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Push to close last Nevada coal plant centers on money

Scott Sonner, Associated Press

FILE - In this July 29, 2014, file photo, clean air advocates cheer as Mary Anne Hitt, director of the Sierra Club's Beyond Coal Campaign, speaks at a rally outside an Environmental Protection Agency hearing in Atlanta. Sierra Club lawyers who've preached against the environmental evils of coal-burning power plants for decades are trying to force the closure of the last significant one in renewable energy-rich Nevada with arguments based on a different sort of green: money. (AP Photo/David Goldman, File)

RENO, Nev. (AP) -- Sierra Club lawyers who've preached against the environmental evils of coal-burning power plants for decades are trying to force the closure of the last significant one in renewable energy-rich Nevada with arguments based on a different sort of green: money.

"It used to be that we had to come in and say closing these plants might cost us a bit more, but it's the right thing to do because of the social and environmental impacts — kids with asthma, dirty air and dirty water," said Travis Ritchie, a lawyer for the club's environmental law program in Oakland, California.

"And those things are all still true, but we don't have to say that anymore," he said. "We can say, 'You will lose money if you keep using these coal plants.'"

Critics of the Valmy coal plant scored a key victory last month when state regulators formally ordered Nevada's largest utility to reassess its economic efficiency after experts projected it will cost ratepayers $30 million or more under current plans to keep it open until 2025.

This past week, the power plant 250 miles east of Reno became the last utility-owned one still burning coal in Nevada when the Reid-Gardner Generating Station northeast of Las Vegas ended 50 years of operation.

The Public Utilities Commission said in a December directive it was surprised NV Energy had done only a "cursory review" of the need to re-examine Valmy's costs under new plans to keep it idle all but a handful of days a year.

NV Energy maintains it needs Valmy to meet reliability concerns during peak demand, but intends to comply with the order to produce a new "lifespan analysis plan" for Valmy's two coal-fired units by February 2018.

Leaders of the Sierra Club's Beyond Coal Campaign say it means the utility will have to address arguments they've been making for years — that the plant burning the black stuff is increasingly putting NV Energy ratepayers in the red.

"NV Energy has been squandering customers' money on an outdated power source at a time when Nevada is equipped to become a leader in the new clean energy economy," said Sierra Club lawyer Gloria Smith, adding that today's alternative sources — including natural gas — are much cheaper than coal.

In some ways, the Valmy plant east of Battle Mountain sits at a crossroads of the transition from fossil fuels to renewables — about a mile from the Southern Pacific railroad tracks where coal-powered locomotives first steamed across Nevada in the late 19th century.

Gov. Brian Sandoval boasted of Nevada's No. 8 ranking nationally in renewable energy production during his state-of-the-state address in January, highlighting hundreds of millions of dollars in recent investments in solar and geothermal energy.

NV Energy didn't publicize plans to operate Valmy only during peak demand until a Sierra Club consultant reviewed the utility's resource plan filed last summer and the group successfully intervened in the case.

Specific costs are confidential. But computer models used in state filings show losses accelerating with the shift from a "baseload" plant to a "peaker" plant, said Jeremey Fisher of Synapse Energy Economics Inc. in Cambridge, Massachusetts.

The results "would alarm any resource planner, as it is tremendously difficult to justify maintaining a coal-fired power plant that only operates at peak times," said Fisher, who has reviewed about 200 electric energy systems in the past decade. He predicts the plant's two units will operate at 5 percent of capacity or less the rest of its life.

"In some years, one or both of the units do not operate at all," Fisher said.

NV Energy hasn't responded to the Sierra Club's claims about the growing costs. But spokeswoman Jennifer Schuricht said in an email to The Associated Press on Thursday the pending reassessment will provide a detailed analysis of the company's concerns about the reliability of power grid supplies if Valmy closes early, as well as proposals for "generation, operational and transmission alternatives" that might address those concerns.

Ritchie insists future efficiency will plummet because operating the plant only a half-dozen days a year still requires year-round maintenance. Plus, it takes two or three days to start it up and the same to shut it down.

"The argument for coal has always been that, yeah, it's slow and lumbering and it's dirty, but once you turn it on, it's super cheap because you just leave it on and keep throwing coal in the boiler," Ritchie said.

"Now, other than the super-hot days when everyone in the entire West is running their air conditioners at the same time, it is more expensive than any other energy."