Responsible Energy Policy Must Include Coal
By Roberto Denis, senior vice president, energy supply, Sierra Pacific Resources
While some parties in the energy policy debate have the luxury of simply advancing theories, Sierra Pacific Resources has a very real obligation to deliver electricity to every customer all day, every day.
Nevada’s population has grown at a record pace for decades, and during much of that time no power plants were built. The prevailing wisdom that it was cheaper to buy from others than to build your own unraveled during the 2000-01 Western energy crisis.
Nevada Power Company and Sierra Pacific Power Company have embarked on a comprehensive strategy to increase power generated in Nevada for Nevadans. By summer, we will have added more than 2,800 megawatts of efficient, natural gas power plants, increasing our dependence on gas to more than 70 percent. A key step toward diversification is the 1,500-megawatt, coal-fueled Ely Energy Center, planned for White Pine County, but it is not our only answer.
Renewable energy is another component of our strategy, and Nevada already is a national leader in solar and geothermal power. But claims that renewables can meet our energy needs alone are false. Solar and wind power are not available when the sun isn’t shining and wind isn’t blowing.
What will the Ely coal project ultimately do for Nevada? It will be our nation’s cleanest coal plant and allow retirement of decades-old plants, otherwise essential to meet energy needs. Its $600 million, 250-mile transmission line will have the capacity to move renewable resources to state population centers. Without affordable coal power as an anchor, such transmission for renewables alone is economically unrealistic. Together, these will result in a smaller carbon footprint for Nevada.
Responsibility dictates that every option must be pursued to meet Nevada’s energy demands. This is not about posturing; it’s about a realistic solution for our future.
It’s All About the Money
By Timothy Hay, former member of the Nevada Public Utilities Commission and Nevada State Consumer Advocate
The Ely Energy Center, the massive new coal-fueled electric generating plant proposed by Nevada Power, will burden Nevada’s ratepayers and the company’s shareholders for decades. The utility estimates the cost at $5 billion dollars if built today. The total market capitalization of Sierra Pacific Resources, the parent company, is less than $2.5 billion dollars, and the company is only now recovering financially from the imprudent decisions of its management during the western energy crisis which nearly caused bankruptcy. A massive coal-fueled plant will prove to be equally imprudent. Other companies such as Dynergy also propose to locate large coal-fired plants in Nevada that will do nothing more than exploit our clean air and water so they can export power to markets outside of Nevada.
The cost of constructing coal generating plants has doubled in the last several years. The cost of coal itself is also predicted to rise substantially according to the financial projections. Finally, on a bipartisan basis, each of the leading presidential contenders has proposed that dramatic reductions in carbon emissions will be a policy priority of the next administration. Thus, from an economic perspective, the plan appears to be a $5 billion dollar coal boondoggle. Nevada can chart a wiser course.
Improving the Nevada transmission system, particularly linking existing resources from northern to southern Nevada, will increase its functionality, reduce the need for some future generation, and will promote development of stable geothermal resources never subject to fuel price escalation or climate change concerns. Nevada can, and should, lead the nation in developing renewable energy resources that are free from fuel cost increases.
The delay in construction of the Ely Energy Center will give Nevada the opportunity to reevaluate options and point the way to the energy future instead of relying on the technologies of the past.