MINUTES OF THE
SENATE Committee on Commerce and Labor
Seventy-First Session
March 22, 2001
The Senate Committee on Commerce and Laborwas called to order by Chairman Randolph J. Townsend, at 7:03 a.m., on Thursday, March 22, 2001, in Room 2135 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Randolph J. Townsend, Chairman
Senator Ann O’Connell, Vice Chairman
Senator Dean A. Rhoads
Senator Mark Amodei
Senator Raymond C. Shaffer
Senator Michael A. (Mike) Schneider
Senator Maggie Carlton
GUEST LEGISLATORS PRESENT:
Senator Alice Costandina (Dina) Titus, Clark County Senatorial District No. 7
Former United States Senator Richard H. Bryan, Nevada
STAFF MEMBERS PRESENT:
Scott Young, Committee Policy Analyst
Kevin Powers, Senior Deputy, Legislative Counsel
Sharon T. Spencer, Committee Secretary
OTHERS PRESENT:
Judy L. Stokey, Lobbyist, Nevada Power Company, and Sierra Pacific Power Company
Kathleen Drakulich, Lobbyist, Nevada Power Company, and Sierra Pacific Power Company
R. Michael Turnipseed, P.E., Director, State Department of Conservation and Natural Resources
Robert E. Campbell, Lobbyist, Duke Energy
Kirby Lampley, Policy Analyst, Public Utilities Commission of Nevada
Helen A. Foley, Lobbyist, Clark County Health District
Robert E. Stewart, Public Information Specialist, Bureau of Land Management, U.S. Department of the Interior
John C. Owens, Engineering Manager, Sierra Pacific Power Company
C. E. Edwin Fend, Lobbyist, American Association of Retired Persons
F. Robert Reeder, Lobbyist, Barrick Goldstrike Mines Incorporated
Douglas R. Ponn, Lobbyist, Nevada Power Company, and Sierra Pacific Power Company
Harvey Whittemore, Lobbyist, Nevada Resort Association
Michael A. Pitlock, Lobbyist, Shell Energy Services Company
Timothy Hay, Chief Deputy Attorney General, Bureau of Consumer Protection, Office of the Attorney General
Michael J. Brown, Lobbyist, Barrick Goldstrike Mines Incorporated
Russ Fields, Lobbyist, Nevada Mining Association
Scott M. Craigie, Lobbyist, Calpine Corporation, and Pinnacle West
Chairman Townsend opened the hearing on Senate Bill (S.B.) 362.
SENATE BILL 362: Consolidates and revises process for reviewing applications for permits, licenses and other approvals required to construct certain utility facilities. (BDR 58-689)
Judy L. Stokey, Lobbyist, Nevada Power Company, and Sierra Pacific Power Company, stated she supported the proposed legislation and introduced the next speaker, Kathleen M. Drakulich, who would present language for a proposed amendment to the measure.
Kathleen Drakulich, Lobbyist, Nevada Power Company, and Sierra Pacific Power Company, presented the committee with language for a proposed amendment to S.B. 362 (Exhibit C). Beginning on page 2 of the bill, Ms. Drakulich said, the proposed amendment to section 6 that states: “The commission has exclusive jurisdiction over an application for a permit for the construction of a utility facility with regard to the determination of whether a need exists for the utility facility” the following language would be added: “if that utility facility would otherwise be subject to Nevada Revised Statutes (NRS) 704.741 to 704.751.” She explained current statutes pertaining to the Utility Environmental Protection Act (UEPA), as found in NRS 704.820 to 704.900, needed clear language that would establish a consistent process for reviewing applications for permits and licenses issued by the Public Utilities Commission of Nevada (PUCN) for the construction of certain utility facilities.
