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: One Nevada Transmission Line and the Future Energy Economy

One Nevada Transmission Line and the Future Energy Economy

02 Feb

ONE NEVADA TRANSMISSION LINE BEGINS SERVING CUSTOMERS

Press Release

LAS VEGAS – JANUARY 23, 2014 – NV Energy and Great Basin Transmission South officially dedicated the 231-mile long One Nevada Transmission Line (ON Line) today, marking the completion of a three-year project that electrically connects NV Energy’s northern and southern service areas for the first time. ON Line also enables the development of renewable energy in remote parts of Nevada.

The bulk transmission line is energized to 500,000 volts and has an initial capacity of up to 800 megawatts.

The line runs from the Harry Allen Generating Station north of Las Vegas to the new Robinson Summit Substation located just west of Ely, Nev. Eleven separate renewable energy projects are now being served by the new line, which also enhances the overall energy-sharing efficiencies of NV Energy’s 10 generating stations located throughout Nevada.

Michael Yackira, NV Energy chief executive officer, said, “The One Nevada Transmission Line plays a vital role in the development of renewable energy that will benefit our customers. This project also helps to strengthen our reliability, as well as provide important dispatch capabilities that will help our customers save on energy.”
Paul Caudill, NV Energy president, said, “The development of this important transmission asset is an indicator of NV Energy’s desire to find new and better ways to serve our customers, while preserving the environment and natural habitat that make Nevada such a special place.”

Nevada Senator Harry Reid said, “Construction of this transmission line created hundreds of jobs for Nevadans, thanks to the public-private partnership that was made possible by the Recovery Act. This vital project will deliver hundreds of megawatts of clean renewable energy to the grid. Completion of the ON Line transmission project is an important step towards unlocking Nevada’s vast clean energy potential and strengthening our state’s electric grid for the future.”

Great Basin Transmission South, an affiliate of LS Power, owns 75 percent of the line, and NV Energy owns 25 percent of an undivided ownership interest in the project. NV Energy has rights to 100 percent of the line’s initial capacity until LS Power completes other potential project phases, collectively known as the Southwest Intertie Project (SWIP).

Mike Segal, Chairman of LS Power, said, “We are proud to be a part of this important project for the State of Nevada which helps improve grid reliability, efficiency and delivery of renewable energy. We appreciate the efforts of NV Energy, the Department of Energy and the entire ON Line team in realizing this milestone.”

The U.S. Department of Energy (DOE) provided a $343 million loan guarantee to Great Basin Transmission South to help finance the project. This is the first and only large scale transmission project in the portfolio managed by DOE’s Loan Programs Office.

Sturgeon Electric Company, a MYR Group subsidiary, provided construction services for the transmission line, and Wilson Utility Construction Co. built the new substation in White Pine County, Nev.

The project also includes a new four-mile-long intertie line that connects the new line and substation to NV Energy’s northern service territory.

NV Energy, Inc.NV Energy, Inc. provides a wide range of energy services to 1.3 million customers throughout Nevada and nearly 40 million tourists annually. NV Energy is a holding company whose principal subsidiaries, Nevada Power Company and Sierra Pacific Power Company, are doing business as NV Energy. The company is headquartered in Las Vegas, Nevada. Information about NV Energy is available on the company’s website, Twitter, Facebook and YouTube pages, which can be accessed via nvenergy.com.

Great Basin Transmission South, LLCGreat Basin Transmission South, LLC is a single-purpose company formed to finance, construct, and own the ON Line Project. GBT South is an affiliate of LS Power, a leading independent power generation and transmission company. For more information, visit www.LSPower.com.

Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the future performance of NV Energy, Inc. (the “Company”).

When the Company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The Company’s expected results may not be achieved, and actual results may differ materially from expectations. This may be a result of various factors outside the control of the Company that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including the risks related to future economic conditions, future or existing Nevada or federal laws or regulations affecting the electric industry, changes in environmental laws and regulations, financial market conditions and the Company’s ability to maintain access to the capital markets, and operating and maintaining an electric and natural gas system. Unless the context suggests otherwise, references herein to the “Company” include the consolidated subsidiaries of the Company, including Nevada Power Company d/b/a NV Energy and Sierra Pacific Power Company d/b/a NV Energy.

Additional cautionary statements regarding other risk factors that could have an effect on the future performance of the Company are contained in its Annual Report on Form 10-K for the year ended December 31, 2012, and quarterly report on Form 10-Qs for the periods ended March 31, 2013, June 30, 2013, and September 30, 2013, filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this press release. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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During a breakfast meeting of the Green Alliance of Nevada on January 29, 2014, a “Future Economics of Energy in Nevada” panel convened.

Panelists included Paul Thomsen, Governor’s Energy Advisor and Director of the Governor’s Office of Energy; Tony Sanchez, Senior Vice President of Government andCommunity Strategy, NV Energy; Debra Gallo, Director of Government and State Regulatory Affairs, Southwest Gas Corp; and Dick Bartholet, Director of Research at the Bureau of Business & Economic Research/Center for Regional Studies, Nevada Small Business, University of Nevada – Reno.

