Mesquite power plant will use natural gas instead of coal

By Stephanie Tavares

Tuesday, March 9, 2010 | 5:15 p.m.

Mesquite Mayor Susan Holecheck is announcing tonight that the power plant planned for her city will be fueled with natural gas instead of coal.

Holecheck got the news from developer Sithe Global just in the last couple weeks, following a story in the Las Vegas Sun. She said she felt it wasn't right to keep the news from residents.

"I've kept it to myself for a while so they can get some things straightened out with BLM, but I thought that people here would expect me to tell them if I knew something like this," she said. "We're delighted with prospect of the jobs this plant will create. And it's in keeping with a desire in Nevada and across the country for cleaner energy."

In order to switch back to a natural gas plant, the company would have to submit a letter to the Bureau of Land Management withdrawing its application to build the coal plant. The BLM hasn't yet received one, officials said.

If Sithe goes through with the change, it will mean reverting to a plan hashed out almost a decade ago. The company got approval from the BLM in 2003 to build a 1,100-megawatt natural gas plant on the site. But natural gas prices became volatile and rose substantially. They were expected to remain unpredictable well into the future. In 2007 the company proposed changing the plant to a 750-megawatt coal-fired power plant.

Sithe Global Power planned to have the Toquop Energy Project completed and generating relatively cheap electricity by 2013. But the project ran into problems within months of announcing the switch to coal. Support for coal power in the U.S. Decreased amid growing environmental concerns and politicians began proposing a tax on greenhouse gas emissions.

Planned coal plants around the country, including two in Ely, fell to political pressure and worries that a carbon tax would make the coal plants unprofitable.

In 2008 the company backed out of its water supply contract, citing delays in permitting the project. By the end of that year, natural gas prices had stabilized as new forms of natural gas extraction became financially feasible, opening up vast new domestic supplies.

The announcement from Mesquite comes after all three of the company's planned coal-fired power plans ran into major bureaucratic hurdles. A proposed coal power plant in New Mexico had its air quality permit rescinded by the EPA, another in Pennsylvania was rejected for a government backed loan guarantee and the Bureau of Land Management sat on the Environmental Impact Statement for the Toquop plant for months after it was expected to be released.