Gas ‘peakers’ set to kick in when weather sizzles

By Phoebe Sweet

Monday, May 19, 2008 | 2 a.m.

Just in time for the triple-digit heat, Nevada Power Co. expects to have the first phase of a $404 million project in the heart of Clark County ready to help keep air conditioners whirring.

If you’ve driven along U.S. 95 near Sunset Road lately, perhaps you’ve noticed the heavy equipment, crews of construction workers or giant gas turbines similar to jet engines arriving at the site. Even if you haven’t, you may know Clark Generating Station as the place where three solar panels sprang up in 2006.

The power plant has been there since the ’50s, when it was built to supplement electrical output from Hoover Dam, and until the solar equipment was installed had relied entirely on burning natural gas to make electricity.

In the past five decades, neighborhoods have grown up around the once isolated plant, a burgeoning population needing ever more electricity.

Over the past year the power company has demolished old gas-burning units capable of providing enough power for 130,000 homes and replaced them with 600 megawatts of state-of-the-art gas “peakers” that can generate enough electricity for 450,000 homes. They’re called peakers because they are intended to kick in and provide a boost of electricity during peak use times — on the hottest days of the year, for example.

Although they will provide more than three times the electricity of the old units, they will emit less pollution, according to the company.

Instead of running constantly in a sort of stand-by mode, the peakers will shut down when they’re not needed, saving on fuel costs, which are passed on to consumers. The new units take only 10 minutes to turn on, compared with half a day for the old plant, which was unable to start up in a hurry if demand suddenly spiked on a spring day.

Dariusz Rekowski, plant director, said half of the first 200-megawatt block, made up of four peakers, is expected to begin powering Southern Nevada homes this week. Each unit has two jetlike engines. Another 200-megawatt block will come online this summer, and a third near the end of the year.

The construction cost will be paid by consumers over the 40- to 50-year lifetime of the plant. Nevada Power will include the cost of the plant in the general rate case to be filed in late 2008, which would take effect in July 2009.

Until then, the utility is unable to estimate the effect on electric bills, spokesman Mark Severts said. But if Nevada Power were to divide the cost of the plant equally among its 807,000 accounts and bill them immediately, it would cost each customer about $500.

The company is also spending $60 million upgrading a 480-megawatt combined-cycle gas plant at the Clark Generating Station to reduce nitrogen oxide pollution as part of a settlement with the federal Environmental Protection Agency.

The EPA alleged that Sierra Pacific Resources, Nevada Power’s parent company, should have installed new pollution controls when it updated its turbines in 1992. Sierra Pacific Resources settled with the EPA last summer, agreeing to pay $300,000 in fines and committing to install a $400,000 solar collector at the Vegas PBS television station in addition to retrofitting the plant. The settlement was one of two between the company and the EPA last year.

Typically the state’s Public Utilities Commission allows the cost of plant upgrades to be passed on to ratepayers, while fines and other settlement costs are borne by investors.

Overall, between the new construction and upgrades, air pollution from the plant will be reduced by 46 percent and its energy production will increase by 65 percent, officials said. Before upgrades and new construction, the plant coughed out about 15,000 tons of federally regulated pollutants each year. Once all three sets of peakers are online at the end of this year, the plant will release 8,100 tons a year of those pollutants, including nitrogen oxides and tiny dust particles.

Sierra Pacific Resources says these peakers are part of a new generation of power plants it has built and bought since the Western energy crisis struck early this decade. It says using natural gas will at least lessen the amount of expensive power it has to buy from the open power market when demand is high in the summer.

“There is so much demand in the Southwest ... that the price of purchased power gets really expensive (during the summer),” said Kirby Lampley, director of regulatory operations for the Nevada Public Utilities Commission. “In 2000 and 2001, the company ran up huge amounts of debt to pay for the power needed to supply the Las Vegas Valley.”

Since air-conditioning is a necessity rather than a luxury during scorching summer days, demand for electricity in Southern Nevada during the hottest times of the year is more than double winter demand.

Still, natural gas has some price volatility too, and Nevada Power executives and regulators alike say the price will continue to increase. Lampley and Paul Maguire, a Public Utilities Commission electrical engineer, said purchased power also comes almost exclusively from natural gas plants.

“The gas cost is the same regardless of who is running the unit,” Maguire said.

Roberto Denis, vice president of energy supply for Sierra Pacific Resources, has said a $1 increase in the price of natural gas over a year costs Southern Nevada electricity consumers $100 million.

Some renewable energy advocates say peakers can be replaced by solar power plants, but John O’Donnell, executive vice president of solar thermal developer Ausra, said gas peakers will continue to play an important role in supplementing utilities’ power supply during hot summer days. At least, that is, until Congress renews tax credits for renewable energy investment and development, which it is expected to do this month, and large commercial solar plants that can store energy come online in the desert.

O’Donnell said solar plants even now provide energy during peak hours, when it’s most valuable, and offset emissions from traditional fossil fuel plants. He said utilities should look ahead two to three years to when solar plants will be in greater demand, and start the five- to six-year process of building them now.

Although utility executives say solar can’t get the job done — because it isn’t always available and is too expensive to replace gas — O’Donnell said commercial solar thermal plants the size of coal plants and featuring hours of storage aren’t far off.

As the price of gas continues to rise, energy from solar plants, which operate on free fuel, will seem like a bargain. Add in the price of potential congressional carbon legislation, which will affect natural gas plants as well as coal plants, and solar will seem cheap indeed, he said.

But for now, the utility says, solar can meet demand only from noon to dusk. Just as solar plants are winding down production for the day, Las Vegans are heading home and turning up air conditioners and lights.