Ms. Drakulich explained S.B. 362 was in no way intended to exempt construction of utility facilities from any requirements imposed by the federal government. Among those requirements, she continued, was the mandate that an Environmental Impact Statement (EIS) or an Environmental Assessment (EA) be completed prior to constructing utility facilities. She explained an EIS is a comprehensive scientific document used for assessing environmental needs. A finding of needs, Ms. Drakulich explained, refers to a proposed utility facility study to determine if the project complied with the goals of the PUCN to meet the needs of the customer as a reliant power source for the area. Environmental impacts could be any number of things including the visual impact a utility facility made on the landscape. Local considerations are oftentimes more stringent and restrictive than those which govern the federal process, and again Ms Drakulich cited visual impacts as one of those local, or regional, impacts. There were other issues that needed to be considered in the finding of needs assessment which had to be reviewed prior to constructing utility facilities such as changing environmental standards determined by the United States Environmental Protection Agency (USEPA), she said. The intent of the proposed legislation and the proposed amendment is to ensure the oversight process applied not only to the PUCN but also to all other permitting entities as well.
Ms. Drakulich continued the discussion on the proposed amendment by describing the changes made to section 8, subsection 2, paragraph (b), substituting the word “every” for the word “each” were purely grammatical corrections, and the change in section 8, subsection 4, deleted the requirement, “The commission shall serve a copy of its order and any opinion issued with it upon each party to the proceeding before the commission.” Section 10, subsection 1, paragraph (a), was changed to eliminate the language: “Electric transmission lines and laterals and transmission substations, and subsection 1, paragraph (b) eliminated the language: ”Gas transmission lines and laterals.” The substance of those changes, she noted, were agreed upon to ensure electric transmission lines, laterals, transmission substations, and gas transmission lines and laterals are not taken out of the legal process. In section 10, subsection 2, paragraph (b), the proposed amendment would delete the provision stating, “other than lines and substations that are or will be located entirely within the boundaries of a county whose population is 100,000 or more.” The provision would become paragraph (c) and would read: “when constructed outside any incorporated city,” and subsection 3 would add to existing language the clause, “or any county entirely within a population of 100,000 or more.” The change, she explained, would move the exclusion from section 10, subsection 1, paragraph (b), to section 3.
Section 11, subsection 2, paragraph (a), Ms. Drakulich continued, the proposed amendment added the phrase, “and the other permitting entities” after the words: “file with the commission,” and before the words: “an application . . .” She explained this change would ensure the obligation is on the party making the application to not only file the application with the PUCN, but also with all other local entities included in that definition to ensure they have early and thorough notification of all proposals. Another amendment to the proposed legislation modified section 13, subsection 2, paragraph (b), adding the phrase, “for the Nevada consumer.” Section 14 added wording pertinent to the filing of commission reports, as requested by PUCN, stating: “or 30 days prior to the commercial operation of the facility, whichever is earlier.” Ms. Drakulich said the final change would be to section 15, subsection 1, and changes the requirement that any party aggrieved by the final order of the commission on rehearing may obtain judicial review thereof by filing a complaint in a district court “30 days after the issuance of such a final order,” rather than stating that filing had to occur “within 30 days,” as appeared in the original language of the proposed legislation.
Senator Carlton asked for clarification on section 10 of the proposed legislation. Ms. Drakulich explained section 10 of the bill represented a request made on behalf of Pacific Gas and Electric (PG&E) to include the definition of associated facilities. The request was made because the company wanted to ensure, if it was building generating facilities located entirely within Washoe County or Clark County, it would be able to maintain the exclusion right of not having to hold USEPA permits as per current law. Pacific Gas and Electric defined the terms of electric transmission, gas power company transmission, and water and treatment facilities for the purposes of clarification and to ensure an associated facility would be able to maintain the exclusion. The proposed amendment made electric transmission lines the exception to the policy because, as a group, there was no consensus on this point, she said. Ms. Drakulich noted the gas transmission lines and laterals should maintain the USEPA permitting exclusion because, as stated in subsection 3, if those lines and laterals are outside an incorporated city, the exclusion was already in place and should remain in place. In order to preserve the USEPA exclusion for independent power plants, no USEPA permit was required if the gas transmission line was located entirely within Washoe County or Clark County regardless of whether it was an associated facility or a facility necessary for the construction of that generating plant, Ms. Drakulich concluded.
