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Sean Whaley

Casino operators want options to $965M power plant

8 October 2015

CARSON CITY — Southern Nevada hotel-casino operators are asking state regulators to mandate that Nevada Power provide detailed information on other competitive options to contrast with the utility company's preliminary proposal to build a new $965 million gas plant to meet Southern Nevada's future energy needs.

Unless Nevada Power, which is part of NV Energy, is required to provide the information, the Nevada Public Utilities Commission will not be able to assess possible alternatives to the 707-megawatt project, said Mark Garrett in testimony filed behalf of the Southern Nevada Hotel Group. Garrett is president of an Oklahoma City firm specializing in utility regulation.

A number of groups have expressed concerns about the construction of such a plant by 2020 because of the impacts on ratepayers.

Nevada Power is asking for $2.4 million to explore the potential of such a project over the next few years as part of its 2016-18 resource plan.

The plant is being considered as an option in part because Nevada Power is letting its 570-megawatt purchase agreement with the Griffith Energy Plant, part of Star West Generation, expire in 2017. The gas-fired plant is located in Kingman, Ariz.

Malcolm Jacobsen, president and CEO of Star West, has said extending the agreement with his company, or having Nevada Power purchase the plant, which provides power to Southern Nevada residents during the peak summer months, would be a cheaper alternative for ratepayers than construction of a new plant. The offered purchase price has not been disclosed.

A witness for the Alliance for Solar Choice agreed, noting that if Nevada Power builds its own plant, ratepayers will be paying for electricity being generated at the facility year-round rather than with the Griffith plant agreement providing power only in the summer months when it is needed.

George Evans, president of a consulting firm based in North Carolina, said a new plant will "commit ratepayers to paying the costs of the facility (and a return to NPC) for the expected life of the facility some 35 years into the future."

A study performed for the conservative think tank Nevada Policy Research Institute that was released Tuesday made a similar finding.

Garrett said the current filing by Nevada Power is incomplete because there is no information about alternatives to building the new plant, and the PUC should require the utility to provide the information so an informed decision can be made.

The need for the plant — or replacement power from other sources — remains uncertain as three large gaming companies, Wynn Las Vegas, MGM Resorts International and the Las Vegas Sands Corp., are seeking to leave as Nevada Power customers. The companies represent about 7 percent of Nevada Power's customer load.

The next hearing on the plan is Oct. 26.