Nevada Power’s plan to replace coal is gas capacity buy, market power purchases

Nevada Power on July 1 filed with the Nevada Public Utilities Commission an integrated resource plan (IRP) that assumes a roughly 1,100 MW hole in its capacity later this decade because it has to retire 257 MW of coal capacity by December 2017, has to exit ownership of another 255 MW of coal capacity by December 2019, and has a tolling power contract for 570 MW that expires in 2017.

That tolling deal is with the owners of the Griffith Power Plant in Arizona.

The 255 MW of coal capacity it has to get rid of is at the co-owned Navajo plant, where that 255 MW represents 11.3% of the whole plant. Nevada Power said no specific agreements are in place yet with the other Navajo co-owners about that 11.3% share.

The 257 MW of coal generation to be retired is Reid Gardner Units 1-4 in Nevada, with Units 1-3 actually retired in December 2014 and Unit 4 to be retired by the end of 2017. Decommissioning and demolition of Units 1-3 began in January of this year.

Nevada Power d/b/a NV Energy presented various scenarios to meet its capacity needs, including one that relies heavily on a 2017 buy of 25% (130 MW) of the gas-fired Silverhawk power plant from the Southern Nevada Water Authority along with market power purchases, and another scenario that largely relies on 340 MW of new solar photovoltaic capacity in the 2017-2018 period and some purchasing of outside power. The case that relies on the partial Silverhawk buy and supplemental purchase power agreements is the preferred one for the utility.

Nevada Power currently owns 75% of Silverhawk (390 MW of capacity) and operates it. It is now asking the commission for approval of the buy of the 25% share it does not own. The initial acquisition cost for this 25% share would be $77.3 million. Nevada Power noted that this deal also includes a 25% share of the rights to develop new capacity at the Silverhawk site.

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.