By Mark Waite

CARSON CITY — Valley Electric Association is interested in constructing a new power line to Fish Lake Valley, to provide more reliable power to customers there as well as access geothermal energy projects in Mineral and Esmeralda counties, VEA general counsel Curt Ledford told the Nevada Assembly Commerce and Labor Committee Feb. 27.

But committee members had some critical questions about why the Valley Electric cooperative isn’t bound by requirements to purchase a percentage of renewable energy like other utilities, why it is subject to almost no oversight by the Public Utilities Commission and about recent contracts with the Nevada National Security Administration and Creech Air Force Base.

Ledford’s presentation recited basic statistics: VEA was incorporated in 1965, has 16,640 member owners, services 24,271 meters, has a service area of 6,849 square miles, 2,139 miles of distribution line and 346 miles of transmission line. He said the coop has 104 full-time employees — an increase of 30 percent in the last three years — $261 million in consolidated plant already with another $45 million budgeted for capital construction and equipment this year, and $71 million in annual revenue projected for this year.

Ledford said Fish Lake Valley isn’t connected directly to VEA’s transmission system, but through Southern California Edison in California, through a 100-year-old, 55-kilovolt line.

“Our goal would be to connect that part of our system to the greater part of the rest of our system. It would improve reliability to our customers in Fish Lake Valley and the added benefit is it captures stranded geothermal resources in Esmeralda and Mineral counties. We’ve been approached by geothermal developers saying, ‘this is your service area. How can we get good clean geothermal renewable energy out of here?’” Ledford said. “We’d be interested in purchasing up to 50 megawatts for the geothermal generation to be transmitted across our transmission line.”

In October the U.S. Bureau of Land Management completed an environmental assessment and issued a finding of no significant impact FONSI to Ormat geothermal for its Wild Rose project, a proposed 40-megawatt plant 17 miles west of Gabbs in Mineral County. Rampower hopes to start geothermal production in Clayton Valley, near Silver Peak; the company already controls 44,000 acres in the area and has signed a power purchase agreement with NV Energy.

VEA just energized a new 55-mile northwest transmission line around the Spring Mountains to connect with NV Energy in northwestern Las Vegas. That came after negotiations with the Las Vegas Paiute tribe to run the line through its Snow Mountain Reservation.

VEA also has an application under review by the U.S. Bureau of Land Management to build a power line to connect the 500-megawatt Hidden Hills solar plant with the California grid at Eldorado Valley south of Boulder City.

Ledford detailed the decision by VEA to join the California Independent System of Operators, which wasn’t completed until January.

“In 2010 we had approximately 3,000 megawatts of generation, all solar, in our interconnection queue. That’s roughly half, a little bit less than half, of the total amount in the State of Nevada. Almost all of those electricity developers were seeking delivery into the California markets. Without taking this move and taking this bold initiative, we were seeing these developers die on the vine. They were failing to be able to deliver to the points they were contractually bound to deliver to,” Ledford said.

If VEA didn’t join CAISO, a solar power generator would have to pay a rate over the transmission system they are seeking to cross, Ledford said; those lease rates would “get pancaked” and make a project more challenging because of the economics. Now any generator connecting to their 280-kilovolt line can deliver their power to CAISO without any increase in rates, a move Ledford said was a game changer.

VEA has a planned output of power equal to the output of Hoover Dam, which is 15 percent of Nevada’s total load, Ledford said. Many of the solar power generators have power purchase agreements with utilities, which he said is essential to building a project.

“Valley Electric has been a proponent of renewable energy for years. It was in a time we were facing significant economic recession that was really threatening the long-term viability of our company. We were declining in sales. We had customers leaving. We had over 20 percent unemployment. We heard of 30 percent foreclosures,” Ledford said. “Utilities are modeled on increases in rates, increases in size and when you have a decrease in size it kind of thwarts those models.”

But Assemblyman Maggie Carlton, D-Las Vegas, said of the agreement with CAISO, “you took Nevada business and gave it to California for your balancing authority.”

VEA Executive Vice-President Susan Fisher said, “by joining the California Independent System of Operators, they pay us for our excess capacity on our transmission lines. That puts more money into our Nevada members’ pockets, puts more money into our Nevada utility.”

Carlton also questioned the VEA contracts to provide electric transmission and dispatch services to the Nevada National Security Site, a $62 million, five-year pact, and the $23.6 million, 50-year contract to purchase, operate and maintain the Creech Air Force Base electric distribution infrastructure.

“Apparently that was an open bid process and you put in a bid for it and other companies put in a bid but I believe because other companies are under the PUC and had to work under certain guidelines, they may have been at a disadvantage in competing with you because there are certain things they had to provide and you didn’t,” Carlton said.

Ledford said the Public Utilities Commission only regulates their service territory and requires annual filings from Valley Electric. Assemblyman James Orenschall, D-Las Vegas, noted power companies like NV Energy have to go in front of the PUC to raise rates. Ledford said VEA is a democratically-controlled organization where members elect the directors who set the rates.

“If customers have issues with the rates that they are charged, their vote is at the ballot box. I’m pleased to say that in 2010, when we raised the rates in January, each one of our elected directors were re-elected in April, the following four months later,” Ledford said.

Assemblyman David Bobzien, D-Reno, hinted the Legislature may revisit Valley Electric’s exemption from having to comply with renewable energy portfolio standards in the future. That requires NV Energy to purchase 18 percent of their energy from renewable sources or through energy efficiency savings this year and 25 percent by 2025.

“Valley Electric is not opposed to a renewable portfolio standard. But we need to know what is the point? What is the purpose? If the purpose is to reduce greeenhouse gases OK, we can have that conversation,” Ledford said.

He referred to the VEA presentation, where the cooperative has tried to increase renewable power on a macro level with large scale solar power, and at the micro level, with net metering — that is purchasing power from people who produce energy from renewable sources like solar and wind — as well as the solar hot water heater program.

“I think Valley Electric has embraced a position of supporting renewables and we are as a group as municipal enterprises relatively carbon low,” Ledford said.

VEA Ambassadors suggested the solar hot water heater program back in 2006, Ledford said. After a pilot program, the installations began in 2009. He said through an agreement with the manufacturer, VEA provides the system at half the cost, which is paid by members with no money down and zero percent financing over a 15-year period. To date, 717 units have been installed, which Ledford said saves customers from $253 to $546 annually in energy costs.

Ledford said VEA also plans to extend fiber optic cable, recently installed on their 230-kilovolt line from Pahrump to Las Vegas, up to Beatty.