NV Energy to partner with competitor on transmission line

By Stephanie Tavares

Monday, Jan. 11, 2010 | 3:53 p.m.

Nevada's largest electric company today announced it is abandoning its plan to build a transmission line from Las Vegas to Ely and instead will partner with LS Power on that company's planned line along the same route.

The two lines, both of which were initially planned to accompany failed coal fired power plants in Ely, have been competing for contracts from renewable energy developers and federal financing made available under the 2009 stimulus bill since the coal plant plans were scuttled.

Each would have run more than 200 miles from the Harry Allen substation north of Las Vegas to a substation just south of Ely. They would make it possible for the first time to move energy from one end of Nevada to the other and would make it possible for renewable energy developers to capitalize on central and eastern Nevada's vast solar, wind and geothermal energy resources.

But in a strategic move that developed over the past several weeks, NV Energy dropped its plans in favor of a 25 percent investment in LS Power's Southwest Intertie Project, which could eventually run along eastern Nevada all the way from Southern California to Idaho. Construction on phase one, the southern portion of the line, is expected to begin this summer and be completed in 2012.

Both lines would have cost about $500 million each to build, and NV Energy's investment with LS Power on the line will save ratepayers about $10 million over the life of the contract, NV Energy President Michael Yackira said.

"These were competing lines and it didn't make sense to build two," Yackira said. "We decided to get together and try to come up with a project that's less expensive for our customers."

In exchange for the investment, which still needs to be approved by the Federal Energy Regulatory Commission and the Public Utilities Commission, ratepayers would get a reduced and steadfast transmission rate and a guaranteed 600 megawatts of transmission from Harry Allen to Ely and the option to purchase at a set rate up to 200 megawatts of transmission capacity on the Intertie's northern line once it is built.

Both companies are currently negotiating with Western Area Power Administration for federal debt financing for their portion of the deal.