Sierra Pacific spending big to keep on pace with growth

Nevada's biggest utility plans to spend nearly $3.5 billion on new generating plants in the next decade, but its top executive says Sierra Pacific Resources expects it will just barely keep up with growing demand.

Construction has started on the first major expansion project a 514-megawatt coal-fired plant at Tracy, along Interstate 80 east of Sparks and the Reno-based utility company is planning big power plants near Ely to generate another 2,500 to 2,800 megawatts of electricity.

A megawatt of generating capacity is enough to serve about 600 homes.

Even with all the new construction between now and 2015, Sierra Pacific Resources won't make much headway toward its goal of generating more of its power in-house and buying less on the open market.

On the hottest day of last summer, Sierra Pacific Power was able to meet about 60 percent of its customers' demand from its own generation. It bought the rest of the power it needed from outside suppliers.

"Building those plants keeps up with load growth, but doesn't advance the ball a whole lot," said Walt Higgins, the company's chairman and chief executive officer.

In fact, Higgins told investment analysts a few days ago, the company's two subsidiaries Sierra Pacific Power in northern Nevada and Nevada Power in the Las Vegas area are on pace this year to match or exceed their records for new customer hookups.

The new $420 million plant at Tracy is expected to begin meeting the demands of Sierra Pacific Power customers in mid-2008. CH2M Hill won the engineering and construction services contract for the Tracy plant.

The big facilities at Ely, with transmission lines to link the plants to customers on both ends of the state, are projected to come on line between 2011 and 2015. The cost of the first phases of that project is estimated at more $3 billion.

Higgins told analysts the utilities also are on track to meet state requirements that it produce 20 percent of the power needed by its customers in 2015 from renewable sources.

"We are now seeing significant progress on renewable energy in Nevada," he said.