REID’S WILY POWER PLAY

By Phoebe Sweet

Saturday, Oct. 6, 2007 | 1:41 a.m.

From utility executives to environmentalists to politicians, everyone agrees that renewable energy will play a major role in Nevada's future.

But getting stakeholders to agree on how to move away from fossil fuels and begin taking advantage of abundant solar, wind and geothermal power resources in the state is difficult.

That's because there is no consensus on how to provide the bridge between today's fossil fuel-powered reality and the renewable-energy future. Lack of transmission lines has long been the stumbling block for clean energy developers.

And coal has become the deep dark center of the debate.

Utilities sees coal as the means of paying for transmission lines that would ship renewable energy from its source s to Las Vegas.

Environmentalists and renewable industry insiders, on the other hand, say coal is not the answer. The state's largest utility, they say, can and should develop enough renewable power sources - solar, wind and geothermal - to meet Nevada's growing needs and pay for transmission lines to deliver power from the remote areas where the renewables are to cities.

Sen. Harry Reid, D-Nev., who has become a major critic of coal, last month filed a bill that would split the difference - earmarking $10 billion for federal utility authorities to pay for transmission from renewable energy-rich, rural areas. But the bill requires that 75 percent of the capacity of all new transmission lines that cross federal land be reserved for renewable energy.

The rub is, under the proposed legislation, the utility would have to build a massive transmission line at tremendous cost or scrap plans for coal.

Reid this summer came out in opposition to plans for a 1,500 megawatt coal plant in eastern Nevada, as well other plants proposed by developers that would sell power on the open market.

But Reid and his supporters say that , rather than just demonizing coal, the proposed legislation offers alternatives. For one, it would provide a means of paying for transmission lines from designated renewable energy zones if private companies do not.

Renewables developers and customers would pay back the money over 50 years.

It would also effectively halt plans for coal plants in Nevada, given the requirement that new lines crossing federal land carry mostly renewable energy. Because more than 85 percent of land in Nevada is federal, virtually any transmission built in the state would have to comply with the regulation.

To build a large coal plant, Sierra Pacific Resources, the parent company of Nevada Power Co., would have to build a massive transmission line with four times the capacity of the plant. That much transmission capacity could cost as much as the plant itself.

But Jon Summers, a spokesman for Reid, said the state's utilit ies shouldn't need coal once new transmission lines are constructed. He said the line from eastern Nevada to Las Vegas would a carry the same price tag - $600 million - as two years ' worth of fuel needed to power the three coal plants proposed for Nevada.

Michael Yackira, president of Sierra Pacific Resources, said it is economically unrealistic to reserve 75 percent of a costly transmission line for renewable energy that is available only when the wind is blowing or the sun is shining.

Yackira agreed, however, with Reid's assessment that there are more than 1,000 potential megawatts of geothermal power, which is available 24 hours a day, in Northern Nevada. But he says it wouldn't meet Nevada's demand for electricity without help from a large coal-fired power plant, and couldn't be developed in time to meet growing need.

Nevada Power owns only half of the generation capacity needed to meet Southern Nevada's more than 6,000-megawatt peak summer demand, and meets the rest of the need by buying power on the open market.

"There isn't a sufficient amount of renewable energy in this state to meet the demand that's necessary," Yackira said.

Environmentalists and renewable energy developers disagree.

Paul Thomsen, public policy manager for Reno-based geothermal developer Ormat, said at least 1,500 megawatts of geothermal energy - enough to power more than 1 million homes at any time - are available in Northern Nevada.

The Western Governors' Association says not only are 1,500 megawatts of geothermal available, but concentrating-solar-thermal-power plants and wind farms generating thousands of megawatts could be developed in Nevada by 2015.

Tom Darin, a renewable energy attorney for environmental group Western Resource Advocates, said developable wind, solar and geothermal could provide 80 percent of the state's energy if transmission were available.

Sierra Pacific Resources argues that 1,500 megawatts of coal will help balance Nevada's energy portfolio. The utility relies on expensive natural gas-fired power from its own plants and the open market for 70 percent of its power. The company now gets 21 percent of its energy from coal. By 2015, after its plant near Ely is complete, it will get 46 percent of its energy from coal and 20 percent from renewable resources and energy efficiency measures.

The utility, the Nevada Public Utilities Commission and Gov. Jim Gibbons have said coal is an important part of a diverse energy portfolio for fast-growing Nevada.

Darin counters that because the company gets only about 9 percent of its energy from renewable resources, including energy efficiency programs, it should focus on boosting that percentage before adding coal.

Ormat's Thomsen said the requirement that renewable energy dominate on new transmission lines is an important part of Reid's bill because it would prevent utilities from reneging on promises to reserve space for renewables when cheaper coal is suddenly available.

Thomsen said $10 billion is not enough to fund all the needed transmission projects, "but it's a good start." And when renewables developers don't have to pay for costly transmission lines by themselves , it will bring down the price of wind and solar power, he said.

Yackira said making development of coal more costly, whether with transmission legislation or a carbon tax, isn't the same as investing in technology that would lower the price of renewable energy.

"You're making (renewables) competitive" with coal, Yackira said. "It doesn't mean you're lowering the price."

Charles Benjamin, director of the Nevada office of Western Resource Advocates, said this wouldn't be the first time the federal government has stepped in to develop transmission. It did so in the last century, by building lines to power rural areas, so it should now step in to boost renewables.

"The public wants clean energy," Benjamin said. "But we're going to have to do more than want it."