State regulators have cleared the path for construction of a
514-megawatt natural gas-fired power plant eastof Reno - a proposed $420 million project that underscores SierraPacific Resources' recovery from the financial chaos it faced after the 2001 Western energy crisis.
Sierra Pacific Resources subsidiary Sierra Pacific Power Co.
wants to build next to its existing plant at Tracy. The utility
hopes to have the facility on line by mid 2008.
The utility's chief financial officer, Michael Yackira, said the
new plant will give Sierra Pacific more control of its costs by
allowing it to own the vast majority of the power it supplies to
300,000-plus customers in Northern Nevada and the Lake Tahoe
Part of the construction costs of the plant could be passed
along to customers, but that would require regulatory approval and
would not occur for at least two years.
The new power plant is a key tenet of Sierra Pacific Power's
20-year resource plan submitted to the Nevada Public Utilities
Commission last year addressing long-term needs to handle the
At the time, critics questioned the utility's dependence on
traditional energy sources such as coal and natural gas, including
its joint ownership with Idaho Power Co. in the coal-fired Valmy
plant east of Winnemucca.
They said Sierra Pacific wasn't moving fast enough on renewable
energy sources, but the utility argued it has complied with and
even surpassed state standards set in law.
After the Western energy crisis, Wall Street reduced the
company's credit rating to junk status. But the Sierra Pacific
Resources turned a quarterly profit earlier this year, and CEO Walt
Higgins this fall said the company has regained its credit footing,
making it easier to obtain capital for growth.
Yackira said the new plant will reduce the utility's reliance on
outside generation that makes up an estimated 40 percent to 50
percent of its power supply.
"By the time it's on, we'll own 1,600 megawatts of power" out
of 1,900 to 1,950 total megawatts at peak times. One megawatt
powers about 650 homes.