Deadline looms for utilities

Renewable-energy industry officials and state Sen. Dina Titus, a Democratic candidate for governor, have lodged complaints.

"They have been clearly dragging their feet on (renewable projects)," Titus said.

She complains that the state Legislature adopted a renewable energy portfolio law in 1997 that required the two electric companies to use renewable energy - including solar and wind energy - for gradually increasing portions of their power load. The requirement peaks at 20 percent by 2015.

"Not one commercial-scale renewable energy plant has come on line as a result of that renewable energy portfolio standard," she said in a statement.

Some analysts now say that the Nevada utilities have waited too long for renewable power plant developers to qualify for federal tax credits. Tim Carlson, president of Powered by Renewables, a Las Vegas company, is one of them.

"We are on the critical cusp," he said. "We could be in a position where we could be losing incentives."

The Energy Policy Act of 2005 extended tax credits for solar and wind power projects until 2007. But it has been 11 months since the Nevada utilities issued a request for proposals and no contracts have been awarded. The companies said they hope to enter contracts with renewable power plant developers that can be presented for state regulatory approval by May or June.

Wind farms can qualify for a 1.9 cent tax credit for each kilowatt hour of electricity generated. Businesses and homeowners can claim a 30 percent tax credit for solar power facilities in operation by the end of 2007.

Representatives of Sierra Pacific Resources, the holding company for the two electric utilities, noted that Ormat Nevada completed the 20-megawatt Burdette geothermal plant south of Reno last year. But Titus said that was a power plant addition rather than a new project.

Nevada Power did not satisfy the state law for minimum quantities of renewable power in 2004. Neither Nevada Power nor Sierra Pacific Power met the requirement for solar power, but they blame a delay in constructing a solar thermal plant.

Solargenix started construction on the Boulder City plant in February and it is expected to start producing power by 2007, satisfying the law's requirement that 5 percent of renewable energy come from solar power.

Nevada Power has yet to comply with nonsolar renewable energy plants, but the utility says it will be able to meet the requirement for 2005 if the Public Utilities Commission approves the sale of renewable credits from Sierra Pacific Power, which has existing geothermal power plant contracts.

The electric utilities also got a boost in efforts to satisfy the renewable requirements when the Legislature changed the law so the utilities could use energy efficiency measures to count for one- quarter of renewable requirements. The Nevada utilities have aggressively adopted energy conservation measures.

Donald "Pat" Shalmy, president of Nevada Power Co., said the company considered renewable energy important enough to name Tom Fair as executive of renewable energy in February. Fair brings expertise in renewable energy while at FPL Group, parent company of Florida Power & Light.

Fair said he has five employees in his division and may double the staff, but he did not know how many worked in renewable energy last year. Fair believes the utility can beat a 2007 deadline.

"There is enough time to do a project between now and the end of 2007," he said.

Public Utilities Commissioner Carl Linvill has said that the failure of Nevada Power and Sierra Pacific Power to comply with the state law is costing consumers. He said in September that the Nevada companies could save customers $150 million over 10 years because of federal tax credits.

Nevada Power officials are confident Congress will extend renewable energy tax credits beyond 2007, given the country's interest in renewable power, Shalmy said.

Senate Minority Leader Harry Reid, however, said the industry can't count on such an extension.

"I tried to extend tax credits for wind, solar, and renewable energy during the debate over the budget bill, but unfortunately the Republican leadership killed the measure," Reid said in a statement. "Extending these tax credits is crucial for creating clean, safe and affordable energy. I hope we'll be able to pass an extension this year, but it will be a tough fight."

In addition to the sunset of tax credits, the renewable power industry is being affected by rising interest rates that make it more costly for renewable plant developers to borrow money to build wind farms and solar power plants.

In an annual report on renewable energy work, Nevada Power and Sierra say speeding review of renewable proposals is one of their goals.

Fair said the utilities intend to exceed the renewable energy requirement by 15 percent by 2007.