NV Energy CEO addresses plans for $1 billion power plant
After his company faced criticism for proposing to build a $1 billion power plant, NV Energy CEO Paul Caudill outlined the near-future plans on the 706-megawatt project, according to testimony he filed with the Public Utilities Commission.
“Let me be clear, NV Energy has not requested permission to build a new natural-gas-fired generating plant in 2020,” he said.
The company has asked regulators for $2.4 million to study building the $1 billion plant and described it as part of a “preferred plan” for the future. Solar, environmental and small-business groups in the state have already shown opposition. The proposal first appeared in a 4,493-page report that details the company’s energy supply plan for the next 30 years. The commission has jurisdiction to decide if the utility can fund the study and will do so by January. NV Energy, a regulated monopoly, is allowed to earn a 9.8 percent return on equity for infrastructure projects, meaning that it could send almost $100 million back to its shareholders for building the power plant.
“We will not develop a new, company-owned generating plant without evaluating all reasonable alternatives and obtaining commission approval through an open, public process,” Caudill said.
The company, owned by Warren Buffett’s Berkshire Hathaway, currently operates or has long-term agreements to buy power from 16 fossil fuel power plants, including coal and natural gas. The new plant would likely help replace the output of the company’s coal facilities, which NV Energy will phase out over the next four years. The power company also signaled in the report that it will likely end a contract with Star West Generation, a company that owns a natural gas power plant in Arizona that provides energy to the grid during Nevada’s hottest months.