$90 million steaming to Nevada

Federal money is on the way to help companies develop as much energy from the ground in Nevada as Hoover Dam generates from the Colorado River.

Sen. Harry Reid, D-Nev., said Thursday that more than $90 million to juice research and development of geothermal power and create an estimated 1,100 jobs in the state is coming via the American Recovery and Reinvestment Act. The announcement came just as critics are launching attacks on that legislation based on a report saying the job-creating power of the so-called stimulus law isn't as great as advertised.

The announcement by Reid and Energy Secretary Steven Chu emphasized both the potential energy and economic benefits for Nevada in tapping into heat from the Earth to make steam and create electricity -- and how a jolt of government funding could help.

"I can remember the first time I traveled as a young man between Reno and Carson City," said Reid, referring to the early days of his legislative career that date back to the 1960s. "I had never seen anything like that. Steam coming out of the ground. We are going to harness that steam."

The money coming to Nevada for geothermal energy is part of $338 million to be spent nationwide on such projects. Private companies will kick in $353 million in matching funds, Chu said.

He said the combined federal and private spending is a step toward catching up with nations such as China, which he said is spending as much as $9 billion per month developing renewable energy sources.

"Right now we are behind in the race," Chu said.

In Nevada the estimated $90 million in funding will go to 25 projects in the northern half of the state.

Most of the projects are aimed at research and development into new ways to drill for geothermal energy and for technology that could make electricity from energy that can't be converted to power with today's tools.

There are about 300 megawatts of geothermal energy in production in Nevada, with 200 additional megawatts to be developed by 2012.

"The Western U.S. is really becoming the research center for a lot of this innovative work," said Paul Thomsen, director of policy and business development for Ormat Technologies of Reno. "Hopefully we'll see federal labs and researchers coming out to Nevada."

Energy experts estimate there are as many as 3,000 megawatts of available energy from geothermal sources that could be developed in Nevada.

By comparison, Hoover Dam produces about 2,000 megawatts, with a small portion used in Nevada.

Thomsen said that at today's cost, it would require about $12 billion to develop all 3,000 megawatts of potential geothermal power.

The state's geothermal resources are located in the north, where peak demand is about 1,700 megawatts, according to NV Energy.

It would take development of a new transmission line -- something NV Energy will seek approval for as early as next month from the Public Utilities Commission -- to move that power to the southern half of the state, which uses as much as 5,800 megawatts at peak demand.

"With money coming in from the federal government, it is likely to happen far more quickly than it would otherwise," NV Energy CEO Michael Yakira said.

Ormat, a geothermal power producer, will invest about $8.5 million of its own money to access $13.7 million in federal grants through the program announced Thursday, Thomsen said.

The company will need more scientists, technicians and administrative staff as a result, he said. When asked how many new jobs Ormat would create with the funding, Thomsen said, "fewer than 100."

Job creation is a hot political issue nationally and in Nevada, where the unemployment rate is 13.3 percent statewide.

A report from The Associated Press on Wednesday said the federal government has, "overstated by thousands the number of jobs it has created or saved with federal contracts under (President Barack Obama's) $787 billion recovery program."

Republicans seized on the report Thursday.

"Today's report further demonstrates just how incredibly wrong Senator Reid was about the so-called 'stimulus' bill, which he claimed would 'protect and create three and a half million jobs across our country when he rammed it through the Senate in February," wrote National Republican Senatorial Committee spokesman Brian Walsh.

Jeremy Aguero, a principal at the economics research firm Applied Analysis in Las Vegas, says the stimulus is helping the Nevada economy largely by preserving state-level programs and associated jobs.

"Our job losses would have been substantially more, but for the economic stimulus," Aguero said.

He said the energy announcement is an example of how government spending can contribute to the overall economy.

"What I think the government is attempting to do is provide an incentive for the private sector to get in and make an investment," he said.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.