By VERNON ROBISON
Moapa Valley Progress
Overton Power District is facing a huge increase in its cost of providing power to residents of the Moapa and Virgin Valleys. Following current projections, the district’s energy transmission costs will have doubled over a two year period by the end of 2015, according to a report given by OPD General Manager Mendis Cooper to the Board of Directors on Wednesday last week.
Cooper explained the district currently has, for many years, had an agreement with regional utility NV Energy to transmit its allotment of power from Mead Station near Boulder City to the OPD point of delivery at Tortoise Substation in Moapa.
“We have had a historical rate, called the tri-party agreement, where we have traded some lines between us and Lincoln County and NV Energy,” Cooper told the board. “In exchange for that, we got some benefits.”
But in recent months those costs have been rising dramatically due to a new statewide transmission project being built by NV Energy as well as costly leases that the large utility is under at this time, Cooper said.
“That is what is driving this increase,” Cooper added. “Their new system costs; they are pulling all of that in and we are going to have to start paying for it.”
Cooper said that in 2013, the district paid its customary rate of $1.2 million to NV Energy for transmission.
The same payment was made for 2014. But at the end of the year, NV Energy sent an additional bill of $450,000 that reflected the year’s increased rates. That put last year’s transmission costs at about $1.7 million.
Cooper said that, on a conference call last week, NV Energy officials told him that at the end of 2015, the district would be receiving a bill for an additional $1.2 million balloon payment. This would put the total transmission costs for the year at $2.4 million, Cooper said.
Cooper expressed concern that this increase would undermine the conservative approach that the district has taken in its budgeting for some time now.
“We have been working on lowering our bond rates and bringing down our rates to customers,” Cooper said. “Then we have something like this come along.”
Cooper said that he was working on several possible steps that could be taken to mitigate the sudden increases.
One of those was to look at the possibility of dropping out of the “tri-party agreement” and instead join into the utility’s Open Access Transmission Tariff (OATT) program. This may be more advantageous to the district because the OATT rates are regulated by the Federal Energy Regulatory Commission (FERC) and, thus must be tied to the actual costs, Cooper said.
Another avenue for the district to explore is to install its own natural gas and solar generating plants. This would reduce the amount of energy that needs to be transmitted on NV Energy lines.
Cooper’s third option was to more aggressively pursue a partnership project which has been in the works through Silver State Energy Association (SSEA). In this project, several utility entities have been cooperating to build a new transmission line from Mead Station to Tortoise. This would require a substantial capital investment by the district, but would stabilize the cost of tranmission.
Cooper said that he and OPD staff would continue to looking at different options for the district in dealing with the situation. He promised to get back with the board in the future to consider those options.
Also at Wednesday’s meeting, the board approved the promotion of two apprentice linemen to full journeyman lineman position. Cooper explained that the two employees had worked for the district for about eight years, beginning as groundmen and then training as apprentice linemen for 4 and a half years. During that time, the two had completed the specialized training and classwork required to become linemen, Cooper said.
The board approved the promotion and increased their wages in two steps: the first immediately and the second step in about six months.
“I think it is wonderful seeing that they do all of this coming up through the ranks of OPD,” said at-large board member Judy Metz.
Cooper said that, in the past, the district had tried to hire more experienced linemen from outside. But the position is in such demand, those employees often moved elsewhere within a couple of years.
“We finally decided that it is better to hire guys from Virgin Valley and Overton,” Cooper said. “They need more training and we have to do that. But we have a better chance of keeping them here. That has worked out really well for us.” Cooper said that there were no plans to replace the two apprentice lineman positions.
In another matter, the board approved a $23,400 per year bid for janitorial services from Creative Cleaning Services. Cooper explained that this action would bring a savings of $7,800 per year over the two year contract.
