Vegas Magazine - Niche Media - There is a place beyond the crowds, beyond the ropes, where dreams are realized and success is celebrated. You are invited.
Issue link: http://digital.greengale.com/i/215016
PHOTOGRAPHY BY ETHAN MILLER/GETTY IMAGES (HOOVER DAM, INTAKE TOWERS, YACKIRA); WIN MCNAMEE/GETTY IMAGES (REID); DREW ANGERER/GETTY IMAGES (BUFFETT) FROM LEFT: Senator Harry Reid; NV Energy CEO Michael Yackira; Berkshire Hathaway CEO Warren Buffett. mal interference from state utility regulators. The political momentum behind SB 123, which included public declarations of support from Reid and Governor Brian Sandoval, was intense. But not everyone was happy. According to one Nevada political operative who was involved in the discussions, "They had no real inclination to get out of coal…. The company had just kind of flatlined, and they decided, We need to build new assets." S ome consumer advocates and Republican legislators criticized SB 123 as an end run around regulators that would be expensive for consumers. Meanwhile, the Strip's casino owners—NV Energy's biggest customers—balked at the amount of new natural gas and renewable generating capacity that the utility would be asking them to pay for. The original draft allowed for 2,600 megawatts of new capacity, most of it from natural gas. (To put that in perspective, NV Energy's existing capacity is 6,078 megawatts.) Following complaints from the Strip, however, the final version of the bill called for substantially less. "We got them down by two-thirds," says the operations manager for one casino group. In June, SB 123 became law. While NV Energy has said that acquiring the new capacity will increase rates less than five percent more than previously forecast increases, some consumer advocacy groups say the rate hikes could be in the double digits. The law also calls for NV Energy to retire Reid Gardner completely by 2017, with three of its four units closing in 2014. Players in Nevada's renewable energy industry maintain that the new law and the merger " SB 123 IS A BIG DEAL FOR THE RENEWABLE ENERGY COMMUNITY IN NEVADA." —BOBBY HOLLIS amount to a net benefit for business owners. Bobby Hollis, NV Energy's executive in charge of renewable energy, says the law "is a big deal for the renewable energy community in Nevada… an almost 50 percent requirement to increase the amount of renewable energy capacity in the state." It remains to be seen, he says, which companies and what kind of power will benefit, although given the state's current infrastructure, geothermal and solar are likely to be the winners (Nevada has little in the way of wind). He emphasizes that any future contracts will have to be approved by the Public Utilities Commission and that NV Energy is interested in getting the best deals for its customers: "We have done really conservative estimates that the whole cost would be just slightly higher than if you didn't do this plan." The cost of producing solar energy has fallen dramatically, he adds (geothermal has remained flat), and NV Energy expects it to fall further by the time it contracts for new capacity over the next few years. "I don't think anybody knows what NV Energy's plans are," says Brian Fairbank, CEO of Alternative Earth Resources, a Canadian company that built and operates a geothermal plant at Blue Mountain in Northern Nevada and that sells electricity under contract to NV Energy. For his part, Fairbank adds, his company owns a number of prospective geothermal plant sites that it would be delighted to sell to, or develop to supply power to, NV Energy. Paul Thomsen, director of the Nevada Governor's Office of Energy (and until recently an executive with Ormat Technologies, a leading Nevada geothermal company and an NV Energy supplier), calls the new law "a lifeline" for the state's renewable industry, which is partially dependent on legal mandates like the Renewable Portfolio Standard. With NV Energy ahead of its RPS renewable requirements, Thomsen says, it was under no legal pressure to add more renewable capacity now. And because new renewable power plants cost so much to build, no developer would consider doing so without a buyer for its power in place. "That left the industry looking at a 10-year hiatus that would really have been a death blow," he says. And although he notes that much uncertainty remains about how the law will be implemented, renewable power suppliers are breathing a little easier knowing that NV Energy plans to continue buying more over the long haul, starting next year. All the players in this picture want green energy. Where they differ is in how much it should cost. If NV Energy can find a way to provide green energy at a price that doesn't upset its big customers on the Strip, Las Vegas could end up one of the country's green leaders—even with those fountains and light beams. V VEGASMAGAZINE.COM 124-129_V_Feat_Energy_Dec13.indd 129 129 11/20/13 5:14 PM