Utilities Violating Mandate On Renewable Energy

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Nevada Power Co. and Sierra Pacific Power Co. want exemptions from requirements of the state's renewable energy law to avoid being fined for not meeting those terms.

The utilities contracted with independent power companies to build renewable energy facilities, but told state regulators they've faced a series of "supplier delays, defaults and terminations" for renewable power.

As a result, Nevada Power and Sierra Pacific, subsidiaries of Reno-based Sierra Pacific Resources, won't meet the state's minimum requirements for renewable energy for 2003 and 2004, the companies reported Thursday.

The 2001 renewable energy law requires them to obtain increasing percentages of their power supply from renewable resources, including the wind, the sun and geothermal wells that tap hot underground water.

The law mandated that the two electric companies get 5 percent of the power they sell from renewable or green power sources last year, increasing to 15 percent by 2013.

But the utilities said many of the projects they were counting on to meet the requirements have been canceled.

"The ATS (Advanced Thermal Systems) geothermal project planned for Steamboat near Reno lost its ability and/or rights to use resources owned by third parties," the report said. "That project failed."

The Desert Queen wind project, which was being developed at Goodsprings by Cielo Wind of Austin, Texas, depended on extensions of federal tax credits, and failed when those extensions weren't granted, the utilities reported.

Also, the MNS Wind project that was to be built at the Nevada Test Site was scheduled to start operation by the end of 2003, but the U.S. Air Force objected and the project was scuttled.

Earth Power Resources planned a geothermal project 60 miles north of Elko, but it "has experienced resource and permitting difficulties" and has been delayed one year or longer, according to the utilities.

The Ely Wind project near Ely has been delayed two years. Solargenix Energy is developing a solar thermal project at a site 20 miles southeast of Las Vegas but that project has been delayed nine months or more.

Ormat has two geothermal projects near Fallon. Its 20-megawatt project is delayed three months, and a 10-megawatt project "is on time for commercial operation June 30, 2005," the utilities wrote.

Analysts said renewable power developers are having difficulty financing their projects because the two Nevada utilities have junk bond ratings and lenders fear that the utilities might default on power purchase contracts.