Officials set sights on cheap energy

Jeffrey Libby

Monday, July 9, 2001 | 11 a.m.

Just more than a year after a 480-megawatt natural gas-fired energy plant opened in the Eldorado Valley, Boulder City officials are putting finishing touches on a deal that would allow the city to purchase up to 10 megawatts of power each month at rates far below market prices.

Ten megawatts is enough to serve about 10,000 homes during the cooler months, and about 5,000 homes in the summer. Currently Boulder City has 6,385 households, according to the 2000 Census.

If city officials pull off the deal, Boulder City residents could have a continuous inexpensive source of electricity for the next 20 years.

A year ago, with relatively cheap power available across the western United States, Boulder City officials were in no rush to negotiate the amount and cost of power that El Dorado Energy would put aside for city use. They were satisfied with the annual rent of $800,000 for the plant, which is jointly owned by Reliant Energy of Texas and California-based Sempra Energy Resources.

But with the arrival of a regional energy crunch and skyrocketing prices, the City Council wants to establish a guaranteed backup supply of cheap energy to avoid buying power on the open market in peak-use times, City Manager John Sullard said.

As of Thursday, the end of the work week for Boulder City officials, details of the 10-megawatt deal remained tentative, Sullard said. But by the City Council meeting on Tuesday, officials hope to vote on a contract.

That contract will be doubly important to Boulder City residents.

Sullard, as well as Boulder City Councilmen Joe Hardy and Bryan Nix, said the approved contract will likely serve as a model for negotiations for energy from a second electric plant planned on the same 105-acre site. The site is located 17 miles southwest of downtown Boulder City off U.S. 95.

The planned 600-megawatt natural gas-fired plant, referred to as the Copper Mountain power station, is scheduled to break ground next year.

The power gained from Copper Mountain would allow Boulder City to venture out less often to buy power on the open market, where prices have been highest in recent months. Boulder City administrators currently buy 80 percent of the city's power from Hoover Dam. They buy the other 20 percent from Nevada Power, accounting for 60 percent of the total costs.

The deal with El Dorado Energy, though viewed primarily as a backup resource, should provide savings for residents, Sullard said.

Based on July market prices, Boulder City pays about 29 cents per kilowatt-hour to Nevada Power. An average home uses about 1,100 kilowatt-hours per month

The city would pay closer to 4 cents per kilowatt hour plus distribution costs for power purchased from El Dorado Energy and Copper Mountain, according to preliminary figures. Sempra and Reliant originally offered the city a 20 percent discount, but Sullard and Finance Director Bob Kenney have managed to drop the purchase price closer to generating costs.

But the cheap power comes with an obligation that the city offset pollution created by the plants.

Hardy, who has served on the county health board, has set Sept. 13 for a town meeting to discuss ways to offset emissions from the new plant. The city will receive about $3 million from Copper Mountain to reduce pollution elsewhere in the city.

"What I'm proposing, from a proactive, voluntary, do-something -good-for-the-environment standpoint, is a plan that will uphold the highest, strictest standards for emissions reductions, but one that also isn't limited to air quality," Hardy said.

The second plant was included as part of the lease approved by the City Council in May 1997, despite protests from residents concerned about pollution that would be generated by the plants.

Boulder City withdrew in June from the Las Vegas Valley air quality management area to allow more flexibility in bargaining for pollution credits. The Las Vegas Valley is in violation of federal laws governing allowable levels of air pollution. Boulder City is in the Eldorado Valley, to the south.

Under the former rules, Boulder City officials would have had two options if they wanted to open a second plant: plant trees and pave dirt roads. Both minimize dust, a major contributor to bad air quality in the valley.

Hardy says that at least one option, one that would rebuild city vehicles to run on compressed natural gas, would actually reduce pollutants, not just minimize dust.