Agency appeals approval to build new power plant

The attorney general's Bureau of Consumer Protection has appealed state regulatory approval of a utility power project that would cost $200 million more than buying an existing power plant nearby.

Officials at the Public Utilities Commission are reviewing the appeal and will respond in court, commission spokesman Rick Hackman said.

NV Energy started spending money to build the natural gas-fired, power plant at the Harry Allen site north of Las Vegas in late 2007 without commission authority. A spokeswoman for NV Energy couldn't be reached for comment Friday.

The electric utility sought approval in 2008 for the $682 million project but did not initially disclose that LS Power Associates had offered to sell the Apex Generating Station.

LS Power said it would sell Apex, a similar existing plant nearby, for $200 million less than the cost of the new plant.

When commission staff analyst Jon Davis learned of LS Power's proposal to sell Apex, he argued that the commission should approve the Harry Allen project only if NV Energy couldn't reach an agreement to buy the Apex plant.

The three-member commission rejected Davis' recommendation, saying NV Energy didn't seek authority to buy Apex and the purchase "was not before the commission in this filing."

The commission approved the Harry Allen plant in October and denied the bureau's request for rehearing or reconsideration in November.

In its appeal, the bureau argued that customers of NV Energy would pay higher rates as a result of the decision to build a new, more expensive plant.

Bureau chief Eric Witkoski said the commission should have considered the less expensive plant, given the economic downturn and a staff assessment that the new plant would be the most expensive in the West. He noted that NV Energy is asking regulators to increase residential rates by 17.5 percent later this year

"We ought to buy the cheap one and worry about the other one later," Witkoski said.

Senior Deputy Attorney General William Stanley, who signed the appeal on Tuesday, asked a district judge in Carson City to reverse the commission decision and return the case with directions for the commission to gather more evidence.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.