Chairman Townsend asked Ms. Drakulich to review the entire measure with the committee and to describe the benefits to the state if the bill was passed as amended. Ms. Drakulich said prior to the proposed legislation, the application permitting process was not streamlined and construction of generating facilities was a difficult matter due to the federal government, prolonging the EIS process. Senate Bill 362 expedites both the environmental assessment process and the application process for acquiring permits because it mandates that PUCN and all the local entities had 120 days within which to make a decision, provided that time did not encroach upon other federal requirements and all final federal government documents had been issued by the respective federal agency, she said. Furthermore, after the EIS was completed, Ms. Drakulich continued, a UEPA applicant had 30 days within which to file an amended and much more comprehensive application. When a federal agency review was not involved in the permitting application process, she continued, the process would take 150 days after an application was filed for a decision to be rendered.
Chairman Townsend asked Ms. Drakulich if all concerned entities within the industry had reviewed the measure and determined it to be satisfactory. Ms. Drakulich responded in the affirmative, adding those in the business, including independent power producers, were all in agreement the proposed legislation would minimize problems in the application and permitting process.
Senator O'Connell asked Ms. Drakulich how much time she thought the bill would save utilities, Ms. Drakulich responded approximately 6 months.
R. Michael Turnipseed, P.E., Director, State Department of Conservation and Natural Resources (SDCNR), said S.B. 362, explained that by definition, under section 4 of the proposed legislation, other permitting agencies included the State Environmental Commission and agencies within SDCNR, such as the Division of Water Resources, state engineer, and Division of Environmental Protection (DEP). Mr. Turnipseed said, unless the utility was planning on obtaining its water from a municipality, the utility would have to get a permit from the state engineer, and that cannot happen statutorily within 120 or 150 days. The utility would also have to obtain air quality permits from DEP, he said, and if the power plant was a geothermal facility, permits would also be required from the Division of Minerals because geothermal was a mined resource in Nevada. Mr. Turnipseed also pointed out the bill overlooked other important items in the application and permitting process, and found some of the language in sections 5 and 6 particularly troubling. Hydroelectric facilities would require permits from the state engineer.
Chairman Townsend asked Mr. Turnipseed whether the proposed amendments suggested by Ms. Drakulich would resolve some of the permitting issues. Mr. Turnipseed explained, if a project was to be built on federal land, an EIS or an EA would automatically be required, but if the project was to be built entirely on private land, no EIS or EA would be required as there was no federal jurisdiction on private land. Ms. Drakulich agreed with Mr. Turnipseed that section 8, subsection 1, of the proposed legislation confirmed that no federal environmental analysis was required on private land. The determination of need was limited to those utility facilities that had been proposed by a public utility to those who would otherwise be required in the electric resource planning process. All other permitting entities were to limit their consideration to those issues others need, in order to ensure there was no other issues local, state, and federal agencies would have to consider which had not already been taken into account in the UEPA or EIS process.
Mr. Turnipseed said as long as the proposed legislation made specific requirements of PUCN but did not impose additional burdens on DEP, the state engineer, or the environmental commission, he had no objections to S.B. 362. Chairman Townsend recommended Mr. Turnipseed thoroughly review the proposed amendment, once the language had been properly prepared, to ensure he had no further issues with the measure. The chairman suggested Mr. Turnipseed acquire the corrected amendment as soon as possible in order to ensure the permitting process was not interrupted for long periods of time, especially during the present time when the permitting of generating facilities was particularly crucial. Mr. Turnipseed agreed to the chairman’s request, and added SDCNR had recently permitted two water appropriations to sufficiently power Reliant, Duke, Murant, and Pinnacle West power plants.
Robert E. Campbell, Lobbyist, Duke Energy, said his company recently had an opportunity to participate with Senator Titus on developing language for the original draft of the proposed legislation; however, he added, his organization was not aware of the proposed amendment nor the recent discussions that had taken place regarding S.B. 362. He requested additional time to allow his organization to review the proposed language of the bill and its corresponding amendment before the committee took a vote on the proposed measure. Chairman Townsend agreed and granted Mr. Campbell and his organization an additional 2 hours to complete that review process.
