UTILITIES: Coal plant plans fade across U.S. - Business

PRINT THIS Popular

Jan. 04, 2008
Copyright © Las Vegas Review-Journal

UTILITIES: Coal plant plans fade across U.S.

Push for three facilities moves ahead in Nevada despite trend

By JOHN G. EDWARDS
REVIEW-JOURNAL

Click image for enlargement.

Regulators and developers are stopping development of coal-fired power plants around the country as plans for three separate billion-dollar projects are being pursued in Nevada.

The National Resource Defense Council counts 26 projects "scrapped" since March 2006.

Most Popular Stories

Mayor calls Lady Luck casino 'carcass'

CASINOS IN COURT: Testimony heard in Wynn case

Consolidated Resorts files for Chapter 7 bankruptcy

Players turned away at WSOP

Fontainebleau files motion to leave offices

Area economy hits 'pause' period, economist says

NEVADAN AT WORK: Local gaming veteran sees opportunity in small Henderson casino

ONLINE GUY: Palm Pre promising but not ready to replace Apple iPhone in pocket

Las Vegas investor seeks approval of Riviera ownership stake

GAMING BEYOND NEVADA: Sands: Macau back in play

Charles Benjamin, director of the Nevada office of Western Resource Advocates, argued that other utilities around the country are dropping coal plants because of uncertainty over how much it will cost to comply with expected federal regulations on carbon emissions, which scientists say leads to global warming. Coal plants throw off twice the carbon dioxide coming from gas-fired plants for each unit of electricity.

In addition, Benjamin said utilities see costs of coal plant construction escalating.

Yet, Nevada Power Co. of Las Vegas and Sierra Pacific Power Co. of Reno continue pursuing development of the $3.8 billion, 1,500-megawatt Ely Energy Center and a related transmission line.

Roberto Denis, senior vice president of Sierra Pacific Resources, said he is less concerned about the unknown future cost of carbon dioxide emissions from a coal-fired power plant than the risk of remaining dependent on natural gas.

"In my opinion, (the risk of costly carbon dioxide regulations) is no greater in significance than the volatility in natural gas prices can have on our consumers," Denis said.

A large portion of the Nevada Power rate increases in the last few years stemmed from spikes in natural gas prices.

Nevada utilities face a unique situation, Denis said, because the power companies in Nevada depend on natural gas for 75 percent of their power. Building a coal plant would provide some diversity in the fuel mix at Nevada utilities, lowering the size of rate increases that result when gas prices soar, Denis said.

Utilities in other states, such as Utah, already have diversified their fuel mix by building coal plants, Denis said.

State consumer advocate Eric Witkoski said he is worried the cost of power from the Ely plant could skyrocket, causing a similar increase in power rates: "We do need to take a fresh look (at the Ely coal project) to see if the landscape has changed and the risks."

The Public Utilities Commission authorized Nevada Power and Sierra Pacific Power to spend up to $150 million developing the project, plus another $150 million after the utilities obtain an air quality permit from the Nevada Division of Environmental Protection.

However, the utilities must return to the commission next year for approval to spend more than $300 million. In addition, the commission has ordered the utilities to get an independent review of costs.

The $300 million approved budget is relatively small, Witkoski said, when compared with total project costs that could soar to $4 billion or $5 billion.

In addition to the regulated utilities, two independent power producers propose coal-fired power plants in Nevada. LS Power Group is developing the 1,600-megawatt, $2.5 billion White Pine Energy Station also near Ely. Sithe Global Power proposes to build a 750-megawatt, $1.3 billion plant northwest of Mesquite. The independent companies are taking the risk that they will be able to make a profit through wholesale sales of generation from their power plants. As regulated utilities, Sierra and Nevada Power will look to customers to pay for costs of power from the Ely center.

PacifiCorp, which operates as Rocky Mountain Power in Utah, recently underlined concerns about building more coal plants, given the move in Congress to regulate carbon dioxide gas emissions.

"Within the last few months," PacifiCorp told the Utah Public Service Commission, "it has become apparent that Congress will enact some restriction on carbon emissions, but the projected cost impact on new coal generation is within such a wide range as to make meaningful risk assessment futile."

Because of concerns about carbon dioxide regulation, PacifiCorp suspended plans for two additions to the Jim Bridger generating facility near Rock Springs, Wyo. It previously planned a 527-megawatt pulverized-coal plant and a 500-megawatt coal-gasification demonstration project.

The company also set aside plans for a 340-megawatt share of a new 900-megawatt coal unit proposed at the Intermountain Power Project near Delta, Utah.

The company said it continues to consider coal generation a potential option in the next 20 years, but not for the next 10 years.

The company built projects were "benchmark options" for its 2012 request for proposals. The benchmarks projects enable PacifiCorp to evaluate the economics of proposals from other companies. In addition, PacifiCorp could build the benchmark plants if utility development appeared most attractive.

The decision to shelve coal projects for now is "'not a wholesale statement on whether coal power is good, bad or indifferent," PacifiCorp spokesman David Eskelsen said.

PacifiCorp sees wind power and gas-fired plants as better options for Utah now.

