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NV Energy: Renewables growth justifies transmission line

John Seelmeyer

If NV Energy no longer plans to build a big coal-fired generating plant near Ely, how come it still needs a big north-south transmission line between White Pine County and the Las Vegas area?

The company thinks growth in renewable energy geothermal and wind generation in northern Nevada, solar in the south part of the state will create enough demand to justify construction of the line, said Michael Yackira, president and chief executive officer of the Nevada utility.

Even though the company pulled the plug on plans to build the generating plant at Ely, it hopes the Nevada Public Utilities Commission will give a quick OK to the 250-mile transmission line.

The line would be the first to directly link the power grids in northern and southern Nevada, and the utility hopes the 500-kilovolt line is operational by 2012.

A competitive, identically sized power line also is on drawing boards. The Southwest Intertie project, a joint venture of LS Power of New Brunswick, N.J., and Houston’s Dynegy, won the PUC’s approval in December.

That 234-mile line would cost about $350 million, the companies have said.

In their pitch to the PUC, LS Power and Dynegy said the line would help link renewable power projects to the cities that need electricity.

If there’s room in the market for only one of the two proposed transmission lines, Yackira said NV Energy will position itself as an experienced developer of big transmission lines across Nevada’s wide-open spaces.

Along with the growth of renewable energy sources in the state, Yackira said the development of new generating plants in Nevada requires more transmission capacity.

NV Energy currently operates about 6,000 megawatts of generating capacity in the state more than double the 2,500 megawatts it could produce in early 2006.

In fact, Yackira said, northern Nevada has been essentially self-sufficient in generating capacity since

completion of a 541-megawatt power plant at Tracy, east of Reno, last year.

The costs of bringing new generation onto the NV Energy system, however, pulled the company’s financial performance into the red during the fourth quarter. NV Energy reported a loss of $2.1 million on revenues of $766.2 million for the quarter compared with earnings of $3.7 million on revenues of $786.6 million in the final quarter of 2007.

Yackira said earnings were depressed by the acquisition of a 598-megawatt generating plant at Primm it purchased from Reliant Energy for $510 million and the startup of a new $400 million unit at another Las Vegas-area plant.

The company’s operations in northern Nevada earned $22.5 million on revenues of $316.9 million in the quarter compared with earnings of $8.1 million on revenues of $317.7 million a year earlier.