By Mark Waite
Valley Electric Association just landed a major account — the Nevada National Security Site, formerly known as the Nevada Test Site.
The National Nuclear Security Administration announced Friday it had awarded a five-year, $61,635,257 contract to VEA to provide electric services. After the initial five-year term, both sides can negotiate terms for another five-year option.
VEA will construct a 5.3-mile, 138-kilovolt power line to the NNSS Mercury Switching Center as part of the contract. The NNSA said the existing transmission system is over 50 years old, the new line will increase the reliability of the power supply, eliminate longstanding low voltage concerns and increase the capacity of the on-site system from 40 megawatts to 70 megawatts.
The NNSA had a previous agreement with NV Energy to provide electrical service. The NNSA estimates they will achieve savings of 1.4 percent on electric service. In addition the NNSA will save about $200,000 per year on power system monitoring and control services.
The contract becomes effective Nov. 1. VEA has one year to construct the new power line, which will connect with the new 238-kilovolt northwest transmission line Valley Electric constructed around the Spring Mountains. VEA is already connected to the site at Jackass Flats near Lathrop Wells, while NV Energy has a connection at the Mercury switching center. The new power line will be a third connection.
“We’ve always gotten our power from Nevada Energy. As a means of seeing if we could achieve efficiency for the taxpayers, we put it out to bid,” NNSA spokesman Darwin Morgan said.
Valley Electric will power all the facilities at Mercury and other areas on the NNSS, including the device assembly and Jasper project. Kevin Thornton, an NNSS electric engineer, said the Nevada National Security Site has about 100 miles of 138-kilovolt transmission line with seven substations on the loop and about 600 miles of distribution lines.
VEA will be paid a fixed rate of 6.87 cents per kilowatt hour, Thornton said. The cooperative was one of only two qualified bidders, he said, based on service territories established by the Public Utilities Commission.
“We’re very pleased that we have this done. We’ll save a little bit of money. We’re excited about that third line coming to the site; that will add extra reliability to our site, which we need,” Thornton said. “We looked at their proposals and vetted them, but everything I’ve seen from Valley Electric Association is they’re a top quality outfit and they’re very sophisticated.”
During a speech to VEA ambassadors in September 2010, Chief Executive Officer Tom Husted said the NNSS is about half the size of the entire VEA system.
“We’ve got a certain amount of fixed costs within Valley Electric, whether we’re serving 1,000 customers or 10,000 customers. This additional energy sales allows us to have a larger base to spread some of those fixed costs over. It allows us also to make some additional margins,” he said.
Margins are the term used for profits at the cooperative. Husted said by expanding the base of operations it gives Valley Electric a way to spread out costs so there are monetary gains, reducing the operating cost per kilowatt hour.
The NNSA is unique in the state of Nevada in having the ability to choose power suppliers, Husted told the ambassadors. He said a number of years ago VEA provided power to what was then known as the Nevada Test Site. The NNSA contacted Valley Electric about providing them with power and in the future possibly operating, maintaining and managing their system, he said.
VEA also bid on supplying power to Creech Air Force Base, which is near the NNSS at Indian Springs.