In January 2006, the Nevada utility company Sierra Pacific Resources announced plans to build a 1500 MW coal-fired power plant in Ely, Nevada. A report released yesterday by Innovest Strategic Value Advisers finds that Sierra Pacific, like Sunflower Electric in Kansas, is exposing its shareholders and ratepayers to “significant financial and environmental risk” by banking its future on coal. The $5 billion project, already the subject of cost overruns and delays, would nearly triple Sierra Pacific’s coal use and double its greenhouse gas output.
Even as other utilities join coalitions calling for mandatory reductions in greenhouse gases, the report explains:
Sierra Pacific continues to focus its resource planning on new coal-fired generation has yet to develop a voluntary greenhouse gas reduction policy, and does not account for the potential price of carbon in its resource planning. The company’s failure to incorporate climate related risks and opportunities into its strategy will create significant financial risks for shareholders and ratepayers.
Sierra’s coal plans, the report says, fit into “a historical trend in which Sierra Pacific has relied on shifting risk between investors and ratepayers.”
Nevada, with its rapidly-growing population and a surfeit of both fossil and renewable energy resources, is choosing now between competing visions of America’s energy future. Last year, Senate Majority Leader Harry Reid (D-NV) called for an immediate moratorium on coal-fired power plants in Nevada and introduced the Clean Renewable Energy and Economic Development Incentives Act (S. 1531), which would grant an additional $10 billion in Federal financing of high-voltage transmission lines, but only to those that carry at least 75 percent renewable electricity. This legislation would effectively block new coal plant projects like the Ely plant while offering major support to renewable electricity development.