Power utility to join Utah supplier

Monday, Dec. 1, 2003 | 11:04 a.m.

Boulder City's municipal power utility is joining forces with a large Utah energy supplier to develop a power generating station that could secure low-cost electricity for residents for years to come, city officials said.

The irony of the Boulder City Council's unanimous vote last week to join the Utah Associated Municipal Power Systems to help develop a $2 billion plant is that Boulder City could wind up getting future power not from that source, but from Hoover Dam -- once the source of all of Boulder City's electricity.

Ned Shamo, Boulder City's electrical utility administrator, said by becoming a minor developer of a third power plant at the Intermountain Power Project in west-central Utah, Boulder City will be in a better position to negotiate for a share of a California power company's Hoover Dam energy allocation.

In exchange, Boulder City would trade an equal share of energy from the new IPP plant to the California entity that already has a direct current line from IPP's two existing plants -- something Boulder City does not have.

"It's all speculative right now," Shamo said of a potential deal with the Los Angeles Department of Water and Power or one of many other smaller Southern California energy suppliers that receive Hoover Dam allocations.

"This is part of our continuing efforts to provide sufficient energy at a low cost. As the town continues to grow, it only makes sense to take advantage of opportunities to have some ownership of our energy resources -- which we do not have now -- so we can better control future prices (of energy)."

In the early 1960s, all of Boulder City's energy came from hydroelectric power provided by neighboring Hoover Dam. The city at the time had a 20-megawatt capacity and provided 80 million kilowatt hours a year.

In the mid-1960s, Boulder City began getting more power from the Glen Canyon Dam in Page, Ariz. In the mid-1980s, Boulder City began buying additional power from Nevada Power, the private utility that provides energy to Las Vegas.

In recent years, Boulder City, like many other power suppliers, has had to purchase energy on the spot market during peak times of hot summer months.

Today, two-thirds of Boulder City's power still comes from the Hoover Dam and Glen Canyon dams. Boulder City now has a 52-megawatt capacity and provides 170 million kilowatt hours annually to its homes and businesses, Shamo said.

Boulder City's share from the new coal-fired 900 megawatt IPP plant would be 10 megawatts. However, Shamo said, because the direct current line goes through Henderson and Railroad Pass and bypasses Boulder City en route to California, Boulder City never would receive an amp of that power.

Shamo said Boulder City and a California power entity simply would exchange 10 megawatts, negating the need for Boulder City too make a costly investment to hook up to the existing line from Utah. Boulder City instead would get its trade-off energy from Hoover Dam's Mead Substation, Shamo said.

Because of the proximity of Hoover Dam to Boulder City, power customers there pay about half as much for electricity as Las Vegans, Shamo said, noting the cost per kilowatt hour in Boulder City is between 4 cents and a nickel.

Boulder City Attorney Dave Olsen said the deal that was approved at last Tuesday's public meeting will require Boulder City to pay $800 a month for about a year to help develop the plans, but does not commit the city to future -- and far more expensive -- construction costs.

"(The contract) is extremely flexible," Olsen said. "If we decide this plant will not best serve our needs, we can get out of it. If we do go ahead (and help pay to build it) the plant will help us meet our energy needs and not make us as dependent on buying on the spot market.

"It's a real positive thing for us."

On another energy issue last week, the Boulder City Council directed staff to have further talks with Distributed Generation Systems, which wants to build two testing towers in the Eldorado Valley to determine the feasibility of constructing a wind-generated electric plant.

While such a project would meet the Nevada Legislature's mandate that electric power providers obtain some of their resources from "green" or renewable energy, council members are concerned about part of the proposal.

Specifically, the company has told the City Council it will not go through the expense of building testing towers without a commitment from Boulder City to allow development of the project if the test data is favorable. Distributed Generation Systems has asked the city for three years to test the area.

Shamo said Boulder City officials are concerned that a better proposal may come along within three years, but that the land would be tied up by testing for a wind-generated electric plant that might not come to fruition.