Sierra Pacific Resources, which has been contracting to buy electricity from renewable sources developed by other companies, plans to begin directly developing renewable facilities itself.
The Reno-based company currently is talking with potential partners to develop power plants fueled by geothermal resources or wind, and it hopes to talk with potential partners in the solar industry as well.
Speaking with securities analysts a few days ago, Sierra Pacific Chairman and Chief Executive Officer Walt Higgins said third-party developers of renewable power are "not res-ponding as quickly or as fully as we would like."
The company faces a state requirement to steadily increase the renewables portion of the power it sells to its customers in northern Nevada and the Las Vegas area.
The requirement started at 5 percent in 2005 and will rise to 20 percent by 2015.
That's going to require full-court pressure with substantial investment from both third-party developers as well the Sierra Pacific itself, said Tom Fair, the renewable energy program executive for Sierra Pacific Power Co. and Nevada Power Co. (The two utilities are the operating units of Sierra Pacific Resources.)
The challenge is all the greater, Fair said, because Sierra Pacific Resources' brush with bankruptcy a couple of years ago slowed development of geothermal and other facilities.
Developers of those projects, he explained, were unable to use contracts with Sierra Pacific Resources as collateral to borrow construction funds. Banks weren't convinced that the collateral was solid.
The company now is nearly back to an investment-grade credit rating, and companies that specialize in development of power plants fueled by renewable resources now are knocking on the doors of Sierra Pacific executives.
But the company feels pressure from the calendar. Geothermal, wind or solar projects often take three to five years to bring on line.
The company's interest is further spurred by the possibility that state regulators might allow a slightly higher return on investment for renewables projects developed by the utility.
If the Public Utilities Commission of Nevada agrees to designate a project as a critical facility, a utility is allowed to earn a higher return on its investment in the project.
"We have an incentive to do it," Higgins told analysts.
It's unlikely, Fair said, that Sierra Pacific will begin development of geothermal, wind or solar facilities entirely on its own.
"We will generally co-develop with other companies," he said.
Sierra Pacific Resources is particularly interested in geothermal projects, Fair said, because of the abundant supply of geothermal resources in Nevada as well as the engineering expertise that's available in the region.
"That is Nevada's strong suit," he said.
The company hopes, meanwhile, to make headway this year with development of a wind-power project.
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