California utility to back out coal as a source for some of its power

The Sierra Club said on April 27 that Liberty Utilities, which serves customers in Lake Tahoe and the Sierra Nevada, decided to end its contract to take power from NV Energy’s coal-fired North Valmy plant, located in Northern Nevada.

Liberty on April 24 requested authority from the California Public Utilities Commission to execute a new contract to buy power from NV Energy that explicitly excludes all coal-fired resources. That request came on the heels of an April 17 request to the PUC to approve the purchase of two new proposed solar projects in Nevada that would provide a combined capacity of 60 MW, the club noted. A story in the Lake Tahoe News confirmed the club’s contention.

Liberty’s new contract, if approved, would expressly exclude all coal-generated electricity beginning Jan. 1, 2016, the club said. Liberty will further reduce its emissions of greenhouse gases when it completes the development of two new proposed solar projects in Nevada, the 20-MW Minden project and the 40-MW Luning project near Hawthorne, Nevada.

Barbara Boyle, Senior Campaign Representative with the Sierra Club, said: “We applaud Liberty Utilities for taking steps to provide cleaner energy for its customers. Residents in Lake Tahoe and the Sierra know all too well the devastating impacts that will result from climate change. We need more utilities to follow Liberty’s example and step-up to replace dirty coal power with renewable energy.”  

Liberty Utilities provides electricity to approximately 49,000 customers in portions of seven California counties around the Lake Tahoe area. NV Energy previously served the territory until it spun off and sold Liberty Utilities (previously CalPeco) in 2010. Since 2010, Liberty Utilities continued to receive the same mix of power provided to NV Energy customers under the terms of a five-year power purchase agreement, including up to 20% from the North Valmy coal-fired plant located near Battle Mountain, Nevada. Liberty Utilities is located within the NV Energy Balancing Authority, and thus is not part of the California Independent System Operator system.

Liberty seeks California approval for two solar projects

Liberty Utilities applied April 17 at the California PUC for a Certificate of Public Convenience and Necessity (CPCN) to acquire, own, and operate the Luning Solar Energy Center and the Minden Sunrise Solar Project. Liberty Utilities urges the commission to approve this application in an expedited manner so that it can issue a final decision by no later than January 2016 and thus ensure that these solar projects are “placed in service” by the Dec. 31, 2016, expiration of the currently available 30% federal Investment Tax Credit (ITC)—the critical economic driver of the transactions.

The Luning Project is a 40-MW project to be located in Mineral County, Nevada. The Minden Project is a 20-MW project to be located in Douglas County, Nevada. The Luning Project will be developed by Invenergy Solar Development LLC, while the Minden Project will be developed by SunPower Corp. and Greenstone Renewables.

Liberty Utilities said it selected these projects through a competitive solicitation for turn-key solar projects offering between 20 MW and 65 MW. Liberty Utilities restricted participation to projects located within the NV Energy Balancing Authority Area. The projects will interconnect directly to the NV Energy system and have their energy delivered by NV Energy into Liberty Utilities’ California service territory.

Each project will contribute significantly and cost-effectively toward Liberty Utilities meeting California’s Renewables Portfolio Standard (RPS)—both at current RPS levels and as likely to be increased. The projects are cost-competitive in part due to Liberty Utilities utilizing tax equity arrangements. Its use of the tax equity structure enables Liberty Utilities to significantly decrease its customers’ responsibility for the capital costs necessary to construct and own the projects, which results in lower costs throughout the projected 30-year lives of the projects.

The April 17 application for the solar projects said about the new NV Energy contract that was the subject of the later April 24 application: “Liberty Utilities and NV Energy have agreed to a new agreement to become effective on January 1, 2016 (‘2016 NV Energy Services Agreement’). Liberty Utilities will shortly file an application seeking authority to enter into the 2016 NV Energy Services Agreement and recover the payments it shall make under the 2016 NV Energy Services Agreement. If approved by the Commission, the 2016 NV Energy Services Agreement will obligate NV Energy to continue to serve the full requirements of Liberty Utilities’ electric loads, but will also allow Liberty Utilities to replace some of the NV Energy supply with RPS-eligible energy generated by Liberty Utilities-owned generating facilities (i.e., the Solar Projects). It will also obligate NV Energy to deliver any energy Liberty Utilities obtains from the Solar Projects over the NV Energy transmission facilities into Liberty Utilities’ California service territory at FERC-regulated cost-based rates (‘NV Energy Transmission Costs’).”

Said the application about Luning: “The Luning Project is expected to utilize Trina Solar polycrystalline modules, Array Technologies trackers, and SMA or GE Energy inverters (or equivalent technologies). Construction of the Luning Project is estimated to take approximately nine months and will commence upon Invenergy and Liberty Utilities having obtained all necessary permits, including the CPCN this Application requests. The point of interconnection will be the existing NV Energy Table Mountain 120 kilovolt (‘kV’) substation, located approximately one mile southeast of the Luning Project. The Luning Project requires no network transmission upgrades in the NV Energy transmission system.”

It said about Minden: “The Minden Project is expected to utilize SunPower’s modular Oasis C1 single axis tracking plant design. Construction of the Minden Project is estimated to take approximately eight months. Construction will commence once SunPower and Liberty Utilities have obtained all necessary permits, including the necessary construction and rate authorizations from this Commission. The Minden Project is located adjacent to, and will interconnect with minimal need for incremental facilities with, NV Energy’s Muller Substation on the Buckeye-Round Hill 120 kV transmission line.”

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.