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September 18, 2014

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Reid Gardner plant discussion turns to how much consumers should pay

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Sam Morris

A Union Pacific train unloads its coal Friday, Dec. 10, 1999 at Nevada Power Company’s Reid Gardner power station near Moapa.

Reid-Gardner Generating Plant

Reid Gardner Station, a coal fired power plant in Moapa, is shown on Friday, Dec. 7, 2007. Sierra Pacific was fined a million dollars and required to install $85 million worth of new pollution control technology at the plant. Launch slideshow »

Shutting down the coal-fired Reid Gardner power plant in Southern Nevada and getting additional power sources could cost an estimated $1 billion, according to the state Bureau of Consumer Affairs.

Dan Jacobsen, technical staff manager for the bureau, said Monday that residential customers of NV Energy should pay only a fraction of that cost.

His statement came at the beginning of a hearing of the state Public Utilities Commission regarding rules that would be enforced to support the law passed by the 2013 Legislature that required the closure of the plant.

Shawn Elicegui, associate general counsel for NV Energy, told Commissioner Rebecca Wagner that three units of Reid Gardner would be closed by the end of 2014.

He said NV Energy prefers to retire the fourth unit at Reid Gardner by 2017. But the California Division of Water Resources owned a share of the plant.

Wagner, the commissioner hearing the case, said this was a “very complicated" rule-making process to comply with the bill to shut down the coal-fired plant, accused of causing major pollution.

Wagner said the rule must include the retirement, replacement of lost energy and cost recovery.

“It’s very unclear how this will all work,” she said at the hearing, attended by about 50 representatives of various interests.

She said she hoped to have a preliminary regulation within one month.

In prefiled testimony, the consumer bureau wrote that the cost of the closure and switch over to renewable energy should be based on the total electric consumption of the customer rather than the more expensive peak use of power. Using this cost analysis would save residents $82 million.

“It should be noted that large commercial customers supported the passage of SB123 at the Legislature,” bureau representatives said. “It is fair that they bear a proportionate share of the incremental costs that are caused by this policy to reduce carbon emissions.”

Barry Gold, representing AARP, urged the PUC to include “strong residential rate protection” in its rules.

But other witnesses told the commission that the law does not include any language on how the rates should be set. They said this rate-setting technique should not be part of the rules.

The staff of the PUC suggested that if NV Energy switches to natural gas energy, the rules should show “an estimate of the cost to the ratepayers and a cost benefit.”

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