Feb 14 - McClatchy-Tribune Regional News - John G. Edwards Las Vegas Review-Journal

A former Nevada utility regulator is urging state leaders to consider alternatives to a coal-fired power plant at Ely, given uncertainty about whether the proposed plant will be built and growing demand for power in the Southwest.

Carl Linvill, an economist who served on the Public Utilities Commission and as energy adviser to former Gov. Kenny Guinn, made the recommendation in an 84-page report for the Energy Foundation, a nonprofit group with offices in San Francisco. Linvill works for Aspen Environmental Group in Sacramento, Calif.

His report comes amid growing concerns that Sierra Pacific Resources will be unable to build the 1,500-megawatt Ely Energy Center because of continuing opposition from environmentalists and Senate Majority Leader Harry Reid, D-Nev.

Linvill doesn't criticize the Ely project, but he suggests utility and government officials need to consider other ways to supply electricity to the state's growing population. Linvill expects the electricity supply to get tighter in the Southwest over the next five to ten years.

"Southwest demand for energy keeps growing without regard to whether the coal plant gets built," Linvill said in a telephone interview. "There are significant concerns about when the coal plant will get built or if it ever gets built."

In the report, called "Laying a Foundation for Nevada's Electric Future," Linvill calls for four steps to deal with the growth.

-- Build a north-south transmission line connecting Sierra Pacific Power Co. in Reno with Nevada Power Co. in Las Vegas.

The transmission line would provide more electric power reliability. It would enable Nevada Power to tap into energy generated by Northern Nevada's renewable energy sources, including wind power and geothermal resources.

With a transmission link, the two utilities could share power generation resources and could jointly contract for wholesale power at potentially lower prices, Linvill said.

The line would give Nevada Power access to the Rocky Mountain states and the region that includes Idaho and the Pacific Northwest.

The Ely project includes a transmission line that would link the two utility subsidiaries of Sierra Pacific Resources, but Linvill argues that the power line should be built even if the Ely coal plant is not.

-- Establish smaller "collector" power lines for transporting electricity from renewable energy sites to transmission lines.

-- Promote energy efficiency programs and use of power generation on the sites of power users.

-- Construct natural gas storage facilities. This would enable electric utilities more flexibility in scheduling gas deliveries for power plant use.

Linvill's work drew good initial reviews.

The report recommendations, including transmission lines for renewable power, are similar to positions Reid has been advocating "for a long time now," said Jon Summers, a spokesman for the senator. "If there's any state positioned to develop renewable energy, it's Nevada," Summers said.

Sierra Pacific Resources said the report seems consistent with the utility company's strategy.

"While we have not had an opportunity to review the report in its entirety, initially it doesn't appear to be inconsistent with our company's diversification strategy," Mario Villar, transmission executive, said in a statement.

State consumer advocate Eric Witkoski said of the report: "There's a lot of good information in there. We need to think about it, especially with regard to geothermal and wind power."

Witkoski said he was interested in considering an alternative to the Ely plant.

Sierra Pacific Resources stands to profit from the giant coal-fired Ely Energy Center, which will burn coal and cost about $5 billion, given inflation in construction costs, Witkoski said.

Utility holding company subsidiaries Nevada Power Co. of Las Vegas and Sierra Pacific Power Co. of Reno would be able to boost rates by $500 million yearly to cover the cost of profit for stockholders and interest payments on debt associated with the Ely center, Witkoski said.