Nevada Power to cough up $60 mil. in latest settlement

Phoebe Sweet / Staff Writer

Saturday, Aug. 4, 2007 | 7:42 a.m.

For the second time this year, Nevada Power has settled with the EPA after being accused of air quality violations at one of its Clark County power plants.

Nevada Power agreed last week to spend $60 million on advanced burner technology to reduce nitrogen oxide emissions at the Clark Generating Station in Las Vegas. The company, a whole owned subsidiary of Sierra Pacific Resources, will also pay a $300,000 fine to the Environmental Protection Agency and contribute $400,000 to Vegas PBS to construct a photo voltaic solar array at its planned Educational Technology Campus.

In April the utility agreed to spend $90 million to upgrade the Reid Gardner plant in Moapa after the EPA alleged it was violating air quality standards and support Clark County School District conservation programs.

The alleged violations stem from improvements made to the Clark Station's turbines in 1992. Clark County's air quality division, the permitting agency, at the time determined that the work did not require new permits and pollution control updates.

But the EPA later said it believed the improvements triggered a so-called new source review, which requires power companies to make pollution control improvements at plants once they upgrade them.

A spokesman for the EPA could not be reached for comment this week.

Although Nevada Power maintains that they did not need the permits, Roberto Denis, chief financial officer of Sierra Pacific Resources, said the utility settled with the EPA as part of an effort to focus on creating new power generation in Nevada rather than fighting old legal battles.

"We should be looking forward to building more generation in the state and concentrating on being owners and operators of generation," Denis said last week. "We can't do that if we're concentrating on the past and ... trying to argue about what happened in the past."

Denis said litigation would take time and resources the utility needs to focus on new power plants.

Nevada Power will upgrade four generating units at Clark, although only two were alleged to be in violation.

The improvements will decrease the nitrogen oxide emission by more than 2,000 tons per year, according to Robert Folle, Clark County air quality compliance manager.

"That's certainly a win for Las Vegas and definitely a win for clean air," Folle said. Although he said Clark County supported Nevada Power's position that it did not need additional permits at Clark, he said the county was glad that "instead of fighting it and spending more money, they just agreed to the consent decree and were willing to be proactive and do what's good for clean air in Las Vegas. We certainly support that."

He said the reduction from about 75 parts per million of nitrogen oxide to about 5 parts per million in emissions will help improve the valley's haze problems and would be good for the air at the Grand Canyon.

Denis said Nevada Power is concerned with the regional haze problem, which is caused by traffic in the valley as well as power plants.

"This is the air that we breathe, this is the tourism that we're trying to attract," Denis said. "It's good business to have good air in this area that is such a tourist attraction."

The four units being upgraded were built in 1979-82, and will be in service until 2024, Denis said.

Although shareholders will absorb the cost of the fine and donation, Nevada Power will recover the cost of the $60 million in improvements from ratepayers in a future rate case.

The new emissions controls were included in the utility's 2006 Integrated Resources Plan, which was approved by the Nevada Public Utilities Commission.

The improvements are expected to be complete by 2008-'09.