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August 28, 2014

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Guinn says Nevada energy crisis looms

Calling it the greatest crisis Nevada has faced in four decades, Gov. Kenny Guinn on Tuesday pledged to work with Western governors and the Bush administration to prevent a California-like energy crisis in this state.

"We're faced with the greatest crisis in the 36 years that I've been involved in the public sector," Guinn told about 250 contractors and local leaders during the Associated General Contractors' quarterly luncheon at the MGM Grand Conference Center.

"The backwash is starting to flip over from California," Guinn added.

On Thursday Guinn will fly to Portland, Ore., to discuss the energy crisis with eight Western governors, Energy Secretary Spencer Abraham and Federal Energy Regulatory Commission Chairman Curt L. Hebert Jr.

"It's a very important meeting," Guinn said after his speech. "It's important that we have a chance to tell the federal government what we need."

For the first time since his State of the State address Jan. 22, Guinn offered some ideas about how Nevada can increase energy supplies.

"We're trying to work on rules that would keep the federal government from stopping us every time we try to draw water for a new power plant," Guinn said.

At the Western Governors Association conference later this week, Guinn and others are expected to ask that U.S. Forest Service appeals either be stopped or heard quickly.

If a Forest Service appeal is tied up for two years, he said, desperately needed plant construction also will have to wait.

"We need them to work with us, not against us," Guinn said.

With McCarran International Airport recently down to its last 36 hour supply of jet fuel reserves and gas lines two days from running empty, Guinn said the state's own supply must increase.

When California instituted rolling blackouts, power was cut to the turbines that push jet fuel and gas over the border into Nevada. Nevada had to give California reserve power to supply the turbines to ensure the fuel would keep pumping.

"If we didn't have that reserve, we'd have a serious problem," Guinn said.

Although Guinn pledged to ask the federal government to ease some of its restrictions, he offered no comments on other possible solutions to the pending energy crisis.

Some Democratic state leaders have called for a moratorium on divesting any of the power plants in the state. Prohibiting the sale of the plants would ensure some level of internal supply, they argue.

Guinn's proposed budget includes $41 million to offset the state's anticipated increases in utility costs. Another $5 million is set aside to assist low-income residents with power costs.

The governor reminded the contractors that he didn't ask them or residents for any new taxes to fund his two-year spending plan, but warned them of a pending $1 billion deficit in just eight years.

"I don't want to offer you false hope and think it's not going to change in the future," Guinn said, referring to the current pledge not to raise taxes.

"I can tell you that this is just about put us at the end of our ropes," Guinn said.

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