Kirby Lampley, Policy Analyst, Public Utilities Commission of Nevada, stated the PUCN had additional concerns about section 10 of the proposed legislation. He said he was concerned that transmission lines that went from an exempt county, such as either Washoe County or Clark County, into a county that was not exempt from the USEPA permitting process, might slip through the cracks. Mr. Lampley said he hoped the proposed amendment would resolve his concerns. Ms. Drakulich affirmed the language of the proposed amendment to S.B. 362 would be written to guarantee the scenario described by Mr. Lampley would not occur. Chairman Townsend requested Mr. Lampley thoroughly review all aspects of the proposed legislation and its proposed amendment with his organization to ensure it was satisfactory to all concerned entities. Mr. Lampley agreed to the chairman’s request.
Helen A. Foley, Lobbyist, Clark County Health District (CCHD), said she was in attendance today to represent the Air Quality Division of CCHD. Ms. Foley requested she join the group to review the language of the proposed legislation and its amendment in order to ensure specific issues of concern to her organization had been addressed. She said she was concerned that certain time lines were required by USEPA, and those could not be shortened. However, she added, she would prefer the language of the proposed amendment be written to allow her organization to review specific issues pertaining to the economics and feasibility of constructing power plants rather than to concentrate solely on location and environment.
Ms. Foley said the change from a 30-day time line to a 15-day time line conflicted with her agency’s mandate which was 30 days as per federal law. She suggested CCHD could run that time line concurrently when USEPA ran its 15-day notification time line, as per current federal statute. Ms. Drakulich stated the proposed amendment had returned that time line back to 30 days. Chairman Townsend stated it was a complicated matter when large companies made application, particularly in areas of environmental sensitivity. He said he hoped, in the spirit of addressing the western concern regarding energy issues, all involved agencies would work together to assist applicants to ensure appropriate standards were met. Cooperation was important to make certain all entities worked together to complete and expedite the application and permitting processes.
Robert E. Stewart, Public Information Specialist, Bureau of Land Management (BLM), U.S. Department of the Interior, stated he was appearing before the committee on behalf of state BLM director Robert Abbey who was unable to attend the hearing. Mr. Stewart, in the handout he provided to committee members (Exhibit D), explained S.B. 362 addressed the relationship between PUCN and federal agencies concerning rights-of-way for transmission corridors, natural gas pipelines, and related land uses. He said the BLM had a long-standing policy of working closely with state agencies on projects of mutual interest. In considering specific land actions, Mr. Stewart noted, the BLM is concerned that a proposed project could cause undue or unnecessary degradation of public lands; therefore, it was important to coordinate support between the PUCN and the BLM to determine a particular project is needed and valid; it is in the public’s interest; it is not harmful to the environment, and it satisfies all legal requirements. Although facilities were most often built on private land, he concluded, access to public lands was often necessary for transmission corridors and thus the right-of-way issue became the concern of his agency. Mr. Stewart assured the committee the BLM would continue to coordinate with all involved state agencies, including the state Office of Historic Preservation and DEP.
Senator Rhoads asked how long it took to acquire a permit. Mr. Stewart responded there was no set time because it varied, depending upon different factors involved in different projects. Specifically, he added, those factors were most often DEP and USEPA requirements. He noted the average planning time was approximately 3 years.
Senator O'Connell asked if there was one state agency that moved faster than others. Ms. Stokey responded, most of the time, the southern part of the state was on a faster track, particularly Clark County, due to good communication among all involved entities and the fact that Las Vegas was overall on a faster track and had more complex needs than the rest of the state.
Chairman Townsend asked Mr. Stewart whether there was something the legislature could do to help the BLM understand the need for expedited methods of streamlining the application and permitting process for power production, as this was not just a state issue but also a western regional issue and a countrywide issue. Mr. Stewart stated, throughout the western United States, the federal agencies who dealt with applications for power transmission lines and related services were faced with workloads previously unexpected and unanticipated; therefore, it was important to assist in helping Congress understand the impact federal policies have on Nevada.
