Sierra Pacific lays out plan to meet plants' opponents

Sierra Pacific Resources is moving ahead

with plans for big coal-fired power plants near

Ely at the same time that everyone from Oprah

Winfrey to John McCain is sounding the alarm

about the role that carbon emissions play in

global warming.

Expecting opposition to the company's

plans, Sierra Pacific Chairman and Chief

Executive Walt Higgins last week sketched out

the company's arguments:

* The two plants a 500-megawatt facility

projected to come on line in 2011 and an identical

plant to come on line in 2013 will allow

the Reno-based utility company to replace

older and dirtier generating plants.

* The technology proposed for the plants

would make them the cleanest in the West.

* They would use low-sulfur coal from the

Powder River Basin ofWyoming, further lowering

their emissions.

* If regulators crack down hard on carbon

emissions, Sierra Pacific Resources will leave

the door open for installation of technology to

capture carbon emissions and store them. So

far, however, that technology doesn't exist.

Talking with securities analysts who have

just as many questions about how the company

will pay for the $3.8 billion facility as they have

about its environmental impact,Higgins said

the company's push into renewables also provides

a talking point.

"I think it's important to look at the totality

of what the company will be,"he said.

With ongoing conservation efforts, the use

of solar, geothermal and wind sources to meet

15 to 20 percent of customers' demand and the

replacement of older plants, he said Sierra

Pacific appears to be positioned to meet fastgrowing

demand without increasing its carbon

emissions.

He acknowledged that the company expects

to encounter opposition as it applies for state

and federal permits it needs for the power

plants and a transmission line to carry the electricity

to the Las Vegas area.

Assuming the company wins regulators'

OK, it will finance the $3.8 billion cost with the

sale of additional stock and debt along with use

of retained earnings, said William Rogers,

Sierra Pacific Resources' chief vice president of

finance and risk.

Higgins noted, too, that the price tag may

rise as the costs of construction materials and

generating equipment continue to increase. The

company expects to have better cost estimates

when it receives proposals from construction

managers later this year.

The company's discussion of the Ely plant

came as it reported first quarter income of

$15.6 million on revenues of $756.4 million.

That compares with income of $1.2 million on

revenues of $707 million a year ago.

Sierra Pacific Power, the company unit that

serves northern Nevada, earned $21.9 million

on revenues of $338 million in the quarter.