Gas

Rights for water may stall power plants

By JOHN G. EDWARDS

LAS VEGAS, Oct. 6, 2000 (Las Vegas Review-Journal)—Nevada officials are hanging their hopes on attracting electric power plant developers to boost rural economies, bolster reserves of electricity for the growing population and ease the transition from regulated to competitive power markets.

One problem. State officials aren’t sure they want to allow power plant developers to draw huge quantities of water from underground reservoirs for these power plants.

“The allocation of water rights is going to be a big issue,” said Don Soderberg, chairman of Nevada’s Public Utilities Commission. Nevada bans the export of water out of state, said Robert Coache, chief engineer with the Nevada Water Resources Division in Las Vegas.

“If you were to build a power plant and that power was to be exported to California, you’re basically exporting that water through the power lines to California,” Coache said.

Few of the merchant plants projects in Nevada have a permit for the water they will need, officials said. The case of PG&E demonstrates the problem. The giant San Francisco energy company on Sept. 29 announced plans for a 1,000-megawatt power plant project at Moapa. Company executives said they were confident they had access to water needed to cool the natural gas-fired plant.

In addition, they noted that relying on water, rather than air, to cool the plant, is more cost-efficient. The most efficient plants will come on line before more costly generators of power, said Michael Snowden, PG&E’s project development manager. “It’s not an application for water,” Snowden said. “It’s not a hope that we’ll get water. We actually have water.”

State officials are far less confident that PG&E will get the water it needs. PG&E intends to obtain 4,000 acre feet of underground water from rancher Robert Lewis. The company needs the same amount from the Moapa Valley Water District, Sandra McDonough, vice president of PG&E National Energy Group, explained Thursday.

Coache said the rancher must obtain approval from state Engineer Hugh Ricci before he can sell some of his water for the power plant. Lewis’ water now is designated for agricultural uses. McDonough said PG&E was well aware that it needs state approval to use some of Lewis’ water.

When PG&E announced the project, it contrasted its situation with that of Calpine, a San Jose, Calif., company aiming to obtain water rights for a plant on the Moapa Paiute Indian Reservation. Calpine’s water-cooled, 760-megawatt plant would be 45 miles northeast of Las Vegas. When it announced its plans, PG&E said it had the rights it needed and Calpine didn’t.

Later, PG&E backed off those claims, admitting it lacks the necessary rights. McDonough continues to maintain, though, that PG&E has a more likely chance of obtaining water than Calpine. The Paiutes asked the state engineer to allow the tribe to draw 7,000 acre feet of water from wells for the Calpine plant, but they still contend that the reservation has sovereign rights to the water.

Several government agencies have filed protests, expressing concern about the ecology or perceived threats the project would pose to their water rights. The Southern Co. of Atlanta is one of the few power plant developers that has secured water rights it needs, Coache said. The Atlanta company can use some of the water extracted through a permit held by the Apex Industrial Park, north of Las Vegas, where the merchant plant will be built, Coache said.

The El Dorado power plant at Boulder City also has water for its planned second 480-megawatt generating unit there, said Art Larson, a spokesman for San Diego-based Sempra Energy, a partner with Houston-based Reliant Energy in the power plant. El Dorado, however, uses air-cooling, rather than more efficient water cooling, he said. That reduces the amount of water needed. “The companies recognized the concern with limited resources,” Larson said. “That’s why we went ahead with the air-cooled plant.”

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