Utilities reach settlement on power plant

Kevin Rademacher

Friday, Jan. 2, 2004 | 11:33 a.m.

Nevada Power Co. has reached a tentative settlement in a dispute with the owners of a new power plant being constructed north of Las Vegas.

Pinnacle West Energy Corp. of Phoenix and the Southern Nevada Water Authority earlier this year asked the Federal Energy Regulatory Commission to force the Las Vegas utility to delay by one year a deal to transmit power from the Silverhawk power plant they are building at the Apex Industrial Park.

That agreement was scheduled to begin July 31, 2003, but the plant is not expected to begin operation until this summer. Nevada Power countered that delaying the deal would hurt the firm financially because it had already made a significant capital investment to upgrade the transmission system.

The transmission agreement requires Pinnacle West to pay Nevada Power about $450,000 a month. The SNWA, which owns 25 percent of the plant, will pay about $150,000 under the agreement.

Pinnacle and SNWA said market rules should allow them to delay the deal by paying the equivalent of one month's fees, about $600,000 between the two parties.

Under the settlement, Pinnacle West would pay $138,000 a month and the SNWA would pay $46,000 a month for the period between July 31, 2003, and April 30, 2004. The formal transmission agreement will begin May 1.

"The offer of settlement represents a reasonable compromise of the positions of the parties in these proceedings," the proposed deal says.

Nevada Power has asked FERC for a quick review and approval of the deal in order to "allow all of these benefits to commence as soon as possible."