The comments came during a conference call for a new report that is critical of the costs that may result if Sierra Pacific Resources develops a $5 billion coal power plant and transmission line to its proposed Ely Energy Center.

Spencer suggested the project would make Sierra Pacific, the holding company for Nevada Power Co. of Las Vegas and Sierra Pacific Power Co. of Reno, more valuable to an acquirer. He suggested the plant would increase the value of facilities on which the holding company or an acquiring company could earn a profit.

"Then, they would have a big money number on the books that would make the company attractive to sell," Spencer said.

"They would like to have a $5 billion plus asset added to the rate base," the assets upon which utilities are entitled to earn profits, Spencer said.

A California utility might want to buy Sierra Pacific Resources because California utilities must obtain large quantities of renewable power from solar, wind and geothermal energy from hot underground water, he said.

Acquiring the Nevada company would give a California utility company better access to the abundant renewable energy sources in Nevada, he said.

California electric utilities "are going to need a tremendous amount of new power to meet their load growth over the next decade," Spencer said.

The Natural Resources Defense Council representative also suggested that Horizon Asset Management of New York and a related firm wouldn't hold 29 percent of the outstanding shares of Sierra Pacific Resources if the investment companies didn't think they could profit from the investment, possibly through a corporate takeover of Sierra.

Sierra Pacific spokesman Mark Severts declined to comment Tuesday, noting that company policy prohibits discussing possible mergers.

The comments came during a conference call discussing a 10-page report that criticized Sierra Pacific for continuing to focus on development of a $5 billion coal-fired power plant at Ely.

Innovest Strategic Value Advisors analyst Eric Kane wrote the report, which was commissioned by the defense council. Unlike Sierra Pacific Resources, many major electric utility companies are trying to reduce their coal power generation exposure because of expected federal regulations on carbon dioxide emissions, Kane said.

The analyst estimated that federal carbon regulations could add $115 million to $632.5 million in annual costs for the proposed Ely Energy Center.

He based his estimate on costs ranging from $10 to $55 per ton of carbon dioxide emissions from the plant, but he acknowledged that it was difficult to know how what federal regulations will be adopted to control carbon dioxide emissions nor what the costs would be.

Tim Hay, former Nevada consumer advocate, said an alternative to reducing carbon dioxide emissions was to remove the carbon dioxide from the Ely center, possibly through a pipeline to another location for underground storage. Geological conditions around Ely are unsuitable for underground carbon dioxide storage, Hay said.

Kane said Sierra should pursue energy conservation programs and renewable energy development, instead of coal power.

Sierra spokesman Severts said the company is pursuing renewable energy and conservation programs but cannot rely solely on those programs because of growing demand for power in Nevada. Severts said the utility company has never heard of Innovest and suggested the study was "used to further an anti-coal agenda."

Shares in Sierra Pacific gained 18 cents, or 1.43 percent, Tuesday to close at $12.81 on the New York Stock Exchange. Sierra shares hit a 52-week high of $19.60 on May 23.

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