Power line upgrade proceeding; FERC mediating dispute

Malcolm Hall

Wednesday, April 3, 2002 | 11:06 a.m.

The Public Utilities Commission of Nevada on Friday gave a conditional go ahead for construction of power lines to connect three new power plants to the Southern Nevada electric grid about 25 miles northeast of Las Vegas at the Apex Industrial Park.

But disputes between the power plant owners and Nevada Power Co. must be resolved and other governmental approvals are necessary before the lines are built.

With a combined capacity of more than 2,200 megawatts, the plants would be able to power about 2.2 million homes.

Atlanta-based Mirant is building a 575-megawatt power plant at Apex and jointly applied for permits to construct new 500 kilovolt transmission lines with GenWest, a subsidiary of Phoenix-based Pinnacle West Capital Corp.

GenWest is developing the 480-megawatt Silver Hawk plant adjacent to Mirant's. The two companies propose to jointly build and own a 3.2-mile line to connect their plants to Nevada Power's Harry Allen Switchyard at a cost of $4.4 million.

Charlotte, N.C.-based Duke Energy plans to build a 5-mile, 500-kilovolt line to connect its million 1,150-megawatt Moapa plant at Apex to Harry Allen at a cost of $8 million.

The Mirant and Duke plants are scheduled to come online in 2003, followed a year later by the GenWest plant.

Meanwhile, the Federal Energy Regulatory Commission -- which oversees electricity transmission in the United States -- is in settlement discussions with Nevada Power over transmission service agreements with five energy companies that want to use the company's proposed 500-kilovolt Centennial Project power lines.

The $300 million Centennial Project would upgrade electricity transmission in Southern Nevada to accommodate thousands of megawatts of new power generation proposed for the region.

Pinnacle West, Reliant Energy Services, Mirant, Calpine Corp. and Duke Energy all have agreements to use the lines to move some 2,800 megawatts of electricity from new plants they have in development.

Such contracts must be approved by FERC.

The PUC intervened in the case because it wants to make sure that if the Centennial Project is built out, Nevada Power first serves local needs.

Nevada Power wants five- to 10-year contracts with the generators that could be renewed after expiration, but Calpine proposed a 25-year agreement to handle transmission from its Moapa Paiute Energy Center north of Las Vegas. So Nevada Power did not include renewal language in its contract.

Connie Westadt, assistant general counsel for Nevada Power, said FERC tariff requirements allow a transmission customer to tell the company within 60 days before its contract expires whether it wants to roll it over for another term.

"Sixty days before the end of the contract is not enough time to plan your transmission service and still protect your ... load," she said. "We wanted more notice and that became an issue."

Westadt said a smaller issue involved what form certain security agreements should take that ensure the power plants will be built.

A settlement conference has been scheduled for April 9 at FERC headquarters in Washington, D.C.