Benefits to the local and regional economy and the roughly 17,500 members of Valley Electric Association Inc. will soon be felt following the completion of the sale of the association’s 164 miles of high-voltage transmission lines.
The sale of the 230-kilovolt transmission system that spans across Clark and Nye counties was finalized as executives from Dallas-based GridLiance Holdco, an independent transmission company, and Valley Electric held a news conference and signing event at Valley’s conference center at 800 E. Highway 372 on Wednesday.
GridLiance acquired the lines for $200.6 million, 2.4 times the book value.
“With the utilization of the additional capital, we’ll be able to buy down debt; we’ll be able to invest in other capital infrastructure such as broadband, rate stability and a host of other activities,” Valley Electric Association CEO Thomas Husted said during the event.
Husted was joined by Calvin Crowder, GridLiance president and CEO, and Justin Campbell, president of GridLiance West Utilities, along with roughly a few dozen event attendees.
Valley Electric, a member-owned nonprofit electric utility, also sent out premium checks, as part of the sale, to its member-owners in September—each equating to $579, totaling over $10 million. Another cash infusion could occur soon for Valley’s members.
“In addition, the cooperative association will retire membership capital credits of more than $8 million,” the association said in a news release. “The distribution of $18 million into the local economy will have far-reaching effects.”
Valley Electric is also donating $5 million from the sale to Valley Electric Charitable Foundation to develop a community center.
Sale had been delayed
The sale of Valley’s transmission system was expected to close in March 2017 after more than two-thirds of Valley’s members approved the sale in 2016.
However, it was held up for several months awaiting regulatory approval.
The Federal Energy Regulatory Commission, which had to approve the sale, was left without a quorum in February after the resignation of former chairman Norman Bay.
At that time, there were only two out of five members sitting on the commission, where three are required to take a vote. The commission was waiting for several of President Donald Trump’s nominees to be confirmed by the U.S. Senate.
In early August, Neil Chatterjee and Robert Powelson, Trump’s nominees for FERC, were confirmed. The sale was approved later in August.
A bright future for Nevada
The benefits of the sale to Pahrump and the surrounding areas could be much higher than the initial cash infusion to Valley’s members.
Campbell hopes to work with developers of solar-power generation systems on the transfer of power from Nevada to California.
Campbell said GridLiance is looking to capitalize on the large-scale renewable market in California through the company’s newly-acquired transmission lines.
Nevada not only has a large solar industry but also has other renewable energy options such as geothermal and wind, Campbell said during the event.
“As we look to California and what they’re trying to accomplish with their greenhouse gas reduction, 50 percent renewable standards, there’s great economic development opportunity,” he said.
In an off-stage interview, Campbell said GridLiance has been in talks with renewable-energy developers about how the group can help with moving energy out of the state to California.
“There is some interest building already,” he said.
GridLiance can move energy to California, as its new asset is in the California Independent System Operator Corporation. By joining CAISO, Valley was allowed “to participate in CAISO’s wholesale marketplace and participate in opportunities for renewable energy generation and transmission from VEA’s service territory,” according to a news release from the association.
Crowder said the company is working on a new project, Nevada West Connect, during the event.
“We see tremendous growth opportunity for a Nevada West Connect,” he said. “It will take transmission from the northern part of the Valley system into California and allow another path for renewables.”
Crowder also sees the potential for job growth in Nevada.
Solar is already large in Nevada, ranked fourth in the nation by the Solar Energy Industries Association—a national industry trade organization.
According to a report by the Solar Energy Industries Association, Nevada employed 8,371 individuals in the solar industry in 2016. Nearly 8 percent of the state’s power is supplied by solar.
Contact reporter Jeffrey Meehan at jmeehan@pvtimes.com. On Twitter: @pvtimes