John C. Owens, Engineering Manager, Sierra Pacific Power Company, came forward with a two-page graphic exhibit demonstrating statistics on the current versus the proposed transmission line permitting process, of which one page pertained to information relevant to federally approved projects and the other page pertained to projects not requiring federal approval (Exhibit E). Mr. Owens said he wanted to address the issue of time frames for the various stages of the permitting process. He said the PUCN permitting requirements did not add a significant amount of time to the review process, and he felt the USEPA process would not be a problem either. He said an EA would take approximately 12 to 18 months per project to complete and would culminate in the production and issuance of a formal EIS. Once that federal analysis was done, the local permitting process would begin, he said. The local use permitting process would take an additional 4 months to complete, and after that, in the north, the regional planning process would begin. Mr. Owens said there was a limit of 120 days after the USEPA process was completed for the local and state reviews to also be completed. If there was no benefit of having a federal analysis performed because none was required, he said, local and state agencies would be allowed additional time, 150 days, to process permit applications. If a project had gone through the entire process, but for some reason had to be changed, the process in its entirety would have to be repeated, he explained, and that requirement exists both currently and in the proposed legislation. Mr. Owens concluded by expressing support for S.B. 362, stating the legislation would standardize, expedite, and clarify the review process.
Chairman Townsend asked if an application for a permit, on a project that required federal approval, was rejected, for whatever reason, what happened and how long it would take for the applicant to find out there was a problem. Mr. Owens said that would depend upon what agency found the problem. The federal process required a close interaction between agency staff and the applicant and notification was fairly immediate. Remedies to solve the issue would be provided quickly in order not to unduly delay the review process. However, he added, local and state agencies involved different circumstances and the review process differed from the federal process. Resolutions for correcting application problems in the local arena were not offered in an ongoing process as they were in the federal arena, but those agencies also considered it imperative not to stall the review process unnecessarily. Ms. Drakulich added S.B. 362 encouraged local agencies to present complete and accurate filings because, most often, different entities discovered problems in applications at different times. The proposed legislation made it clear cooperation in facilitating the permitting process was primary. Chairman Townsend said the issue being discussed was bigger than any individual or any entity. It was an issue about an entire region being energy-starved, and if the legislature and the various agencies involved do not act without lowering environmental standards, it was essential that full cooperation existed and that applications were not stalled for any reason.
C. E. Edwin Fend, Lobbyist, American Association of Retired Persons, said his organization supported the proposed legislation and considered it to be a means of expediting the review process for approving power-generating plants. He suggested notifying Nevada’s Congressional Delegation to encourage them to enhance local BLM offices which are understaffed.
F. Robert Reeder, Lobbyist, Barrick Goldstrike Mines Incorporated, in response to a question from the chairman, said the energy used by Barrick Goldstrike’s mining operation represented a quarter of a base load of energy, which equaled approximately 250 megawatts of electric power. The statement was confirmed by Douglas R. Ponn, Lobbyist, Nevada Power Company, and Sierra Pacific Power Company, who added the amount was approximately 26 percent of the company’s power load, of which one half was purchased for the southern part of the state and slightly less than half was purchased for the northern operation. Mr. Ponn added that amounted to approximately 2200 megawatts with a peak of approximately 4700 megawatts.
Chairman Townsend asked Mr. Ponn how much lead time those in the industry needed in order to purchase enough power in advance to sustain customer demands and to ensure their company did not end up with purchase power agreements that were no longer viable. Mr. Ponn said approximately 2 years’ notification was needed in order to ensure adequate energy supplies were available to the customer base. Chairman Townsend said if a plant was built for northeastern Nevada, a gas pipeline would have to be constructed to accommodate the energy needs of that facility. If it was possible for power companies, working together, to secure enough power through contracts to supply their demand, how much time was needed to mitigate energy shortages for such a large entity. Mr. Ponn responded at least a year was needed to plan for such an occurrence, using a blended portfolio.
Senator Carlton asked Mr. Ponn if contracts were available for purchasing additional power for the northern part of the state, could power companies turn around and sell that power to California for a profit. Mr. Ponn said there were transmission constraints in the northern part of Nevada that could conceivably inhibit some energy transactions.
Harvey Whittemore, Lobbyist, Nevada Resort Association, stated his organization agreed with the assessment of Mr. Ponn regarding notification requirements. Mr. Whittemore suggested the committee might want to implement some kind of queuing system to ensure notice is provided early to ensure the application process goes forth. He also suggested the committee develop a mechanism to ensure the utility companies have sufficient capacity to deal with the notification process on a timely basis in order to inform customers they need to acquire their power load from other resources. Mr. Whittemore said 24 to 36 months’ time was needed to acquire sufficient power loads and negotiate in the market place. Mr. Ponn added that large customers would need approximately 2 years to complete the process. He said it was also necessary to consider that large energy customers who leave the state must leave large portions of their energy load with new resources in Nevada.
