86°F
weather icon Clear

Consumers to foot bill for NV Energy’s over-budget $2.9B transmission project

Updated February 27, 2024 - 10:03 pm

NV Energy’s plan to build new transmission lines across the state is expected to be at least $443 million over budget.

In testimony filed with the Public Utilities Commission, NV Energy disclosed that Greenlink Nevada’s expected costs, as of July, have risen from about $2.5 billion to $2.9 billion, most of these costs are likely to be covered by NV Energy’s customers. This is an increase of 17.8 percent from Greenlink’s initial price tag.

NV Energy contends it is taking every cost-efficiency measure possible on Greenlink.

“The original estimates for Greenlink were prepared in 2019, based upon preliminary studies and no design,” NV Energy spokesperson Meghin Delaney said in an emailed statement. “Nearly all the contract and material prices are coming in higher than anticipated. NV Energy is not immune to the inflationary issues that have been plaguing the country and are driving up the costs of goods and services.”

The increase in costs is based on the economic fallout and impact of the coronavirus pandemic on construction, said Carolyn Barbash,then-vice president of transmission development and policy for NV Energy, in testimony provided to the PUC. Barbash retired from her post in January.

“Since the original estimates were created and following the COVID-19 pandemic, there have been significant disruptions to the international supply chain, a shortage in the available workforce, and a substantial rise in inflation,” Barbash said in her testimony.

The $2.9 billion price tag may not be the actual cost of Greenlink as the transmission line routes are still going through the Bureau of Land Management’s permitting process, and Barbash said a delay in this process could result in a further increase in Greenlink’s cost.

The BLM didn’t respond to an inquiry regarding the permitting process.

Since the PUC has already approved the Greenlink project it doesn’t need to approve any budget increases, PUC spokesperson Peter Kostes said. However, the PUC does review any requests from NV Energy to recover costs from customers for its major projects and can adjust how much customers will pay for these projects.

The cost of Greenlink will be split between NV Energy’s wholesale transmission customers, including large casinos that don’t get their energy directly from the utility, and its two Nevada customer bases, Delaney said. In general, customers based in Southern Nevada would pay for 70 percent and Northern Nevada customers would pay 30 percent of the Greenlink project.

NV Energy expects that Greenlink’s costs will be recovered over a period of 70 years or more to reduce the impact on customers, said Delaney.

As proposed Greenlink Nevada will add two separate large electric transmission lines that would create a transmission loop to connect northeast Nevada to Las Vegas and Reno. In total, the Greenlink project is supposed to include the construction of 585 miles of transmission lines in Nevada and be in service by December 2028, according to NV Energy’s website.

NV Energy has said the Greenlink project will make it easier to add renewable energy projects in Nevada and meet the state’s goals for renewable energy.

Contact Sean Hemmersmeier at shemmersmeier@reviewjournal.com. Follow @seanhemmers34 on X.

Don't miss the big stories. Like us on Facebook.
THE LATEST