Benjamin Grove

Wed, Jun 29, 2005 (11:16 a.m.)

WASHINGTON -- If Congress ultimately accepts the energy bill approved by the Senate on Tuesday, the legislation could spur more development of solar, wind and geothermal energy in Nevada, the state's senators said.

The state has long been considered the perfect one in which to develop renewable energy. But obstacles -- mostly high development costs and production uncertainty risks -- have prevented energy farms from sprouting across the Nevada desert.

The Nevada Legislature in 2001 set an ambitious plan that required 15 percent of the state's energy to be produced by renewable sources by 2013. The state was required to phase in the plan, with 7 percent renewable use by this year.

But power companies, including Nevada Power, have not met the goals. Southern Nevada has no major renewable energy plant in development, except for a 50-megawatt solar plant near Boulder City, which has been beset by financial delays.

A number of other solar and wind proposals have hit financing and technical snags, said Nevada Power vice president for generation and energy supply Roberto Denis said. Some analysts have said part of the problem was the company's low bond rating, which kept developers away.

"Contracts have faltered and not come to fruition for various reasons," Denis said.

But Nevada Power received 70 proposals since issuing a new request for proposal in May, Denis said. Federal tax credits like the ones found in the Senate bill would help drive development, he said. Nevada Power will do its part to get the state to its 2013 goal, he said.

"It's not just a situation of I think we can -- I know we will," Denis said.

The Senate bill extends a key production tax credit for new plants that are running by Jan. 1, 2009.

That may be just the incentive utility companies need to encourage new development, renewable advocates said.

The bill includes a renewable energy production tax credit that could prod developers to construct new geothermal plants, said Karl Gawell, executive director of the Geothermal Energy Association. The bill would allow developers to claim the tax credit for 10 years for all plants built and running by Jan. 1, 2009.

Geothermal plants mine heat from deep underground to produce energy. Nevada could hold the most geothermal energy in the nation, with untapped potential of 2,500 to 3,700 megawatts of electricity, according to the Energy Department. One megawatt powers roughly 1,000 homes.

Currently Nevada's 14 geothermal plants produce roughly 240 megawatts, which amounts to 9 percent of Northern Nevada's electricity, according to the department.

"If you don't see 20 to 30 new plants (in Nevada) in the next three years, I would be surprised," Gawell said.

The Senate bill also creates a federal loan guarantee program that would help make solar energy development more affordable, and that may be enough to lead to new solar plants in Nevada, said Rhone Resch, executive director of the Solar Energy Industries Association.

"Nevada has some of the best solar resources in the world," he said.

The proposed 50-megawatt solar plant that was to be developed outside Boulder City by Solargenix has been stalled as the company arranges for financing. A company spokesman was unavailable for comment.

State officials hope Congress can ultimately agree to extend renewable tax credits and other incentives. Las Vegas energy consumption has risen 5 percent each year in recent years, said Pete Konesky, acting director of the Nevada State Office of Energy.

Part of the development problem is a lack of transmission infrastructure where power sources exist -- in remote areas, Konesky said. He lamented that the state still has no major wind farm.

"Anything we could get would be more than we have," he said.

Sens. Harry Reid, D-Nev., and John Ensign, R-Nev., praised the Senate version on Tuesday and said the legislation could pave the way for Nevada to lead the nation in renewable energy production. Reid has called Nevada "the Saudi Arabia of geothermal energy."

Renewable energy plants would provide desperately needed jobs in rural Nevada, the lawmakers said.

"This energy plan provides tremendous benefits to the people of Nevada," Ensign said. "It is not only a strong commitment to the development of renewable resources but new technology as well."