Nevada law mandates that Nevada Power Company (“Nevada Power”) retires and replaces its coal-fired generation through an emissions reduction and capacity replacement plan (“ERCR Plan”). On May 1, 2014, Nevada Power filed its ERCR Plan with the Public Utilities Commission of Nevada (“PUCN”), requesting approval to retire 800 MW of coal-fired generation and replace it with certain legacy gas-fired generation facilities and two solar facilities.
The PUCN deemed portions of Nevada Power’s ERCR Plan inadequate, leaving 54 MW of capacity open in the ERCR Plan. In compliance with the PUCN’s directives, Nevada Power is issuing a request for proposal (“RFP”) to obtain the final 54 MW of capacity. Specifically Nevada Power’s proposed RFP schedule is:
- RFP issued on March 27, 2015
- Bids due on May 29, 2015
- Short list determined between June 1, 2015 – June 12, 2015
- Negotiations between June 15, 2015 – July 31, 2015
- Best and final offers due between August 3, 2015 – August 14, 2015
- Resource option selected between August 21, 2015 and October 14, 2015
- Second Amendment to the ERCR Plan filed with the PUCN on October 15, 2015
Nevada Power is requesting that the following types of resources and transactions respond to the RFP:
- Construction of a 54 MW to 68 MW simple cycle gas-fired generating unit on a site identified by Nevada Power.
- A build-transfer option for a 54 MW to 68 MW simple cycle gas-fired generating unit at a location provided by bidder.
- A build-transfer option for a 140 MW nameplate solar photovoltaic facility at a location provided by the bidder.
- Alternative proposals that allow for Nevada Power to acquire or partner with a bidder to construct and acquire a renewable energy resource that would satisfy the remaining 54 MW of planning capacity.
Nevada Power will evaluate the RFP responses in two phases and select a project that it determines provides (i) the greatest economic benefit to Nevada; (2) the greatest opportunity for the creation of jobs in Nevada and (iii) the best value to Nevada Power’s customers. Ultimately, the PUCN will have to approve the project by applying the same criteria.