New investments in transmission and generation will require patience, NV Energy (NYSE:NVE) President and CEO Michael Yakira said May 8.
“When we look at what our investment opportunities are, they will be focused on generation and transmission,” Yakira said during the company’s 1Q12 earnings conference call.
He noted that the company would look at opportunities in renewable generation as well as conventional generation. “But as you well know, this is not a business where you can say, ‘If you build it, they will come,’” he said. “You have to have a clear path to investment returns, and we continue to look at those kinds of opportunities but are not scurrying around just saying, ‘Let’s do it for the sake of doing it.’”
Yakira said Nevada faces several challenges to these types of transactions, including that the state is 87% owned by the federal government, requiring “a lot of things like environmental impact studies,” and that some transmission projects depend on California taking renewable energy transported into the state to meet its renewable portfolio standards.
Yakira noted that NV Energy recently ceased participation on the China Mountain Wind project due to a two-year permitting delay for a new environmental impact study planned by federal authorities.
“In all cases, we will be selective in evaluating new opportunities and invest our shareholders’ capital only where we see a clear path to earning an appropriate return,” he said.
The company’s current project, the One Nevada transmission line, or “ON Line” project, has experienced delays due to high winds damaging some of the tubular guyed-V (TGV) structures.
“Remediation efforts are still in the testing/analysis stage” for the towers, according to project communications director Mark Severts.
The damage has been attributed to wind-induced vibration experienced when the TGV structures are exposed to sustained winds at various wind speeds.
Other ON Line project work, not related to addressing wind issues, continues.
The line, which will run 235 miles from the Harry Allen substation in Clark County to the Thirtymile substation in White Pine County, was expected to enter service by year-end 2012, but is now expected to enter service in the latter half of 2013.