By JOHN G. EDWARDS
Oct. 28, 2000 (www.lvrj.com)Water is too important to rely on volatile electric power markets for its delivery. That seems to be the message from the Southern Nevada Water Authority.
The authority on Thursday issued a request for proposals to build a power plant that can generate between 100 and 150 megawattts of electricity. With its own power plant, the authority would no longer be as dependent on wholesale power marketers and Nevada Power to satisfy its energy needs to pump and treat water.
In another five years, the authority may need to expand the generation capacity of the power plant 4,450 megawatts, said David Donnelly, deputy general manager. “We want to make sure that we are in control of our destiny,” Donnelly said.
He believes the project could result in cheaper and more reliable supplies of power. The authority’s board of directors on Oct. 19 authorized the request for proposals. The authority is willing to discuss several types of proposals with power plants developers. It might be willing to join as an equity partner in a project, enter a long-term lease of the plant or possibly provide the site for the power plant, Donnelly said.
The water authority believes power plant operators will be interested in the project, because the authority uses electricity at night to pump water when demand for electricity generally is at its lowest. Water is pumped into reservoirs and gravity carries it downhill to users.
During the day, an electric power plant operator could use the plant’s capacity to generate power for sale on the market at high prices when air-conditioning use causes power demand to peak. The authority serves Las Vegas, three other area cities, the Clark County Sanitation District and two water districts. The authority probably remains Nevada Power’s largest customer, Donnelly said. While it primarily operates as a water utility, the authority has some of its own transmission lines and buys power on the open market, he said.
Since about 1997, the water authority has used a contract with the Colorado River Commission, which operates Hoover Dam, to buy power on the wholesale market. The transmission line connects water treatment and pumping facilities at Lake Mead with the power grid in the El Dorado Valley on the outskirts of Boulder City. “We saved considerable money being able to go out and buy for ourselves,” Donnelly said.
The transmission lines made the water agency less dependent on Nevada Power, but now the authority is ready to take the next step and lock in costs through a power plant project.
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