Nevada Power makes progress in its exit from coal-fired power

Nevada Power currently anticipates retiring the coal-fired Reid Gardner Unit 4 (257 MW net) in December 2017 and to be out of the coal-fired Navajo Units 1, 2 and 3 (255 MW net ownership in larger plant) in 2019.

The coal-fired Reid Gardner Units 1, 2 and 3 were retired in December 2014, Nevada Power noted in its March 2 annual Form 10-K report. These planned moves will get the utility entirely out of coal-fired generation.

The company said it has no coal commitments for Reid Gardner Unit 4 for 2015 or beyond and will rely on spot market solicitations for any coal supplies needed during 2015. The coal supply plan has the overall goal of eliminating its coal pile by the end of 2017. The rail transportation service contract between the company and the Union Pacific Railroad expired Dec. 31, 2014. This contract contained a volume shortfall provision, which was accrued as of Dec. 31, 2014, and payment is due in May 2015.

The Navajo Generating Station, jointly owned by Nevada Power along with five other entities and operated by the Salt River Project, has a coal sales agreement that extends through 2019.

Said the Form 10-K: “In May 2014, the Company filed its Emissions Reduction Capacity Replacement Plan (‘ERCR Plan’) in compliance with Senate Bill No. 123 (‘SB 123’) enacted by the 2013 Nevada Legislature. The filing proposed, among other items, the retirement of Reid Gardner Generating Station units 1, 2 and 3 in 2014 and unit 4 in 2017; the elimination of the Company’s ownership interest in Navajo Generating Station in 2019; and a plan to replace the generating capacity being retired, as required by SB 123. The ERCR Plan includes the issuance of requests for proposals for 300 MW of renewable energy to be issued between 2014 and 2016; the acquisition of a 272-MW natural gas co-generating facility in 2014; the acquisition of a 210-MW natural gas peaking facility in 2014; the construction of a 15-MW solar photovoltaic facility expected to be placed in-service in 2015; and the construction of a 200-MW solar photovoltaic facility expected to be placed in-service in 2016. In the second quarter of 2014, the Company executed various contractual agreements to fulfill the proposed ERCR Plan, which are subject to the [Public Utilities Commission of Nevada] approval.

“The PUCN issued an order dated October 28, 2014 removing the 200-MW solar photovoltaic facility proposed by the Company from the ERCR Plan but accepting the remaining requests. The Company filed a petition for reconsideration, but in December 2014, the PUCN upheld the original order from October 2014 with respect to material matters. In December 2014, the Company filed its acceptance of the modifications to the ERCR Plan.”

Said the Form 10-K about regional haze compliance at Navajo: “The Navajo Generating Station, in which the Company is a joint owner with an 11.3% ownership share, is also a source that is subject to the regional haze [best available retrofit technology] requirements. In January 2013, the EPA announced a proposed Federal Implementation Plan addressing BART and an alternative for the Navajo Generating Station that includes a flexible timeline for reducing nitrogen oxides emissions. The Company, along with the other owners of the facility, have been reviewing the EPA’s proposal to determine its impact on the viability of the facility’s future operations. The land lease for the Navajo Generating Station is subject to renewal in 2019. Renewal of the lease will require completion of an Environmental Impact Statement as well as a renewal of the fuel supply agreement.

“In September 2013, the EPA issued a supplemental proposal that included another BART alternative called the Technical Work Group Alternative, which is based on a proposal submitted to the EPA by a group of Navajo Generating Station stakeholders. The EPA accepted comments on the various alternatives through January 6, 2014 and, in July 2014, the EPA announced it had approved the final plan for the Navajo Generating Station, including the reduction of emissions of nitrogen oxides by approximately 80% through the retirement of one unit in 2019 and installation of selective catalytic reduction controls at the other two units by 2030. In October 2014, several groups filed an appeal of the EPA’s decision in the Ninth Circuit. Until such time as additional action is taken by the Ninth Circuit and the uncertainties regarding lease and agreement renewal terms for the Navajo Generating Station are addressed, the Company cannot predict the outcome of this matter. The Company filed the ERCR Plan in May 2014 that proposed to eliminate its ownership participation in the Navajo Generating Station in 2019, which was approved by the PUCN.”

Sierra Pacific says the Valmy coal plant ready for MATS compliance

A Nevada Power sister company, Sierra Pacific Power, on March 2 filed its own annual Form 10-K report. Amother other things, the company said it retired two gas/oil-fired units at the Tracy having a combined capacity of 136 MW in December 2014.

For Sierra Pacific Power, its coal-fired capacity is Units 1 and 2 at the Valmy plant (522 MW net total for the plant, 261 MW net being Sierra Pacific’s share of the co-owned plant). Idaho Power owns the other 50% of the plant. The Sierra Pacific Form 10-K indicates no near-term plan to retire this capacity.

Said the Form 10-K about MATS compliance: “The Company believes that its emissions reduction projects completed to date or currently permitted or planned for installation are consistent with the EPA’s MATS and will support the Company’s ability to comply with the final rule’s standards for acid gases and non-mercury metallic hazardous air pollutants. The Company is proceeding with additional actions to reduce mercury emissions through the installation of controls and use of sorbent injection at certain of its coal-fueled generating facilities to otherwise comply with the final rule’s standards.”

Sierra Pacific has a long-term coal contract for the Valmy Generating Station that expires Dec. 31, 2015. Coal shipped under this contract is supplied from Black Butte Coal‘s surface mine in southern Wyoming. As of Dec. 31, 2014, this contract represents 52% of the current forecasted coal requirements of the Valmy station for 2015. The transportation service contract between the company and the Union Pacific Railroad expired Dec. 31, 2014.

 

Sierra Pacific Power, together with its subsidiaries, is a wholly owned subsidiary of NV Energy, a holding company that also owns Nevada Power and certain other subsidiaries. NV Energy is an indirect wholly owned subsidiary of Berkshire Hathaway Energy Co., which is a holding company based in Des Moines, Iowa, that owns subsidiaries principally engaged in energy businesses. It is a consolidated subsidiary of Berkshire Hathaway Inc.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.