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NV Energy applies for $1.8B for ending coal, adding solar and transmission

Feb 04, 2024

NV Energy submitted its fifth amendment to its Integrated Resource Plan that seeks approval to spend over $1.8 billion for infrastructure projects.

NV Energy plans to spend $1.8 billion on new infrastructure that will add solar power for the Sphere, help turn off Nevada’s last coal plant and add more transmission lines that will eventually be paid for by customers.

An application submitted by NV Energy to the Public Utilities Commission this week seeks approval for an amendment on its infrastructure plan to approve spending for projects, including a $1.56 billion solar facility in Northern Nevada, $83 million for converting NV Energy’s last coal plant to run on natural gas, $54 million to prolong a power plant’s life cycle and $173 million for transmission infrastructure improvements throughout the state.

“The amendment reflects the best path forward to balance the stability and reliability of our energy grid while working toward the goal of reducing carbon emissions,” said Doug Cannon, NV Energy’s president and CEO, in a statement when NV Energy previewed this spending application in July.

One of the most significant aspects of the amendment is a proposal to spend $83 million to convert North Valmy Generating Station from coal to natural gas, which will continue to produce 261 megawatts of energy. This would end all coal generated power in Nevada, and the plant could fully convert to natural gas by May 2026.

The largest spending sought in the application is for the Sierra Solar project, which is projected to cost about $1.56 billion to build both its 400 megawatts of generating capacity and 400 megawatts of energy storage and to upgrade transmission infrastructure to help the facility’s operation. NV Energy is proposing that its Southern Nevada coverage area should handle about 60 percent of the project’s cost and its Northern Nevada area will cover the remaining 40 percent.

The storage component of the Sierra Solar project is projected to be completed in July 2026, and the power generation component is slated to complete in April 2027. The company said that there are many benefits of adding the solar facility to Northern Nevada and it could add 500 construction jobs.

“It will help reduce dependency on fossil-fueled generation and the volatile wholesale market, promote diversity of supply side resources and retail prices stability and protect reliability,” NV Energy wrote in its application.

The Sierra Solar project also should provide 70 percent of the energy used by the Sphere and provide the rest of its energy resources to other NV Energy customers.

There was also a sense of urgency in the application for the Sierra Solar project to be approved because NV Energy has had four large solar projects since 2018 that have been delayed or canceled. The four solar projects would have brought 1,100 megawatts of solar power and 795 megawatts of energy storage, according to testimony from Ryan Atkins, vice president of resource optimization for NV Energy.

“This (Sierra) solar facility would provide critical renewable generation to offset the loss of (canceled solar projects),” said Atkins in filed testimony.

Some concerns were raised that the solar development issues could affect the company’s ability to meet state-mandated clean energy goals of having 50 percent of energy in Nevada generated by renewables by 2030 and to have net-zero carbon emissions by 2050.

NV Energy’s Southern Nevada coverage area is projected to be compliant with state energy standards up to 2029, and its Northern Nevada area will be compliant until 2033, according to testimony from Gaurav Shil, the director of renewable energy and origination for NV Energy.

“(NV Energy) will continue to evaluate existing and pipeline projects and take corrective actions, so that it remains on track to meet all its renewable goals, commitments and statutory requirements,” Shil said. “Conservatively, it can take four to five years … to bring a new project online if the utility has site control and sufficient transmission capacity and neither utility wants to be in a position where it could face non-compliance within a five-year or less time frame.”

The application also proposes to spend $54 million to extend the life cycle of certain components at the Frank Tracy Generating Station, which uses natural gas, to the end of 2049. These components were originally scheduled to retire in 2031. NV Energy also is seeking to spend $173 million to build new electric substations throughout Nevada.

According to PUC regulations, a ruling on this amendment could happen sometime near the end of 2023 or the start of 2024.

Contact Sean Hemmersmeier at [email protected]. Follow @seanhemmers34 on X.