CARSON CITY, Nev. (AP) - The state Consumer Protection Bureau has filed a lawsuit to try to block construction of a new gas-fired power plant 25 miles outside of Las Vegas.
The suit filed Tuesday in District Court in Carson City argues that NV Energy customers will pay too much for electricity if the plant is built.
The bureau, a division of the attorney general's office, wants the Public Utilities Commission to reconsider its decision to allow the 500-megawatt Harry Allen plant. It argues the utility should instead have purchased a gas-fired power plant at Apex. Broadway Gen Funding LLC, a subsidiary of LS Power, offered to sell Apex for $545 million.
Customers would save more than $200 million if NV Energy were to buy the Apex plant rather than building Harry Allen, which is estimated to cost $780 million, the bureau argued.
The utilities commission "refused to balance the interest of the customers with those of the shareholders," Senior Deputy Attorney General William Stanley wrote in the suit.
Chelsie Campbell, spokeswoman for NV Energy, said the utility had no comment on the lawsuit because litigation is pending. Sean Sever, spokesman for the Public Utilities Commission, said the commission was just served with the lawsuit Wednesday and was reviewing the case.
The lawsuit also says NV Energy, formerly called Nevada Power, spent money developing Harry Allen even before it got approval from
In late November, the commission denied a request from the bureau to reconsider its decision on Harry Allen.
NV Energy has asked the commission to approve a rate increase that pays for $285 million of the Harry Allen plant. The power company seeks an 18 percent increase in residential utility rates.
But that rate increase doesnt cover the remaining $495 million cost of Harry Allen. For that, the company plans to ask for an additional rate increase.
The possibility of buying the Apex facility surfaced during commission hearings on Harry Allen, but NV Energy executives said it wasnt really an offer, only a request for further negotiations.
"The companys position was that there was never really an offer on the table," said Tim Hay, former consumer advocate and member of the commission. "But to me it seems like the magnitude of the dollar amount is enough that I am proud of the consumer advocates office for trying to do this."
NV Energy has said it had an incentive to go ahead with the Harry Allen plant because the permit for the plant was set to expire if construction did not begin. Michael Yackira, NV Energy president, has said the Harry Allen plant is likely the last that could be permitted in the Las Vegas Valley because of poor air quality here.
Harry Allen is expected to be operating by summer 2011.
Information from: Las Vegas Sun, http://www.lasvegassun.com
(Copyright 2009 by The Associated Press. All Rights Reserved.)