Michael A. Pitlock, Lobbyist, Shell Energy Services Company, stated it was possible to spend a great deal of time speculating how long it might take for the market to respond to either the needs of a large customer in Nevada or to an aggregated group of residential customers in the state. He pointed out his organization had developed a proposal in which a method was formulated that was able to determine, for an aggregated group of residential customers in Nevada, what could be done, how quickly it could be done, and under what specific terms and conditions it could be done by using market analysis rather than speculation.
Chairman Townsend asked if a portion of the energy load was to be removed from the current system, would whoever left the system have to find a new local source of native power generation, rather than purchase it from the marketplace. The chairman explained he was asking the question because he wanted to know whether it would be logical to purchase power from a new supplier rather than purchase power from one who currently holds the contract. Timothy Hay, Chief Deputy Attorney General, Bureau of Consumer Protection, Office of he Attorney General, pointed out the proposal prepared by his agency and presented to the Governor’s Energy Policy Committee suggested it would be beneficial to allow large customers and aggregated groups of small customers to leave the system under the condition they procured a portion of approximately 50 percent of their capacity required from new sources of generation indigenous to Nevada. For residential customers and small commercial customers, the matter was tied to the divestiture issue and new cost-saving energy resources coming from generating facilities outside the state.
Mr. Whittemore agreed with Mr. Hay that 50 percent was a good percentage base because it would allow the state to immediately purchase up to 50 percent on the market with the understanding that was the maximum purchase amount allowed until after purchasing the remaining portion of the load from new generation. He said it was a phasing-in requirement consistent with the understanding that if a customer enters into a long term contract, that customer would essentially be tying up energy loads which would otherwise be going to California or Arizona. Mr. Whittemore said it was critical that additional generating plants be built in the state because, without more local energy production, Nevada was only load shifting from wholesale to retail. Mr. Pitlock agreed and pointed out there was a long-term objective and a short-term objective to consider. Regarding the long-term objective, a 50 percent split would provide incentive to bring power plants into Nevada because it took so long to get them on-line. However, until more market studies were done on the issue, it would be beneficial for the state to be flexible regarding the 50 percent split. The short-term objective, he added, was that it would be beneficial to explore existing markets to determine if there were current market benefits available to the state. He pointed out it was necessary to view the energy market regionally. In addition, Mr. Pitlock noted, there were existing transmission problems within the state, and those concerns varied dramatically from northern to southern Nevada.
Senator Shaffer asked for a representative of the mining industry to provide the committee with an estimate of how many years it would take until existing mines played out. Mr. Reeder said he did not know but added that his company has planned for future energy uses for the next 5 years. Michael J. Brown, Lobbyist, Barrick Goldstrike Mines Incorporated, noted his company currently had a 15-year mine plan because gold was continually being discovered.
Chairman Townsend asked Mr. Ponn whether there were any schools in Nevada that were on an interruptible power rate. Mr. Ponn responded in the negative. The chairman then asked what the best way would be to handle a situation in which there was too much load on an already strained system, with due consideration to the fact that strained systems were expensive and time-consuming to permit and expand. Mr. Reeder said one alternative to that problem was to allow the market to suddenly open in a limited way, such as by signing a contract to purchase energy from a utility company. He called this a “buy-through-contract.” The chairman asked Mr. Ponn whether that arrangement was less likely to leave residential customers with stranded costs. Mr. Ponn responded in the affirmative and added it was important to identify all ongoing issues before determining the best public policy to follow.
Chairman Townsend asked whether there was a mechanism in place anywhere in the country to help citizens whose long-term energy contracts are suddenly lost, and how much would they have to pay in order to get picked up again by an incumbent power company. Mr. Pitlock said current statute partially provides a starting point for such a policy debate.
Chairman Townsend asked what assurances can residential customers be given to promise them they will not bear huge financial burdens if additional energy supplies are secured. Mr. Reeder reiterated what Mr. Pitlock said regarding current statute, and added if those customers came back to the incumbent power company, they would come back gradually and in incremental market costs.