In another venue, PacifiCorp last month told the Oregon Public Utilities Commission that 550-megawatt and 600-megawatt coal plants were "no longer viable options," according to NRDC.

Benjamin said costs of coal-fired power plants are escalating, as India and China build coal projects and drive up demand for coal plant components.

"The cost of natural gas facilities clearly is moving up faster than the cost of coal equipment," Denis said. "The cost of coal equipment may be going down because of all the cancellations."

Contact reporter John G. Edwards at jedwards@reviewjournal.com or (702) 383-0420.

Share & Save

Leave Your Comment	12 Reader Comments
Terms & Conditions The following comments are provided by readers and are the sole responsiblity of the authors. The reviewjournal.com does not review comments before publication nor guarantee their accuracy. By publishing a comment here you agree to abide by the comment policy. If you see a comment that violates the policy, please notify the web editor. Some comments may not display immediately due to an automatic filter. These comments will be reviewed within 48 hours. Please do not submit a comment more than once.
Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. Vegas Vic wrote on January 05, 2008 03:28 AM: Liking nature is one thing. Putting it on a pedestal and worshiping it like nothing else matters borders on insanity. And there are too many "ecologists" who use radical means to class them as anything BUT eco-terrorists. As for a nuclear accident, the technology has progressed FAR BEYOND the TMI plant. As Beytovin noted, the Navy runs a lot of nuclear plants on board ships and they have no problems whatsoever. We could use THAT technology for "local plants" to provide the extra power needed for the high usage days. mm wrote on January 04, 2008 08:35 PM: Enjoy those high energy bills fellow americans, or we can build the coal plants in Mexico and transmit the power back across the border. Anyone heard of out sourcing, enjoy it tree huggers. Dave l wrote on January 04, 2008 04:59 PM: Denis, the spokesperson for Sierra Nevada didn't mention that "clean and plentyful coal" prices have skyrocketed 59% this year did he? ...and his company website says 70% of thier electrical production is gas generated. Denis said 75%...hey, 8% lie here and there and next thing you know, coal costs went up 67% in 2007! GOD wrote on January 04, 2008 03:14 PM: Nevada Power / Sierra Pacific is hedging their bet. You spread your bet/risk across the spectrum of power production. We need coal-fired power -- it is cheap and reliable to supplement the natural gas-fired plants. Slowly, but surely, wind and some solar will come on line, but to keep up with the huge demand in NV, we need coal power plants. Who do you think will build the transmission lines that wind and solar power will tie into?? All the greenies should ride around on bikes if they want to save the planet, but no, they show up in SUVs to protest --- hypocrites. Harry Reid needs to keep his mouth shut too, he's releasing to much CO2 and stench into the atmosphere. Beytovin wrote on January 04, 2008 01:58 PM: Maybe even go back to work in the field. It's about time for a change in career scenery! Beytovin wrote on January 04, 2008 01:56 PM: Roger, Yes, nuclear is safe. I know, I know...TMI. That was 30+ years ago, and that plant was built on 1950's era technology. We've come a long way, baby (in some areas, at least). I've had a bit of experience in nuclear power from time in the military. I can tell you that using modern technology and running a plant like the Navy, I would live next to it. Roger wrote on January 04, 2008 01:41 PM: Nuclear safe? As soon as there is an accident.\, nuclear will be shut down...and it is really only a matter of time. Coal, oil and nuclear will be the wave of the future. Solar is too expensive, but it's more than than. Power companies need to own the power so we can buy it from them. This is why they want to cover the desert with unsightly solar panels. That won't work. Too many private land issues, right of way and the cost will be astronomical. It is hardly "green" to blanket the desert with solar panels. They could go on rooftops of all those ugly Del Webb Communities. Funny how the conservative fat a**es like to call everyone who likes nature an ecoterrorist. I guess that's what happens when they try to think! LOL Beytovin wrote on January 04, 2008 01:00 PM: They should seriously consider building a couple of smaller nuke plants. Relatively low carbon emissions, a good thing. Safe, clean power for years! No fluctuations due to third-world whims. Yes, China and India will build dirty coal plants. Where do you think this dirty stuff goes? A lot of it winds up on the west coast of the US! China is suffering a heart disease epidemic. This has been directly attributed to air pollution. At least when the 3 gorges hydro plant comes on line, this will provide as much as 10% of all of China's electricity. Meanwhile, we should build nuke plants and invest heavily in new technology. Like we used to, when we were truly a great country. RANDY wrote on January 04, 2008 12:24 PM: if anyone believes that solar power is the answer to our energy needs, then i have a sunny spot in nevada to rent. just bring your solar panels and set them right up. i only charge one dollar per square foot per month. any takers? of coarse, you will have to check with nv power and the puc first before you try selling any electricity. nv power has a monopoly in clark county.... Frieda wrote on January 04, 2008 10:12 AM: Environmental craziness. Meanwhile, China and India continue to build plants that will have little clean technology and they will disable it anyway !! You Greenie fools ! Expect the price of electricty to continue to rise, solar, wind, geo, hydro will not meet our needs for many, many years. Its like Harry Reid and the Greenies live in a Disneyland world ! Read All Comments