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November 24, 2014

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ENERGY:

Access to more natural gas may bring down bills

Pipeline expansion will help local utility plants keep costs down

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A planned expansion of a natural gas pipeline in northern Utah could lower a surcharge on Las Vegas Valley electric bills by the end of next year.

That’s because about 70 percent of Southern Nevada’s electricity is generated by burning natural gas, and the expansion will allow for more natural gas to flow to Southern Nevada from Wyoming, which provides the cheapest wholesale gas to the region.

The additional natural gas that will come through the Apex Expansion Project, 266 million cubic feet a day, is under contract to NV Energy, which plans to use it to fuel power plants.

Most of the electric company’s natural gas comes from either Wyoming or Utah. The company wouldn’t provide more specifics.

Utah’s price is about 3 percent higher than Wyoming’s. NV Energy also gets some gas from Colorado, where the price is about 4 percent higher than Wyoming’s.

The pipeline, planned by Salt Lake City-based Kern River Transmission, headed into the home stretch of obtaining permits last month.

Kern River’s Apex pipeline network collects natural gas near Opal, Wyo., for markets in Las Vegas and Southern California. The company is to add a 28-mile pipeline to run parallel to one through the Wasatch Mountains.

In addition to providing Southern Nevada with a cheaper source of natural gas, the expansion should mean more natural gas will be available to all of Southern Nevada’s natural gas plants during peak demand times.

Without an expansion, NV Energy would have to buy from more expensive sources when demand is highest.

“This will help us generally take advantage of lower natural gas prices coming out of the Rocky Mountain region and pass those savings on to our customers,” NV Energy spokesman Mark Severts says.

All fuel costs for power plants are passed on to ratepayers. If NV Energy can buy natural gas for its plants more cheaply, it means savings for ratepayers. But what dollar difference this expansion will have on electric bills remains to be seen.

The Federal Energy Regulatory Commission released the expansion’s draft environmental-impact statement last month. It said the addition of the twin pipeline “would result in some adverse environmental” effects in northern Utah. However, the effects can be reduced to “less-than-significant levels” with measures proposed by the company and suggested by the commission, according to the document.

Kern River has pledged to avoid disturbing stream flows when it buries the second pipeline through a 28-mile section of central Utah, says Chris Bias, the company’s director of expansion projects.

That will make the construction job harder, he says.

Public hearings are set for later this month in Bountiful and Morgan, Utah, and public comment will be heard until May 17, but little opposition to the expansion has surfaced, mainly because it’s an add-on. Environmental groups in Utah say the project’s anticipated effects weren’t significant enough to make it a high priority. Instead, they’re focusing on projects with bigger footprints in unspoiled or fragile ecosystems, the Utah chapter of the Sierra Club and environmental group Save Our Canyons say.

The energy commission is expected to issue a final environmental-impact study this summer and a ruling this fall. Construction is expected to begin in January and be completed by November 2011.

For more information or to read a copy of the draft environmental report, go to tinyurl.com/fercapex.

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