Bureau, environmental group urge review of Ely power plant

The attorney general’s office and an environmental group argue that it’s time for Nevada Power Co. to completely review the $5 billion coal-fired power project at Ely and other power alternatives.

Yet, Nevada Power contends that state regulators should set aside in-depth economic analysis of the power until 2010, when better information will be available.

Economist David Harrison Jr., a witness for Nevada Power, on Friday urged the Public Utilities Commission to delay the review of the planned Ely Energy Center, a project outside of Ely. He said Nevada Power can get better information on expected federal legislation on carbon dioxide pollution if it waits until 2010 to do a comprehensive study.

The analysis would address the projected cost of generating power from the Ely plant, given the prospect of regulatory costs associated with the huge quantities of carbon dioxide that coal plants throw off.

The nation’s policymakers seem intent on enacting a law that would reduce carbon dioxide based on scientist’s conclusions that carbon dioxide and other greenhouse gases lead to global warming, witnesses generally agree.

The new law is expected to cap the amount of carbon dioxide emissions and to require companies to buy credits from other companies to exceed the cap.

“Since there is now no specific carbon tax legislation and no specific information on the timing of the potential legislation — it is currently impossible to predict with any degree of accuracy the impact of potential greenhouse gas legislation on the Ely Energy Center or any of our generating facilities.” Nevada Power spokesman Mark Severts said in a statement.

The attorney general’s Bureau of Consumer Protection and Nevadans for a Clean, Affordable, Reliable Energy say that Nevada Power next year also should review alternatives to the Ely plant for power.

The bureau and the environmental group say the commission should require Nevada Power to study alternatives to the Ely center, which the commission didn’t get in 2006 when it initially approved the Ely project. Alternatives include natural gas-fired plants; renewable energy plants, such as those that harness wind and sun; and energy conservation programs.

The bureau and NCARE say that 2-year-old analysis of the coal-fired Ely Energy Center is outdated because of a 40 percent increase in construction costs since then, changes in fuel prices, and other factors. They are urging the commission to require a comprehensive review of costs and alternatives in 2009 as required when Nevada Power is scheduled to file an integrated resource plan for regulatory review.

“There’s a lot of uncertainty here,” said Eric Witkoski, bureau chief and state consumer advocate. “When (Nevada Power comes) back in 2009, let’s put all the cards on the table.”

Ezra Hausman, an economist testifying for NCARE, said postponing the review until 2010 could leave Nevada Power in a crisis because a looming power shortage might cause the commission to make a decision spurred more by need for immediate action than by a choice of the best energy sources.

Nevada Power should first increase energy conservation, “the least-cost, least-risk” approach to keeping power supply in balance with demand, Hausman said. Then, he advocates developing Nevada’s clean renewable resources — solar power, wind power and geothermal energy, which comes from hot underground water.

Severts responded: “It is very important to note that the Ely Energy Center has always been part of full portfolio of resources — including renewables, natural gas-fueled generation, etc. In addition to the Ely Energy Center and adding renewable energy to meet (Nevada’s minimum renewable energy requirements), we will still have a need to find or build other resources to meet our customers’ needs.”

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

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