LS Power closer to coal deal

An independent power developer on Friday moved one step closer toward construction of a giant coal-fired power plant at Ely, but the prospects for the project remain uncertain because of environmental issues.

The Bureau of Land Management released the final environmental impact statement or environmental study for the coal-fired, 1,590-megawatt White Pine Energy Station proposed at a site 35 miles north of Ely near U.S. 93.

Environmental groups oppose the project because coal-fired power plants throw off large quantities of carbon dioxide, which scientists say leads to global warming.

LS Power of East Brunswick, N.J., argues that the plant would provide a low-cost source of electricity for investor-owned electric utilities, electric cooperatives, municipal utilities and power marketers in the region.

"We're thrilled. This is a major milestone for the project," said Mark Milburn, LS Power's director of project development.

The power plant would give the Ely area a big shot in the arm, Milburn said.

During four years of construction, employment would peak at 1,200 workers and the area would get $100 million in property and sales taxes, Milburn said. After completion, the plant would employ 135 workers and would add $15 million to local tax revenue yearly.

While Ely leaders back the project, environmental groups and Senate Majority Leader Harry Reid, D-Nev., have conducted an intense campaign to stop development of new coal plants in Nevada.

"Nevadans support moving away from fossil fuels and toward a new clean energy future and economy, and this plant is going to be a 30-year commitment we will end up regretting," Lydia Ball, regional representative of the Sierra Club, said in an e-mail.

Tim Hay, former state consumer advocate and an environmental consultant for the National Resource Defense Council, said it appears the BLM will grant LS Power right of way for the power project after 30 days.

BLM approval would be consistent with President Bush's administration official's "push to approve coal plants before they leave office," Hay said.

Milburn also expects LS Power to get BLM approval for right of way.

LS Power needs to get a final air permit from the Nevada Division of Environmental Protection, which is awaiting determination by the Environmental Protection Agency on whether the project complies with the Endangered Species Act.

If LS Power obtains the air permit and other needed government approvals -- without any appeal of those decisions -- the company could start building the first 720-megawatt phase of the plant by the end of next year, Milburn said.

Hay predicted one or more interested parties will appeal if LS Power obtains the needed permits, slowing if not stopping the project.

"I don't think the (environmental impact statement is) an indication that this plant is going to be built soon, if ever," Hay said.

With the financial market meltdown, Hay said, "it's going to be very difficult for merchant plants of this type to be financed."

Sierra Pacific Resources, the holding company for NV Energy, proposes to build a 1,500-megawatt coal plant, also near Ely. The draft environmental impact statement on the utility project is scheduled to be released Nov. 7.

Sithe Global Power, an independent power producer, proposes to build a 750-megawatt coal plant near Mesquite.

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