A, Paul Thomsen outlined three areas of focus for the Governor’s Office of Energy:

1. Renewable Energy – As a utility, NV Energy has been mandated by the state legislature to provide 25 percent of its electricity to rate-paying customers from renewable energy sources by 2025, with a short term goal of 14 percent by 2014. The company has already exceeded this renewable portfolio standard timeline with more than 18 percent renewable energy resources now available. Tax abatement programs can help companies developing new renewable energy sources. $14 million in loans available

2. Energy Efficiency – EnergyFit of Nevada program has funding of $5 million over three years

3. Transmission/Export of Energy

During a panel discussion with the Green Alliance of Nevada last month about the “Future of Energy and Economics” in the state, both Paul Thomsen, Director of the Governor’s Office of Energy, and Tony Sanchez, Senior Vice-President for Government and Community Strategy at NV Energy, emphasized that the export and transmission of renewable energy generated within Nevada to neighboring states is a potential revenue booster and jobs creator.

The Western Governors Association is involved in regional energy growth and wants to create a “next-generation grid”.

B. Tony Sanchez spoke further about the acquisition of NV Energy by MidAmerican Energy Holdings Co., that will allow Nevada to export excess renewable energy production to other utilities that it owns in California, Oregon, Washington, Idaho, Wyoming and Utah. MidAmerican Energy Holdings Co. employs 19,000 people and its energy portfolio includes 25 percent of energy produced from wind and solar renewable resources.

NV Energy with 2,500 employees services 93 percent of Nevada residents with a client-base of 1.3 million. There are 41 renewable energy projects active in the state now producing about 1,000 Megawatts, or 1 Gigawatt of power but eventually renewable energy will need to compete in cost without subsidy support.

Smart meter distribution has been developing throughout the statewide NV Energy grid to make it more interactive for customer service, as 1.3 million meters have been installed with only 40,000 remaining. $139 million in federal funding made this effort possible over the last three years.

C. Debra Gallo of Southwest Gas Corp. talked about her company’s purchasing, processing and transport of natural gas products and services to 1.8 million customers in Nevada, Arizona and California.

The company also works to help facilitate programs for low-income residents and also provides rebates to encourage Energy Star-certified home building. 96,000 homes in Nevada are Energy Star compliant.

Compressed Natural Gas (CNG) can be used as a replacement fuel for fleet transportation and save about $1.55 per diesel gallon equivalent. Average annual cost is about $2.09 per equivalent gallon last year. Southwest Gas partners for CNG fleet development include Clean Energy Fuels, a CNG fueling station provider with a network of stations that it is developing coast to coast. Clean Energy Fuels is partially owned by developer T. Boone Pickens.

Taxi cab and limousine provider Whittlesea-Bell uses CNG in its vehicles in southern Nevada.

D. Dick Bartholet from University of Nevada – Reno talked about the challenges for renewable energy businesses in Nevada to become self-sustainable after five to fifteen years, especially when these businesses were subsidized initially. What happens to a business when the subsidies disappear, can it stand on its own resources after the money is gone?

Bartholet cited five factors that could influence the self-sustainability of a business model:

1. Supply and Demand for the goods and services of the business
2. Risk perception of the business model by consumers and suppliers
3. National politics
4. Technology changes
5. Comparative Fossil Fuel Extraction Costs

He noted that “peak oil” is not as popular a concept as it was just a few years ago, now that North America is producing 3 million barrels of oil a day more than 2008 production levels.

A manufacturing renaissance is evolving at the same time as energy production is increasing, leading to new demands for energy.

The likelihood of a carbon tax in the next decade is still a possibility given the volatile climate that most Americans are experiencing today, as well as concerns about the oceans and our food chain.

Energy security and economic security will be influenced by the presence or lack of political stability as well as well as by population demographic changes in developing countries.

Bartholet had some policy ideas that might help strengthen Nevada’s energy economy over the next fifteen years:

A. Increase electricity consumption but reallocate “peak demand” for electricity during the day. Electric vehicles can be recharged at night during non-peak hours.
B. Reduce energy consumption
C. Reduce automobile emissions
D. Reduce water consumption

Dick Bartholet’s eight state government policy recommendations:

1. Promote efficiency in building codes by striving for a higher number of LEED-certified buildings
2. Fund Energy-Efficiency and Renewable Energy programs
3. Accelerate use of alternative fuel vehicles to promote air quality
4. Fund alternative ways to enhance utility conservation programs
5. Expand energy efficiency to the supply chain through the choice of vendors at different levels of state government.
6. Create better support tools and models for decision-making such as input/output analysis, etc.
7. Establish energy efficiency and renewable energy targets beyond the present renewable portfolio standard.
8. Provide free assistance for small business start-ups, especially in the area of helping them comply with government mandates.

He noted that one of Nevada’s greatest assets – the state is a “small community that gets things done”.

Blog posted by Stan Hanel, NEVA Outreach Coordinator

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