By Vernon Robison
Moapa Valley Progress
A report released earlier this month by the Sierra Club claims that it would be far cheaper for regional utility company, NV Energy, to shut down its coal-burning Reid Gardner Station in Moapa next year than to continue its operation.
The Public Utilities Commission of Nevada (PUCN) has been conducting an ongoing investigation into the appropriate lifespan of the 50 year old Reid Gardner station. NV Energy had been requested to formulate alternative scenarios that studied the possible effects on ratepayers if the plant were to be decommissioned.
The utility submitted six different alternatives. The preferred alternative was for NV Energy to perform a series of additional retrofits to the plant which would further reduce its emissions, put it well within compliance measures of federal and state environmental regulations and extend its life in order to allow continued operations well into the future.
The PUCN then requested that the Sierra Club, a group which has taken a hard stance against the continued operation of so-called “dirty energy” coal plants, to prepare a response to the NV Energy proposals. The Sierra Club response, in the form of the report was filed with the PUCN on June 14.
The Sierra Club report, prepared by utility analytical firm Resource Insight, asserts that retiring all four generating units at Reid Gardner by 2013 would save $59 million over continuing to run the plant until 2023.
“We took a look at the data [provided by NV Energy to the PUCN] and we ran a model that had a couple of different assumptions in it,” said Jane Feldman, the Conservation Chair of the Southern Nevada Sierra Club. “We came up with an outcome that says that it really is much cheaper to turn off the coal fired power plant as early as this coming year and, instead, forgo the expense of the upgrade.”
The upgrade is a proposal to retrofit the Reid Gardner smokestacks on Units 1, 2 & 3 with special nitrogen oxide (NOX) burners to further reduce regional air pollution coming from the plant. NV Energy has agreed to the retrofit which is estimated to cost about $4.3 million per year, according to federal Environmental Protection Agency documents.
But NV Energy officials say that this is only the tip of the iceberg on the costly improvements that the company has invested into the plant. In recent years, NV Energy has installed significant emission-reducing technology at a cost of more than $80 million, officials said.
“Unlike some similar-aged power plants elsewhere in the nation, Reid Gardner has already undergone extensive improvements,” said NV Energy spokesman Mark Severts. “We recently added baghouse technology to all of the units built in the 1960s and -70s to capture 99.9% of particulate emissions. And our high-efficiency scrubbing systems allow it to consistently rank among the top 10 percent of plants nationwide for low sulfur emissions.”
With so much already invested to clean up the coal-fired plant, NV Energy officials are hesitant to simply close it down at this point.
The Sierra Club report also claims that, if Reid Gardner were to shut down, the 557 megawatts generated there for use in the region could effectively be replaced with increased energy efficiency measures. The Sierra Club report recommends that NV Energy establish an aggressive energy efficiency program, consisting of rebates and incentives to customers for performing energy upgrades to their homes and commercial buildings. The recommendation would bring a 2% efficiency gain, the report states.
“The modeling that we used to plug in an efficiency program and no longer have to do the plant upgrades, operating out over 20 years; it took all that into consideration,” said Feldman. “The numbers that they crunched considered the costs of a utility runing a successful efficiency program and it came back that we are saving money going that way.”
But during the course of its investigation, the PUCN had moved away from this direction, scaling back aggressive energy efficiency programs as being not cost effective for ratepayers.
“Of course that was the decision that the Commission made based on the current resource plan with Reid Gardner in the mix,” said PUCN spokesman, Peter Kostes in a telephone interview. “If you removed that [Reid Gardner] out of the system, you’d have to make up the resource somewhere. So we would have to change everything to figure out how to replace that power.”
But the Sierra Club report claimed that there is enough surplus capacity in the regional power system to make Reid Gardner’s coal generated power unnecessary. The report bases this claim on additional solar and geothermal generation that NV Energy has acquired, estimates of capacity from existing renewable resources, enactment of the above mentioned efficiency program and extensions of utility contracts in the region. With all of that factored in, the report estimates that NV Energy has a surplus of as much as 5,200 megawatts of excess capacity.
“NV Energy has said that they need Reid Gardner to provide peak power during the middle of the summer when all the ACs are running,” said Feldman. “But they have already secured all kinds of power that is available on the grid right now to them, and we will not have a lack of power to keep our ACs turned on.”
According to NV Energy numbers, the company generates about 72% of the electricity needed to supply customers. The total summer peak megawatts generated on the southern Nevada system of seven NV Energy power plants is about 4,100 megawatts. At the same time, the company shows its highest all-time peak electricity use in southern Nevada to be about 5,900 megawatts, which occurred one day in the summer of 2007. Last year’s highest peak use in the south was about 5,500 megawatts which took place on August 24, 2011.
“Each day, we schedule our plants and purchase power opportunities based on keeping our costs to customers as low as we can,” said Severts. “In other words, we may opt to buy power from someone else if it is less expensive than generating that same amount of power at one of our own power plants.”
The PUCN is expected to schedule a hearing in the coming months on whether to give the Reid Gardner an early retirement.
Feldman and the Sierra Club believe that area residents would be best served by retiring the plant next year.
“It is still causing health impacts to people that live there,” Feldman said. “The [fly-ash] landfill is out there and it blows that stuff across the desert right into the homes of the Paiutes who live nearby and into Moapa town. And it is causing water contamination for the water that they have to put on the landfill, all that water carries leached material into the Muddy River and then into the Colorado River at Lake Mead. It really is an egregious situation.”
NV Energy officials have said that they will continue to work with the Commission to do what’s best for ratepayers and to operate Reid Gardner in an environmentally responsible manner.
“As to questions about the retirement of the Reid Gardner Station, we will continue to work within the appropriate process established by the PUCN to review all of our generating resources and to do what makes most sense for our customers,” Severts said.
