Preparing for the advent of electric industry restructuring inNevada and another pending merger with Portland General, SierraPacific Resources’ two Nevada power utilities have begun theprocess of selling off nearly a billion dollars of fossil-fuelgeneration plants in a two phase auction seeking preliminary,nonbinding bids by next month. Book value collectively is “justunder $1 billion,” a Sierra Pacific spokesperson said.

Sierra Pacific is touting the plants’ interconnection to majorelectricity and natural gas transporters throughout the West andSouthwest, and the expansion capabilities for building significantnew combined-cycle, natural gas-fired plants at the some of thesites. Either through the local distribution utility, SouthwestGas, or directly, two major transmission pipelines provide bothRocky Mountain and Southwest gas supplies.

Nevada Power and Sierra Pacific Power have a total of 2,900 MWup for sale grouped into seven different bundles of properties,many of with multiple generating units. The plants are fueled bynatural gas, coal and oil, and several of them have upgraded gas orelectric transmission line connections, adding to their reportedregional market value beyond the state of Nevada’s grid.

The majority of the plants operate on natural gas or naturalgas/fuel oil, representing a little more than 2,000 of themegawatts up for sale. There are two plants, totaling about 855megawatts, that are exclusively coal-fired. One of the coal-onlyplants, Reid Gardner, is located within a mile of the Kern Riverinterstate gas pipeline.

More than 10,000 acres of land is involved in this series ofpower plants, either directly or indirectly through a series ofleases the utilities now own. For example, the 167-acre,72-megawatt natural gas combined cycle plant north of Las Vegas,NV, Harry Allen Station, has a 6,000-acre surrounding site thatNevada Power has under long-term lease from the Bureau of LandManagement. The site originally was proposed for a 2,000-megawatt,coal-firmed power generation complex. It has since been switched toa series of small gas-fired units.

Sierra Pacific Resources sent information to some 600 potentialbidders who can submit proposals for bidding on one or acombination of the seven bundles of generation units. Thosenonbinding expressions of interest are due in April. From thosesubmittals, Sierra Pacific will select a list of bidders it willask for formal, binding bids, prior to its wrapping up the sale andtransfer of the plants by early next year.

“These plants are valuable assets with great profit potential,”said Jack Byrom, Sierra Pacific Resources’ strategic businessdevelopment director. “They will provide their new owners with botha substantial regional presence in the fastest-growing utilitymarket in the nation and interconnections to many of the majorenergy markets on the West Coast and in the Great Basin region.”

The Nevada Power plants in southern Nevada are enhanced by therecently completed Crystal Transmission Project; the Sierra PacificPower’s northern Nevada plants have the recent addition of theAlturas Transmission Project.

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