NV Energy will study the possibility of more closely aligning its transmission grid with the grid in California, and the study might have implications for the development of renewable resources in Nevada.
An executive of the Nevada utility cautions, however, that the complex study is likely to take a while, and no one can predict with any certainty what the result might be.
A top state official agrees that there's no reason to get excited yet.
NV Energy and the California Independent System Operator Corp. jointly announced last week that they will study the potential for development of transmission facilities between the two systems.
The two companies said, too, they want to look at ways to share power resources both renewable as well as conventional coal- and gas-fired plants to meet the needs of customers in Nevada and California.
The California Independent System Operator better known by its ISO initials manages the flow of power through about 80 percent of the grid in California.
Every five minutes, it forecasts electric demand in California and arranges to buy it from the lowest-cost generating plant that's available.
Developers of renewable-power projects in Nevada geothermal and wind in the north part of the state, solar in the south have been eager to develop better transmission links between the two states.
While state requires NV Energy to buy a steadily growing portion of its power needs from renewable facilities, demand for electricity in Nevada has been stagnant with the recession.
Demand from California consumers might spur the renewable power industry in Nevada if transmission issues can be worked out, backers of the renewable industry say.
Jack McGinley, director of regulatory and legislative strategy for NV Energy, says that numerous complex questions must be addressed in the study, which is expected to begin this month.
The Nevada utility and the California ISO will be modeling production costs of generating facilities in the two states and looking at the economics of a network that links the grids in the two states.
Stacy Crowley, director of the Nevada State Office of Energy, says the state is open to looking at all sorts of options for its electric transmission infrastructure. But until the study is completed, she said the state can't even identify what options are available to it, let alone which might be best.
Ultimately, McGinley says, the question is fairly simple: Do the benefits of a linkage between the two systems outweigh the costs?
About a year ago, NV Energy spearheaded an initiative to determine how interested developers of renewable power plants might be in planning and financing additional transmission.
"We've completed our assessment and determined that it is insufficient to proceed with the project at this time. While we are disappointed, we remain committed to exploring other avenues for transmission investment," NV Energy President Michael Yakira told investment analysts last month.
