Deal to be made for cheap power from Eldorado plant

Jeffrey Libby

Wednesday, Nov. 27, 2002 | 9:16 a.m.

A deal that would provide a backup supply of inexpensive power to Boulder City, insulating ratepayers from high market prices during the hot summer months of peak usage, appears within weeks of signing.

On Tuesday the Boulder City Council introduced a tentative agreement that would allow the city to buy up to 10 megawatts of electrical power each month for 20 years from a natural gas-fired plant located on city-owned land in the El Dorado Valley. Ten megawatts serves about 2,500 homes during summer months. Boulder City has about 6,400 households.

The deal, planned for a final vote Dec. 10, has been in negotiation since the summer of 2001, when power rates skyrocketed across the West.

"Some sanity has been reintroduced to the whole situation," said Ned Shamo, electric distribution superintendent for Boulder City. "But if the market was ever to go crazy like it did a year ago, we would have the opportunity to buy power at fairly decent prices."

Boulder City already pays about half the rates charged to the Las Vegas Valley, saving an average household anywhere from $700 to $1,500 annually, Shamo said.

According to the proposed agreement, power purchased from El Dorado Energy, a 480-megawatt plant about 17 miles southwest of the downtown, would be priced at about 5 cents per kilowatt-hour. The 105-acre plant is jointly owned by San Diego-based Sempra Energy and Reliant Energy, based in Houston.

The cheap power buy was first proposed in 1997 as part of the lease of 105 acres of city-owned land. El Dorado Energy pays the city $800,000 annually for the lease.

The El Dorado power would complement hydroelectric power purchased from Hoover Dam, which supplies about 70 percent of the city's use and costs 1 1/2 cents per kilowatt-hour. Most of Hoover Dam's electricity powers Los Angeles.

During the summer of 2001, when normal high power usage forced Boulder City to purchase a percentage of its power on the open market, the city paid as much as 30 cents per kilowatt-hour.

The new agreement will provide an extra power supply with relatively fixed, predictable rates, Boulder City Manager John Sullard said.

"It will be a sort of reserve," he said.

But the new power supply will not likely bring down utility rates, which the city raised in September. The City Council blamed the hikes in part on the artificially induced energy crisis of 2001.

Boulder City's low electricity rates are often a helpful selling point for seniors on fixed incomes, Cokie Booth, a local real estate agent, said.

"Absolutely, I tell them we have some of the lowest rates in the nation," Booth said. "But that's if you can find a house. There are less than 50 on the market right now."