Russ Fields, Lobbyist, Nevada Mining Association, said he was pleased with the current trend of the discussion; specifically, that no conversation currently included the notion of being forced off the grid with no place to go for power. He said the current discussion was more concerned with reasonable phase transition and options to secure future energy sources for the mining industry. The chairman said native generation of power was probably the best long-term source of energy for residential customers in Nevada. In addition, Chairman Townsend added, in southern Nevada the peak load is twice what the base load is.
Mr. Pitlock said he had an additional concern regarding the issue of future projects in Nevada. Specifically pending projects for the production of vast amounts of generation fueled by a single fuel source, natural gas, the price which is very volatile. In order to provide incentives to build power-generating facilities in Nevada, he stated, it was essential not to focus on only that one fuel source, but to also consider coal as a possibility. Having only gas-fired generation would put the state and the region at the mercy of the price of natural gas; therefore, it would be wise to diversify Nevada’s fuel portfolio for the long-term planning, Mr. Pitlock warned. The downside, he added, was that site development, permitting, and construction of coal-fired plants took much more time to get on-line than natural gas plants. Mr. Brown agreed, and added the mining industry was conducting feasibility studies regarding coal-powered generating facilities, including clean-coal technology from Wyoming. He said coal-powered facilities took, on average, 42 to 48 months to get up and running, but he considered coal a realistic addition to diversifying Nevada’s fuel portfolio. Chairman Townsend said it was advantageous to consider geothermal as a viable fuel source for power generation. And, because geothermal power is considered a mined resource in the state of Nevada, a mineral permit would also be needed.
Scott M. Craigie, Lobbyist, Calpine Corporation, and Pinnacle West, pointed out the long-term solution was development and construction of generating facilities. In addition, fundamental changes needed to occur in the way the current marketplace functioned overall. He suggested using the method of Arizona, which developed a marketplace for independent power producers that significantly changed the way incumbent power companies managed jobs of building and operating generation and selling and purchasing power for their customers by finding the best energy prices available in the marketplace and developing the best contract terms possible. This method, he said, facilitated the next phase of the transition process, which was that some customers would drop power supplies from the incumbent source and would create a marketplace designed for independent power producers as well as provide the best energy costs for customers.
Chairman Townsend said of particular concern was the lack of power transmission in southern Nevada. He asked if all four plants that recently received water permits were to come on-line within the next 36 months, and there was no additional transmission developed, how much of that capacity could be transferred to consumers. Mr. Ponn said only a fraction of that capacity would be available due to the lack of transmission lines.
Chairman Townsend welcomed former United States Senator Richard H. Bryan to the proceedings.
Senator Alice Costandina (Dina) Titus, Clark County Senatorial District No. 7, explained the intent of S.B. 362 was to streamline the licensing and permitting process for new power generators in Nevada. Since then, the senator continued, much effort had been put into working out the details of that proposal with all concerned entities involved. Senator Titus pointed out the committee had repeatedly heard California’s main problem is the lack of power generation and market forces cannot operate to bring power prices down if there is too little supply of energy. The solution to the problem was to expedite the process of permitting generating facilities in Nevada, she said.
Senator Titus said the bill required that various application processes occur simultaneously instead of serially. It provided better coordination among the different levels of the process, allowed all entities to get involved early in the process and all the different levels of government to be informed as the process developed. In addition, she added, S.B. 362 covered generators, transmission lines, and water and sewer connections to the plant. The proposed legislation did not shorten the period for comment from the public or for notice of any part of the permitting process, nor did the bill weaken any environmental standards, she said. Senator Titus encouraged the committee to support the measure. Chairman Townsend stated the bill was an important step in the process of establishing an expedited and thorough permitting process for power generation in Nevada.
The chairman asked if there was any additional testimony and there was none. He then asked if there were any further questions and there were none. Chairman Townsend called for a vote on the measure.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS S.B. 362.
SENATOR SHAFFER SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
*****
There being no further business before the committee, Chairman Townsend adjourned the meeting at 10:00 a.m.
RESPECTFULLY SUBMITTED:
Sharon T. Spencer,
Committee Secretary
APPROVED BY:
Senator Randolph J. Townsend, Chairman
DATE: