power Co. would be asking for a $100 million rate reduction, not a $436 million rate increase, if its proposed coal-fired power plant complex near Ely were already operating, an executive with the utility's parent company said Thursday.
If the planned $4 billion Ely Energy Center, which will include a power plant that burns low-cost coal, had been in operation last year, Nevada Power would not need to be seeking a 23 percent increase this summer for fuel and power purchases, Sierra Pacific Resources' Senior Vice President Roberto Denis told the Public Utilities Commission.
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Denis said the company's reliance on pricey natural gas to fuel gas-fired plants would have been reduced enough that the utility could have cut its rates by $100 million.
Denis outlined how the project would help Nevada Power of Las Vegas and its sister utility, Sierra Pacific Power Co. of Reno, keep pace with rapid population growth.
"We do have an aging fleet (of power plants)," he said, noting some plants were built 30 to 50 years ago.
The Ely Energy Center is needed to replace old power plants, he said.
In an interview, Denis said he had no new information about concerns raised by Hill Air Force Base about the power plant interfering with training flights over the Ely area.
The Ely Energy Center would include two 750-megawatt, coal-fired plants, the first of which would be operating by 2011. The project also includes building a transmission line that would connect Nevada Power and Sierra Pacific Power for the first time, allowing them to share power.
The company also expects coal gasification technology to become financially feasible and to build a 1,000 megawatt gasification facility after the conventional plant is completed, Denis said.
Denis also told commissioners Nevada Power has been beating deadlines to complete construction of its new Chuck Lenzie Generating Station north of Las Vegas.
Construction on the second block of the 1,200-megawatt power plant was halted Monday after a natural gas explosion damaged one part of the plant. Denis, however, said he remains optimistic that the plant will be completed by the June 1 deadline, in time for the summer air conditioning season.
