Smaller version of big power-transmission line sought
June 3, 2010 - 11:00 pm
Consumer advocates are calling for a downsized version of a big power-transmission line that NV Energy wants to co-develop in rural Nevada.
NV Energy has asked the Public Utilities Commission of Nevada to sign off on an agreement it struck with energy developer LS Power to build the One Nevada Transmission Line (ONLine), a 235-mile line that would run from Ely to NV Energy's Harry Allen Generating Station in Apex. The line is a key part of NV Energy's integrated-resource plan, an outline of how it will obtain and finance its electricity in the next 20 years.
But the state Bureau of Consumer Protection called a witness Thursday who told the utilities commission that burdening consumers with the rates needed to pay for ONLine would be unfair.
John Candelaria, an engineer who works for consulting company Aspen Environmental Group, testified that he supports the idea of a new transmission line because it would allow access to renewable power from remote areas, as well as more reliable power, better resource sharing between northern and southern grids and more flexibility to meet changing greenhouse-gas emissions standards.
But NV Energy and LS Power have proposed too expensive a project, Candelaria said. The companies could proceed with their $510 million, 500-kilovolt plan, he suggested, but the best option for ratepayers would be a 345-kilovolt version with a smaller price of $335 million. The companies should only be able to recover $335 million from ratepayers for ONLine, even if they built their full-sized version, he said.
Candelaria also questioned NV Energy's analysis of how it would account for the costs and benefits of linking its northern and southern subsidiaries through ONLine. He suggested the commission order the utility to redo its interconnection research and file a fresh integrated-resource plan later.
But Kathleen Drakulich, an attorney representing LS Power, told Candelaria that it could take a year for NV Energy to perform new interconnection models and rewrite its case. She also noted that Candelaria's analysis didn't account for how NV Energy and LS Power would cover the cost differential between $335 million and $510 million if they went ahead with their 500-kilovolt proposal.
Candelaria disputed the yearlong time frame for developing a new plan. And he showed no sympathy for the companies on the investment issue. His findings regarded only what's best for ratepayers, he said, and it would be "overkill" to burden consumers with the costs of a 500-kilovolt line when a 345-kilovolt line would suffice.
"If this (ONLine) is such a great idea, I have a hard time understanding why the utility doesn't want to fund some of this at its expense," he said. "Their attitude is, 'We don't want to pay for it. We want the ratepayer to pay for everything.' If there are all these benefits, let them carry the cost of it and let them have the benefits."
Executives with LS Power also testified at the commission hearing Thursday, asserting that their joint venture with NV Energy is the best transmission option in the region, and smaller proposals won't work.
Thursday's questioning of ONLine by commissioners, commission staff members and attorneys revolved around a wide range of issues, including the viability of the 345-kilovolt option, whether the company would hire local labor to build its line and just how complete its plans and agreements with NV Energy are.
Mark Milburn, assistant vice president for LS Power and project manager on the Great Basin Transmission Line, testified that LS wouldn't proceed with the joint venture if the commission chooses the 345-kilovolt option, because the smaller line wouldn't have enough capacity to serve the 500-kilovolt segments flanking it. Plus, reworking plans and permits for the smaller line could take two years.
And a representative of the Southern Nevada Water Authority, which is intervening with testimony in the case, asked how ONLine's developers would ensure that they used Nevada-based labor to build the project.
"That's a basic tenet of how we do projects -- as long as it's economical, we employ local workers," Milburn responded.
Milburn added that LS Power has made hiring commitments to the Building and Construction Trades groups in both Southern and Northern Nevada, and to the International Brotherhood of Electrical Workers union.
Milburn estimated that the construction of ONLine could create anywhere from 350 to 600 jobs for Nevadans.
Hearings on the resource plan are scheduled to continue through Tuesday inside commission offices at 101 Convention Center Drive, Suite 200.
Contact reporter Jennifer Robison
at jrobison@reviewjournal.com or 702-380-4512.