Senate advances NV Energy move to close coal-fired plant

CARSON CITY — State senators un­animously backed a bill Wednesday that would require NV Energy to close the Reid Gardner power plant near Glendale and replace it with cleaner power generating facilities.

Under Senate Bill 123, 800 megawatts of electricity generated by the firing of coal must be replaced by the end of 2019. The loss of energy would be replaced with 350 megawatts of renewable energy and the company must construct or acquire 550 megawatts of noncoal-generated power such as natural gas. A megawatt of power is enough for 600 homes.

“SB123 sets a strong policy statement and charts a new course for Nevada’s energy future,” said state Sen. Kelvin Atkinson, D-North Las Vegas.

He and others noted that NV Energy officials testified for the bill and the need to reduce coal-fired emissions, particularly at Reid Gardner, 50 miles north of Las Vegas near the Moapa Indian reservation.

Both Gov. Brian Sandoval and U.S. Sen. Harry Reid back the bill.

Sen. Mark Hutchison, R-Las Vegas, called the bill “just and reasonable” and noted that consumer advocate organizations favored its passage.

He said because of environmental lawsuits over emissions from its coal plants, NV Energy expects 1.5 percent annual increases in rates over the next 20 years. With passage of the bill and switching to cleaner generating sources, energy costs will increase 1.65 percent a year.

That means a $100 a month utility bill in 20 years will cost $136 with passage of the bill, $132 without it, according to Hutchison.

But Geoff Lawrence, deputy director of policy for the Las Vegas-based Nevada Policy Research Institute, said the bill will lead to much higher rate increases.

“There is no cap on rate increases caused by an increase in natural gas prices, which are historically volatile,” Lawrence said in a statement.

He said ratepayers not only must reimburse NV Energy for constructing new power plants, but for the remaining costs of the plants it closes.

In addition, Lawrence said government regulations guarantee a return on equity of 10.5 percent to the utility.

State Sen. James Settelmeyer, R-Minden, said the “political reality” is that “sooner or later all these coal plants will be shut down.”

“Jobs will be created” in construction of new power plants, he added.

Reid Gardner produces 557 megawatts. Two of its generating units date back to the 1960s. The company announced in April that it will close three of the four units at Reid Gardner in 2014 and the other one in 2017.

Michael Yackira, the NV Energy chief executive office, said the change from coal to renewable and gas-fired energy will “make Nevada the focal point for the nation” for clean energy production.

The company also said it would stop taking power from the Navajo coal-burning plant in northern Arizona by 2019 and its other coal-fired plant, the North Valmy Generation Station near Battle Mountain, is scheduled to close in 2025.

Seven of the company’s 10 plants use natural gas.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.