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NV Energy, LS Power Partner on Nevada Transmission Line

NV Energy has dropped plans to build a transmission line through Nevada, announcing on Monday that it had instead signed an agreement with an LS Power affiliate, Great Basin Transmission, to jointly own a 500-kilovolt (kV) transmission line running 250 miles from north of Las Vegas to near Ely, Nev.

NV Energy, Nevada’s largest power company, and LS Power were each developing separate lines in the same Southwest Intertie Project (SWIP) corridor for two now-defunct plans for coal-fired power plants in Ely. According to the Las Vegas Sun, the companies had been competing for contracts from renewable energy developers and federal financing since the coal plants had been cancelled.

NV Energy in February 2009 shelved plans to develop the $5 billion, 1,500-MW Ely Energy Center until technology for capturing and storing carbon dioxide pollution becomes commercially feasible. Weeks later, LS Power postponed plans to build the controversial 1,600-MW White Pine Energy Center nearby.

The separate lines proposed by each company would have run from the Harry Allen substation north of Las Vegas to a substation just south of Ely and cost $500 million. NV Energy dropped its plans to take on a 25% investment in the SWIP, which could eventually be built through eastern Nevada and all the way from Southern California to Idaho. The southern portion—first phase of the project—is expected to begin this summer. Completion is anticipated in 2012.

Under the memorandum of understanding signed by the companies on Monday, NV Energy would purchase Great Basin’s share of capacity on the jointly owned line.

Great Basin has reportedly obtained major federal, state, and local approvals required to build the line, and both companies are seeking a financing agreement with Western Area Power Administration pursuant to federal borrowing authority granted under the American Reinvestment and Recovery Act of 2009. NV Energy estimates the line would cost about $600 million.

“This project is a great example of how the local utility, an independent energy project developer and the Federal Government can work together to deliver a project that is superior to the alternatives. It will enable transmission access for renewable energy projects that were otherwise isolated from the market and provide reliability, efficiency and other benefits to the transmission system,” said Mike Segal, chair and CEO for LS Power, said in a statement.

Joint ownership of the project is contingent upon the execution of final agreements and would require the approval of the Public Utilities Commission of Nevada and the Federal Energy Regulatory Commission. NV Energy plans to file the joint ownership proposal as its preferred alternative in its upcoming Integrated Resource Plan filing with the commission next month.

Sources: NV Energy, LS Power, POWERnews, Las Vegas Sun

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