By Mark Waite
Valley Electric Association extended an offer to Overton Power District No. 5 to share services, but Overton Power General Manager Delmar Leatham discounted any talk of a merger.
The letter from John Maurer, president of the VEA board of directors, suggested the respective cooperatives consider a joint merger/acquisition/shared service study.
“Valley recognizes that this may be an unexpected proposal, but we strongly believe that such a study may lead us to find efficiencies, cost savings and improved services that are beneficial to our ratepayers/owners,” Maurer’s letter states.
VEA suggested if the Overton Power board of directors are amenable, both utilities would assign a working team made up of directors and executive staff to begin formulating a study process.
Leatham said his board has been talking about setting up a meeting with Valley Electric Chief Executive Officer Tom Husted to discuss the proposal.
“While merger has a wonderful ring to it, we’ll more likely be talking about shared services that may prove beneficial to us both. You get a little bigger, you can afford to buy a little larger quantity of stuff. That’s more likely what we will be,” Leatham said.
“I don’t know if we want to rule anything out, but we’ll sit down and have discussions about what may be beneficial to both utilities. Really, at this stage, it will be exploratory to see what the opportunity there is for some shared services,” he said.
Both utilities purchase power on the open market, a possible way to share costs, Leatham said. His cooperative isn’t big enough to hire some technical help but could share the cost of some expertise with VEA, he said.
Leatham is the president of the Nevada Rural Electric Association, which represents rural cooperatives like Mt. Wheeler Power in Ely, Wells Rural Electric and the Lincoln County Power District. VEA broke away from the Nevada Rural Electric Association claiming it had its own unique interests and hired their own lobbyist.
Both cooperatives were active in the political campaign as well. Leatham ran for the Nevada District 36 assembly seat against James Oscarson, whose wife is the key accounts manager for Valley Electric. Leatham out-polled Oscarson in Clark County in the June Republican primary 646 votes to 143, but Oscarson won big in Nye County to defeat Leatham 1,618 votes to 1,220, a margin of 41.34 percent to 31.17 percent.
Valley Electric has been embarking on a major expansion recently. In October it was announced VEA was given a five-year, $61.6 million contract to provide electric service to the Nevada National Security Site, formerly known as the Nevada Test Site. The following month, there was an announcement VEA landed a $23.6 million contact to provide electrical distribution services at Creech Air Force Base.
VEA is completing a new 55-mile, 230-kilovolt power line around the Spring Mountains to connect with the NV Energy grid in northwest Las Vegas, a $32 million project, and has an application with the U.S. Bureau of Land Management to construct a 500 kv line connecting the Hidden Hills solar plant on Tecopa Road with transmission facilities in Eldorado Valley south of Boulder City.
Valley Electric also finalized its entry as the only out-of-state member of the California Independent System of Operators CAISO , a group of electrical utilities that services 80 percent of the California grid.
Last week Nye County Commissioners approved the granting of perpetual and temporary easements for VEA transmission lines being installed east of Pahrump. The new 11.2-mile power line, estimated to cost $10.3 million, connects the Pahrump substation near Highway 160 and Calvada Boulevard with the Vista substation at the far north end of town. The approval was granted under the county commission consent agenda, in which a number of items can be approved with one vote and without any discussion.
One landowner, Anson Avery, of Spokane, Wash., threatened to sue VEA after claiming the cooperative planned to take an easement across part of his property by eminent domain. Valley Electric offered him $50,166.94 for the property, what it claimed was fair market value.