Gas supply, demand uneven, PUC told

Kevin Rademacher

Thursday, Feb. 24, 2005 | 11:01 a.m.

Executives with Sempra Energy on Wednesday delivered a gloomy outlook on the U.S. natural gas supply to the members of the state Public Utilities Commission.

The presentation was arranged by Jo Ann Kelly, the newest member of the PUC. She said her attendance at a recent gathering of utility regulators to discuss natural gas issues raised her concern over the 10-year supply of natural gas.

"It's a very important issue to the Nevada economy," Kelly said.

Greg Bartholomew, Sempra's vice president for gas strategy, said that the strong economy continues to consume vast amounts of natural gas. At the same time, production has been slipping since 2001.

"We've got a growing gap between supply and demand," he said.

While projections are down in domestic production areas, such as California and New Mexico, the strongest source of natural gas imports -- Canada -- has less to provide as its own economy picks up steam.

"Canada is unable to meet our demands," Bartholomew said.

He conceded that Sempra's projections are more dire than many government-sponsored projections, but he was skeptical of the more favorable outlook.

"I don't think they are totally telling the truth about what's really going on," Bartholomew said. "I don't really trust governments, and I don't really trust consultants. I only trust data."

Sempra also took advantage of the time to pitch its plan for an Alaskan liquified natural gas pipeline. That would deliver natural gas from Fairbanks to the port in Valdez where it could be shipped for West Coast consumption.

Mike Morgan, Sempra's vice president of special projects, said the pressure is on to establish the line now in order to prevent the influx of -- an ultimate depenence on -- foreign imports.

Kelly added that "now is the time" to begin preparing for natural gas supply issues.

Also at the meeting, the PUC approved three solar energy proposals.

Two are solar arrays that will be constructed on Nevada Power property. A 12 kilowatt array will be built at the company's Sahara Avenue headquarters at a cost of $150,000.

A 100 kilowatt array, at a cost of $800,000, will be constructed at the company's Clark Station power plant. That array will generate enough electricity to power 21 medium-sized homes in Southern Nevada.

The PUC had directed the company to undertake such projects last year when it approved the purchase and completion of the Lenzie power plant from Duke Energy.

The PUC also approved a deal between the utility and the Las Vegas Valley Water District to buy renewable energy credits generated by a planned solar array. Nevada Power executives said they would pay the water district $20 million over 20 years for the credits.

"While we are encouraging our customers to help us meet our renewable energy requirements, it's also important for us to take a leadership role," said Robert Balzar, director of Nevada Power's Energy Efficiency and Conservation Department.