Utility revives plant construction

Kevin Rademacher

Friday, Oct. 22, 2004 | 11:01 a.m.

Nevada Power Co. on Thursday announced that construction has been revived at a 1,200-megawatt power plant about 20 miles north of Las Vegas.

The Las Vegas utility completed the purchase of the half-finished plant from Duke Energy this month. The total cost to buy and finish the plant is estimated at about $558 million.

California-based Fluor Corp. has been hired to complete construction of the plant that the company has dedicated as the Chuck Lenzie Generating Station. Duke had dubbed the plant Moapa. Walter Higgins, chief executive of Nevada Power's parent company, Sierra Pacific Resources, said the company quickly decided to rename the plant after Lenzie, who worked for Nevada Power for 25 years, including serving as chief executive from 1989 to 1999.

At an event dedicating the new plant, Roberto Denis, Nevada Power's vice president for energy supply, said the company is attempting to have the plant fully operational three months ahead of the June 2006 timetable set by state regulators.

"We are going to do everything possible to beat that schedule," he said. "The benefits are just too powerful not to redouble our efforts."

Denis said that with the greater efficiency of the new plant the company expects to save $15 million in the summer of 2006 alone.

In other news, Higgins pointed to the Wednesday announcement by Moody's Investors Services that it had improved the outlook for Sierra Pacific and its subsidiaries to stable from negative.

Moody's did, however, leave the company's credit rating at junk levels. The outlook was originally downgraded to negative after a September 2003 bankruptcy court ruling ordering the utilities to pay Enron Corp. more than $300 million for dubious contracts signed during the Western energy crisis.

Earlier this month, a federal appeals court judge vacated that order, sending it back to bankruptcy court for review.

"In general, the company is in a better position today," Higgins said.

Moody's noted the appeals court ruling, favorable regulatory rulings and positive debt refinancing moves.