Feb 15 - Knight Ridder/Tribune Business News - John G. Edwards Las Vegas Review-Journal

 

The Colorado River Commission voted Tuesday to approve a 20-year extension of a contract for hydroelectric power from the Parker and Davis dams that will save Southern Nevada organizations an estimated $250 million over 20 years.

The vote was 4-0, with three members absent.

The Parker Dam at Lake Havasu and Davis Dam at Laughlin will provide several Southern Nevada organizations with 280 megawatts of power for less than 1 cent per kilowatt hour, river commission Executive Director George Caan said.

"It's good news for Nevada. It's good news for the Colorado River Commission," Caan said.

The price of less than 1 cent for hydroelectric power compares to 6.5 cents per kilowatt hour that utilities are paying for wholesale electricity at the Palo Verde Hub in Arizona under a 12-month forward contract quoted by the New York Mercantile Exchange.

Many electric generators burn natural gas and the price of gas has soared in recent years. But the hydroelectric power comes from dams, a kind of renewable power.

The price being paid is calculated based on costs of operating the hydroelectric generators, Caan said, rather than the wholesale market price of electricity.

The Southern Nevada Water Authority, which uses electricity to purify and pump water to area water districts, is among the organizations that supplements its power supply with hydropower from the dams.

Also getting hydropower from the dams are Valley Electric Association, the cooperative that provides electricity to Pahrump, and the Overton Power District No. 5, which serves Mesquite and small communities in northwest Clark County.

The six heavy industrial operations at Basic Management Industrial Complex at Henderson also will benefit from some of the Parker and Davis Dam hydro power. The complex, also known as the Black Mountain Business Park, has been getting low-priced hydropower since World War II when the manufacturing plants were contributing to the national defense effort, Caan said.

Nevada Power Co. and others get low-cost power from Hoover Dam, but the contract with the federal government for Hoover does not expire until 2017, Caan said.

The river commission has been negotiating on the contract with the Western Area Power Administration for about four years, he said.

The old contract expires next year, and the new contract runs until 2028. However, the benefit probably will last longer than that.

"It is expected that we will have these resources indefinitely," Caan said.

Parker Dam was completed in 1938; Davis was completed in 1953.