County’s hopes rest on a roller-coaster power market

  The 2001 energy crisis, and the sky-high power prices that came with it, touched off a stampede of new power plant proposals throughout the West.

North Carolina-based Cogentrix Energy arrived in Nevada with a plan to build an 1,100 megawatt gas-fired power plant in southern Lincoln County. The plant would generate enough power for between 550,000 and 1.1 million Southwest homes, depending on how high people cranked their air-conditioning.

Cogentrix’s arrival looked like a plum for rural Lincoln County, which had teamed up with Vidler Water to pump water from under the remote Tule Desert. In short order, the public-private partnership negotiated a deal to sell the plant 7,000 acre-feet of water a year for its cooling system, for $23 million total.

But as it became clear that companies such as Enron had manipulated power markets to create artificial shortages (and drive prices up), it was obvious that the need for new power plants was far less than anticipated. Cogentrix backed out, and Vidler decided to run with the project itself. Late last year, it bought Toquop Energy — little more than a collection of documents and studies — from Cogentrix for $50,000; now, it’s working to win the necessary permits for the plant.

“We had enough investment in the project that it was worthwhile to pick it up and finish it,” says Vidler’s Don Pattalock. Vidler could finance and construct the plant itself, or it could sell the project to a utility or an independent power producer once it’s approved.

But the company has been the target of criticism from other water users. They claim that, because Vidler makes its money selling water, it has a perverse incentive to build a wet-cooled power plant when it should be thinking about air-cooled ones, which use about 90 percent less water. “Vidler has stockholders to pay,” says Mike Winters, the Virgin Valley Water District’s general manager. “And they’re going to make a ton more money off the 7,000 acre-feet (needed for a wet-cooled plant) than they would off 700, or 1,000 (acre-feet).”

It’s a charge that Vidler president Dorothy Timian-Palmer denies, saying that any water that doesn’t go to the power plant could be used to meet the demands of future growth instead.

But the county’s best prospect for that future development is itself in question: Sen. Harry Reid’s Lincoln County Land Act, passed in 2000, requires the federal Bureau of Land Management to sell off 13,000 acres for development in the southeast corner of the county, just over the county line from fast-growing Mesquite. The sale is stalled until the U.S. Department of the Interior’s Board of Land Appeals can hear environmentalists’ protests — and that will happen next year, at the earliest.

Lincoln County Commission chairman Spencer Hafen sounds resigned about the prospects for a real power plant, and the money that would come with it. “The demand isn’t near what it was a few years ago,” he says. “If they could have got it done right then, there’d be a plant making power.”