Sierra's Faye Anderson says the wind contracts assume the federal Production Tax Credit (PTC) for wind power will be extended to 2005. If Congress fails to extend the tax credit, the contracts include what Anderson calls "mechanisms" or ways out. All are subject to Public Utility Commission (PUC) approval. It will rule on whether the agreements constitute prudent investments.
Sierra owns the only two electric utilities in Nevada -- Sierra Pacific Power and Nevada Power -- that are subject to the state's 2001 RPS law. It requires the state's investor-owned utilities to buy 2% of their retail sales from wind, solar, geothermal or biomass resources every other year and to slowly escalate these purchases until they reach 15% by 2015.
Sierra was to have bought 5% of sales from renewables generation by the end of 2003 and it admits it is late out of the starting gate. But to have been in full compliance with the RPS earlier, it would have had to start talks with renewable energy providers at least three months before the law was passed, says Anderson. Still, the PUC could choose to fine the utility for its tardiness. Anderson says the contracts, along with the yet to be fulfilled solar requirement, will provide about 7% of retail sales and will satisfy the RPS mandate for 2005 and 2006. It must seek contracts to fulfil requirements for 2007 and beyond.
One of the two wind developments is a 50 MW project by Global Renewable Energy, operating as Ely Wind Co LLC for this project, on property owned by BHP Billiton near Ruth. The property is the site of a former copper mine in east Nevada and is the only one of three Global Renewable projects in Nevada with a power purchase agreement. It will use 33 NEG Micon 1.5 MW turbines. Global Renewable is a wholly owned subsidiary of NEG Micon, a Danish wind turbine maker.
Global Renewable's troubled 85 MW Nuclear Test Site project in Nevada could be forever stalled by the US Air Force over concerns that the wind turbines might interfere with radar. The state's Commission on Wildlife and Natural Resources is delaying the developer's third project, the 90 MW Table Mountain wind farm south of Las Vegas, while it studies the project's potential impacts on big horn sheep (Windpower Monthly, October 2002).
The other wind project to win one of Sierra's six Nevada contracts is Cielo Wind Power from Texas. Its 80 MW Desert Queen Limited Partnership project is slated for US Bureau of Land Management property in Bird Spring Range near Boulder City in southern Nevada. The two wind projects were selected from a short list of wind proposals that totalled 330 MW, Anderson says.