Nov 28 - Las Vegas Review - Journal

Prospects for three billion-dollar, coal-fired power projects in Nevada are dimming because of an appeals decision on a power project in Utah, according to the Sierra Club. Yet an attorney for one of the Nevada projects sees no reason the Nevada environmental agency cannot issue final air permits for the project despite the ruling.

The issue stems from an Environmental Appeals Board decision that ordered the Environmental Protection Agency to reconsider the air permit granted for Deseret Electric Cooperative's coal-fired power project at Bonanza, Utah.

The board said that EPA should either require a reduction in the amount of carbon dioxide that could be spewed from the Bonanza power plant or explain why it decided not to regulate carbon dioxide emissions.

Sen. Harry Reid, D-Nev., wrote to Gov. Jim Gibbons on Tuesday, urging him to switch his support from the coal-fired projects to renewable energy, such as solar, wind and geothermal power. Representatives of Gibbons' office were unavailable Wednesday.

An attorney representing Sithe Global Power, the developer of the coal-fired Toquop Energy Project at Mesquite, didn't criticize Reid's letter. But the attorney, Rich Alonso of Bracewell & Giuliani, said the decision isn't the death knell for new coal- fired power plants.

"The Deseret opinion did not say anything about building coal- fired power plants," Alonso said.

The board only required EPA to develop a more complete record of comments and analyze whether carbon-dioxide emissions should be limited at the Bonanza plant.

"The state of Nevada has the flexibility to move forward with permits regardless of the Deseret opinion," Alonso said.

The Nevada environmental division also could simply require coal- plant developers to use the Best Available Control Technology, which might mean building a more energy-efficient plant that would emit smaller quantities of carbon dioxide, he said.

"The Clean Air Act doesn't force you to make up technology that doesn't exist (to cut carbon dioxide)," Alonso said.

Sanjay Narayan, senior staff attorney with the Sierra Club, agreed with Alonso's legal interpretation in part, but he supported Reid's position in the letter.

"The senator's letter is basically dead-on as a policy matter and as a legal matter," Narayan said.

As a legal matter, the Deseret decision means that EPA and state agencies such as the Nevada Environmental Division must reopen air permit cases for the three projects in Nevada, Narayan said. They are NV Energy's Ely Energy Center, LS Power's White Pine Energy Station and Sithe Global's Toquop plant at Mesquite.

Nevada environmental regulators must obtain analysis from the power plant developers on carbon dioxide, additional comments from the public and expand their review of carbon dioxide, he said.

That could take another year if the state agency assigned enough staff to the coal-plant permits, Narayan said.

However, Narayan compared the public policy of building coal plants to buying a large sport utility vehicle with expectations that gasoline will soon cost $5 a gallon.

Coal-fired power plants emit the largest quantity of carbon dioxide per unit of electricity generated, he said, and Congress is expected to enact a law that makes industry pay for carbon dioxide pollution or use costly technology for capturing and storing carbon dioxide.

Congressional leaders have been talking about a cap-and-trade program for carbon dioxide where the maximum would be capped and industries would need to buy carbon credits from others to stay below the cap.

"We have been living in a world where carbon (pollution) is free, but that world's coming to an end," Narayan said.

The Nevada Environmental division is evaluating the implications of the Deseret decision, said spokesman Dante Pistone, but the state agency hasn't reached any conclusions.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.

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