Contractors await word on Sierra Pacific power plant

Three construction companies, each of them with a specialty in power plants, continue to push hard this week to win a contract to build a $420 million plant at Tracy for Sierra Pacific Power Co.

The Reno-based utility expects to award the contract within the first 10 days of this month.

Although it hasn't identified the companies in the running, three companies are finalists for the work.

Construction of the plant will take about two years, and it's expected to come on line in June 2008.

It will produce 514 megawatts of electricity, enough to serve at least 205,000 additional homes.

Sierra Pacific Power will award a lumpsum, turnkey contract for the plant, said Roberto Denis, senior vice president for energy supply for Sierra Pacific Resources, the parent company of Sierra Pacific Power.

That allows the utility to know precisely what its costs will be as it starts the major project.

Other alternatives such as target price construction, in which the utility and construction company would share any cost savings, or a cost-plus contract don't provide that same confidence about the final price tag.

The competitors for the construction are working their way through thick bid books that cover everything from detailed specifications for the combined-cycle natural gas plant to construction schedules, performance guidelines and penalties, Denis said.

The bid book represents months of work by a consultant,Houston-based Zachry Project Management and Consulting, L.L.C., hired by Sierra Pacific to nail down details of the new plant.

A key decision: Fueling the plant with natural gas in a combined cycle that captures heat that otherwise would be wasted.After natural gas is burned to create steam to drive the plant's generators, the hot exhaust gases will be routed to create even more steam.

That can be twice as efficient as a traditional gas-fired plant.

Price alone won't determine the winning bid.

Instead, Denis said, utility executives will weigh a combination of factors that includes price, performance guarantees and the ability of the contractor to deliver a quality product.

And once utility makes its decision, the lawyers will get to work hammering out the details of a final contract before the first shovel of dirt is turned at the construction site along Interstate 80 about 17 miles east of Sparks.

It's a high-stress time, both for Denis and his team and the contractors chasing the work.

"Two years from now,we'll be able to break open a bottle of champagne and relax," said Dennis.