Geothermal boosts Sierra Pacific’s quota
April 26, 2004
Sierra Pacific Power Co., the northern Nevada electric utility, is mostly in compliance with the renewable energy portfolio despite its parent company’s request to be exempted from the state standard.
Except for the solar energy requirement, Sierra Pacific Power is ready to comply with the state’s renewable energy requirements through 2006.
Sierra Pacific Resources, the Renobased parent of Sierra Pacific Power and Nevada Power, the southern Nevada utility, recently submitted to the Nevada Public Utilities Commission its annual report required by the state’s renewable energy portfolio law.
In it, the two utilities asked to be exempted from the portfolio standard for 2003 and 2004.
According to the report, the renewable energy developers that the utilities have signed contracts with are having trouble obtaining financing for their projects due to Sierra Pacific Resources’ shaky financial position and poor credit rating.
“This is an issue we’ve been dealing with for the last few years,” said Colin Duncan, a resource contract consultant with Sierra Pacific Resources.
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“We tell the developers we have the wherewithal to fulfill contracts, but it is a very difficult issue to deal with.”
Sierra Pacific Resources is rated “non-investment grade” by every industry rating, according to the company.
But due to abundant geothermal resources in northern Nevada, Sierra Pacific Power currently has access to enough renewable energy to comply with the standard through 2006 – except for the solar power portion of it.
The standard, outlined in Senate Bill 372 passed in June 2001, requires a small portion of the energy to be supplied by solar power.
Both Sierra Pacific Power and Nevada Power have a contract with Solargenix for solar power, which has delayed its project by at least nine months due to financing problems.
Sierra Pacific Resources said it is continuing to talk to additional developers for new renewable energy contracts.
Among the developers, Duncan said, “a very small few say they can finance the project on our own books.
Most are not saying that, and have to walk away.”
At the April 28 meeting of the PUC, the commission staff is expected to deliver a report with a recommendation on whether to fine the electric utilities for not complying with the portfolio standard.