Water Authority to pump power too

Friday, Jan. 18, 2002 | 9:36 a.m.

The government agency providing water for your faucet may soon be lighting up your living room.

The Southern Nevada Water Authority board Thursday approved a $115-million buy-in for a power plant under construction in Apex, about 30 miles northeast of Las Vegas. Staff and board members said the 6-0 approval was a milestone because it commits the Water Authority to actually producing electricity for the first time.

Water Authority Assistant General Manager David Donnelly said the investment will help ensure that his agency has a reliable source of cheap electricity to bring water to 1.4 million people in Clark County.

While cost and reliability are the main reasons for the investment, the Water Authority can also sell the electricity on the open market if it isn't needed, he said.

The cost for electricity from the plant will be 3 cents per kilowatt/hour or less, Donnelly said. Cost of electricity purchased from the power grid can be double that rate.

"We think we are going to save ourselves a lot, a lot of money," he told the board.

With a budget this fiscal year of about $50 million for power, and expected to go up to $70 million next year, the Water Authority is the region's single largest power consumer. The power budget is almost triple what is was just two years ago, authority spokesman Vince Alberta said.

Donnelly said the authority will likely buy pieces of two or three more plants among about a dozen scheduled for construction in Southern Nevada. The investment in the new Apex plant, under construction by Phoenix-based Pinnacle West, should provide about 150 megawatts -- about a quarter of the plant's total production.

During summer months, the Water Authority uses about 250 megawatts for pumping water from Lake Mead to various distribution points around Clark County. One megawatt is about enough electricity to power 500 homes with air conditioners running.

Pinnacle West executives said they have several reasons for agreeing to the deal with the Water Authority. Most significantly, the deal provides a guarantee of a return for the company, said Ajoy Banerjee, Pinnacle West vice president for generation expansion.

"We are a conservative company," Banerjee said.

The deal with the Water Athority also covers the company's agreement with the Las Vegas Valley Water District -- a distributor that gets its water from the authority -- to provide power locally. Local policymakers for the district and authority brokered the deal to keep at least some of the power produced at the plant in Southern Nevada.

Pinnacle West needed the deal to secure water for operating the power plant.

Sheri Foote, a Pinnacle West spokeswoman, said the deal with the local agencies made sense because the company expects to make money as a power wholesaler.

"Nevada, particularly Southern Nevada, is a growing energy market," she said. "We were looking for somebody to join with us on this project, and it was a natural fit."