Nevada exec downplays potential of solar energy

Tuesday, March 20, 2001 | 11:07 a.m.

The development of solar energy isn't the answer to Nevada's power woes because the technology hasn't advanced enough to make it economically viable, Nevada's top utility executive said today.

Walter Higgins, addressing the Nevada Development Authority, said while Nevada gets an abundance of sunshine that could be converted to electricity with photovoltaic technology, that technology would be difficult to finance on a commercial basis.

Higgins, chief executive officer of Sierra Pacific Resources Inc., the parent company of Nevada Power Co., discussed ways his company is working to solve the current energy crisis in his presentation. He also talked about solar and nuclear power alternatives in a question-and-answer session that followed his speech.

Higgins, who holds a nuclear science degree from the U.S. Naval Academy, said nuclear power isn't the answer because of safety issues and concerns about nuclear waste.

But Higgins said he is encouraged by efforts by state government leaders and regulators to prevent the problems that have plagued California from occurring in Nevada. California today is experiencing a second straight day rolling blackouts and sporadic outages.

Higgins also said that while the deregulation of the utility industry is on hold in Nevada, allowing large customers the ability to purchase power from other suppliers could be beneficial to the state because what they would have used could go back on the grid for other customers and the utility wouldn't have to buy as much from other providers.

Deregulation has been a failure in California, Higgins said, because regulators froze rates and didn't allow utilities to recover fuel and purchased-power costs that skyrocketed. As in past public appearances, Higgins was highly critical of California policies that put "no-growth and don't-do-anything interests" above the needs of the public.

He said California's NIMBY attitude -- Not in My Back Yard -- has shifted to BANANA -- Build Absolutely Nothing Anywhere Near Anybody.

"I think the January blackouts prove that a power plant has to go in somebody's back yard," Higgins said.

A no-growth policy in California, he said, ultimately could affect Nevada, even though Sierra Pacific and Nevada Power have signed fuel and power contracts to handle peak loads for the coming summer. Higgins said California's utilities have become "wards of the state" on the verge of bankruptcy. Because many California communities are unwilling to allow power plants to be built where they're needed, the state government will step in and acquire power at any price to prevent the lights from going off.

If that happens, Higgins fears Nevada's suppliers would make power available to California at the expense of Nevada.

Still, Higgins is leery of federal intervention in the process and believes Nevada's strategy is sound. He praised government leaders who are working to speed the permitting process allowing the construction of new power plants in Nevada and regulators who are allowing Sierra Pacific to recover fuel and purchased power costs.

He said it is critical for his company to remain financially solvent so that it can invest $300 million in new transmission lines to connect the new power plants to the grid.

In an interview following the presentation, Higgins said conditions have not changed on Sierra Pacific's proposed $3.1 billion acquisition of Portland General Electric from Enron Corp., Houston, and he said the deal has "between 2 and 10 percent chance of going forward."

Higgins earlier expressed pessimism about the possibility the deal would be completed because of Sierra Pacific's weakened financial position.

Higgins has said the Portland General deal would benefit Sierra Pacific and Nevada customers through reduced staffing of the two utilities and that Nevadans would share in the benefits. Critics have said Sierra Pacific is empire building on the backs of Nevada ratepayers. Higgins said there's a May 5 deadline for consummating the deal, although Enron said terms enable both parties extensions.