NV Energy planning to buy gas-fired power plant in Arizona

LAS VEGAS — Nevada’s dominant electric utility is telling state and federal regulators it plans to acquire and improve a gas-fired power plant in Arizona to meet energy demands in coming years.

NV Energy disclosed the $75.6 million purchase price and $21 million investment budget for Calpine’s South Point Energy Center in a July 7 filing to the Nevada Public Utilities Commission. The deal will also need approval from the Federal Energy Regulatory Commission, the Las Vegas Sun reported (http://bit.ly/29E9BLQ ).

The more than 1,000-page filing with state regulators outlines forecasts for NV Energy’s northern Nevada operations, which are conducted through its subsidiary, Sierra Pacific Power Co. It says buying the plant in Mohave Valley, Arizona, would help provide NV Energy with new electricity as a natural gas contract ends and a coal plant goes offline.

The utility has argued that purchasing an existing facility would be more reliable than constructing its own fossil fuel plant, something it does not expect to do in the next decade.

In addition to purchasing the Arizona natural gas plant, the filing projected a relatively small increase in funding for energy efficiency programs, and it sought additional funding for a $33 million transmission line. The company asked for more time to provide the utilities oversight commission with an analysis of the environmental and economic impacts of renewable resources, including rooftop solar.

“(The plan) is being filed at a time of rapid change in the electric energy industry,” the utility wrote, noting that natural gas prices are expected to remain low and that the price of large-scale solar has decreased significantly. “As a result, short-run wholesale electric prices are projected to remain low.”

The NV Energy plan requires commission approval, and it could change in coming months.

Calpine and NV Energy entered into a purchase agreement for the South Point Energy Center on April 1, after the utility had put out a solicitation seeking 400 to 700 megawatts of energy for customers. Pending regulatory approval, NV Energy plans to finalize the sale at the end of the year.

An application with the Federal Energy Regulatory Commission said South Point Energy Center is in need of significant investment and that Calpine had been unable to operate it profitably, given low prices for natural gas.

But the filing also said such a facility could present an opportunity for NV Energy, presenting a low-cost resource at a fraction of the cost to construct a new natural gas plant.

NV Energy has estimated that building a new facility producing a comparable amount of power would cost $711 million.


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