Reid Sees an Example Worth Following

Sep 17 - Las Vegas Review - Journal

Senate Majority Leader Harry Reid, D-Nev., on Friday advanced a new argument in his campaign to block development of conventional coal-burning power plants in Nevada, citing reports that coal-fired plants are being canceled and curtailed in seven other states.

"All these states are saying no to coal power plants that use inefficient and polluting technology," Reid said in a statement. "Instead, they're investing in renewable energy and energy efficiency because that makes so much more sense in the long run for the environment, consumers and their economies."

The report comes as part of Reid's promise to use all his power to stop coal-fired power plants under development in Nevada. He opposes coal power plants being developed by Sierra Pacific Resources of Reno, LS Power of East Brunswick, N.J.; and Sithe Global Power of Houston.

Top executives at Sierra Pacific, the parent company for Nevada Power Co. and Sierra Pacific Power Co., disagreed, citing statistics that indicate numerous coal-fired power plants are in late stages of development around the country.

Sierra Pacific Chief Executive Officer Michael Yackira counted 100 coal power plants under development around the country. Half of those projects, with total generating capacity of 24,000 megawatts, are in advanced stages of development or permitting, Yackira said.

But Reid said the Department of Energy reported two dozen coal projects have been canceled since early last year.

Although Nevada's electric utilities are getting more power from renewable resources such as sunlight, wind and geothermal or hot underground water, Yackira contends that the utilities must also develop conventional coal plants.

"We simply need to have more coal in our fuel mix," Yackira said.

Nevada Power and Sierra Pacific Power get 70 percent of their electricity from plants that use natural gas, which has shot up in price in recent years. The utilities want to use coal for part of the power plants to reduce reliance on gas.

Reid argues that Nevada utilities can satisfy growing demand by developing more renewable resources, promoting energy conservation and fostering combined heat and power or cogeneration plants that efficiently use energy for multiple functions in large buildings.

Executives with the Nevada utilities say they also support energy efficiency and renewable energy but argue that they also need more conventional power.

Reid suggested Nevada follow the example of Colorado, Florida, Kansas, North Carolina, Texas, Oklahoma and Washington where regulators, public officials or utility executives postponed, curtailed or canceled coal plants.

The last coal power plant in Nevada, Valmy unit two in Northern Nevada, was completed in 1985.

Roberto Denis, senior vice president of Sierra Pacific Resources, said the long duration since the last coal project reflects a decision by Nevada to stop building all kinds of power plants in the 1990s when utilities relied on then cheap wholesale power from other states. Wholesale power prices skyrocketed during the western energy crisis of 2000 and 2001, leading Nevada officials to build and buy power plants in Nevada.

Sempra Energy shelved plans to build a 1,450-megawatt, coal- fired plant in Northern Nevada a couple of years ago, but Nevada utility officials said the plant provoked controversy because it was going to use Nevada resources to generate power for California and other states.

Sierra Pacific executives say their coal-fired power project near Ely will be used to generate electricity for use in Nevada.

State regulators in Florida rejected a coal plant project there this year. Florida Gov. Charlie Crist urged utilities to stop relying on coal and gas-fired plants because conventional plants produce carbon dioxide, which may lead to global warming.

Two cooperative electric utilities reduced the size of a coal- fired power project in Kansas this year, Reid reported. Duke Energy dropped plans this year for a coal plant in North Carolina after the project's costs increased. Avista Utilities decided to rely on gas- fired power plants and windmills for power instead of new coal plants, Reid said. Oklahoma regulators rejected an application for a coal-fired plant this month.

The Edison Electric Institute has pointed to rapid increases in recent coal-fired and renewable energy power projects, but Yackira said Sierra still estimates a total cost of $3.8 billion for the 1,500-megawatt Ely Energy Center and a related transmission line.