Why wasn't this project planned for construction near Nevada Power's or Sierra Pacific's hometowns of Las Vegas or Reno?

Sierra Pacific Resources already has developed electrical generation close to its load centers in Nevada. The location for the Ely Energy Center was chosen because:

• It provides the ability to serve electricity customers in both parts of the state from a centrally-located facility, providing benefits from economies of scale, and sharing of existing resources that can reduce the overall cost of power to customers.
• It has access to major rail service for delivery of low-sulfur Western coal.
• It has an existing short-line rail corridor that will provide rail access to the site.
• Existing highway and community infrastructure will support both construction and permanent operations and maintenance of the center.
• An existing transmission corridor called the Southwest Intertie Project, or SWIP, which is a Bureau of Land Management-approved corridor, is available for the construction of electric transmission lines.
• Water is available from several hydrogeologic basins in the region, from both shallow and deep aquifers.
• There is access to renewable resources that will become economically viable to markets across Nevada.
• This is a community that has actively encouraged the development of such facilities for many years.

What is the history of the Ely area and White Pine County?

Ely is the county seat of White Pine County, and is the primary population center in White Pine County. Along with the nearby communities of Ruth and McGill, the area has a population of about 7,000.

The area is strikingly beautiful, with long alluvial plains framed by mountains reaching 12,000 feet and higher. The area is home to Nevada's only national park, Great Basin National Park. The area is typical of a high desert ecology, with abundant wildlife, including elk, antelope and mule deer. Most of the land is managed by the Bureau of Land Management's Ely Regional Office.

Originally focused on agriculture, ranching and gold mining, the population exploded in the early 1900s with the discovery and development of copper in the nearby area. To serve the mine and associated smelters, the Nevada Consolidated Copper Co. developed the 150-mile Nevada Northern Railroad to connect to the Southern Pacific and Western Pacific main lines to the north. Completed in 1906, the railroad became a vital artery serving both the mines and the Ely community.

Toward the end of the 1970s, Kennecott Copper, the owner of the mines, decided to shut down its facilities, including the Ruth mines and the smelter in McGill. Today, the smelter is no longer in operation, but the mine is active under new ownership.

Rail service to the main line was discontinued for many years, but the rail and associated right-of-way still exists, and was recently purchased by the City of Ely and the White Pine Historic Railroad Foundation. The Foundation still operates and maintains a portion of the line near Ely. The foundation operates two historic steam locomotives and trains that provide recreational service for tourism.

The area is proud of its natural beauty and historic heritage, and is active in its search to expand economic opportunities for its citizens.

How long have you been working on this project?

The original plans for this facility were conceived in the late 1970s, after closure of the mine and smelter. Given the presence of rail, water and transportation networks, an active effort was initiated by White Pine County and the city to bring a power plant to the area. The City of Los Angeles, Nevada Power and Sierra Pacific Power jointly participated in a effort to develop the project throughout the 1980s, but the project did not move forward.

Beginning in 2003, the companies saw that a large coal-fired facility was needed to meet the expanding population growth in Nevada and reduce the companies' exposure to volatile natural gas prices and unpredictable prices of the merchant power market. The companies commissioned a study to identify suitable locations, and the White Pine/Ely area surfaced as the primary candidate for such a facility. These studies were shared with the Public Utility Commission of Nevada, but were kept confidential. After many years of preparation, the companies were ready to proceed, and announced the project on January 9, 2006.

What type of technology will you use?

The first phase will use “ultra super-critical” pulverized coal-fired technology, which pulverizes coal and burns it in an advanced boiler. High-pressure, high-temperature steam is generated in the boiler, which then generates 750 megawatts of electricity from a condensing steam-turbine generator. The advantage of this technology is the higher efficiency and lower emissions compared to the technologies of 20 years ago, as well as its proven commercial and technical viability and reliability. We plan to build two 750-megawatt, super-critical units in the first phase.

The second phase will use an emerging technology called Integrated Gasification Combined Cycle, which converts coal to a synthetic gas that is burned in an efficient gas-turbine generator. The technology combines a coal "refinery," or gasifier, an air separation plant to provide oxygen for the creation of the syngas, and a combined-cycle gas turbine plant to generate electricity.

The perceived advantages of this technology over super-critical pulverized coal-fired technology are greater efficiency and lower emissions of certain pollutants.

The disadvantages, in addition to significantly higher capital cost, are the complexity of integrating the various components, resulting in reduced availability and reliability, based on the operating experience of such facilities to-date. When the companies are confident that the technology has been developed to the point of commercial viability, we will proceed with the second phase of the project.

What other types of technology will you employ?

In keeping with our commitment to be good stewards of the resources made available to us, we decided early on to minimize water consumption as much as possible without sacrificing efficiency. All large power plants, even gas-fired and Integrated Gasification Combined Cycle need a source of cooling to condense steam passing through the steam turbine. Because of the relatively dry air and cool average temperatures in the Ely area, fan-driven or "dry" cooling can help reduce the traditional use of a water-based cooling system, or "wet" cooling towers.

When temperatures begin to climb on hot days, however, the dry cooling systems begin to impact the efficiency of the plant. We therefore decided to use a combination of dry and wet-cooling in a hybrid system, while reducing water consumption by 50 percent, compared to a traditional wet-cooled facility. The rendering of the proposed facility on this website depicts both types of cooling facilities.

Where is the proposed plant to be located?

We are examining two sites in White Pine County, both in the Steptoe Valley, north of Ely. The southern site, located approximately 15 miles north of Ely, would be located on west of US Highway 93, the main highway from Ely to Elko, Nevada. The first site provides relatively easy access to the City of Ely, highway networks, the SWIP transmission corridor, the Nevada Northern rail right-of-way, and water from sources in Steptoe and neighboring valleys.

The northern site, located in the Steptoe Valley but about 50 miles north of Ely, provides closer access to the main rail networks, but would require a longer transmission line to interconnect to the companies' systems.

How will you decide which site to use, and when would you acquire it?

We have submitted an application to the Bureau of Land Management to acquire up to 3,000 acres of land and/or right-of-way grants, identifying the two sites as alternative locations. We have also requested rights-of-way for ancillary facilities for electric transmission lines and water pipeline rights-of-way. Given the proximity to the City of Ely, its associated services and housing opportunities, and the desire to minimize commuting distances during winter months, we feel that the southern site is the preferred location.

We will be examining the northern site, as well as the ancillary corridors, as part of an overall environmental review process to be overseen by the Bureau of Land Management. As part of this process, we will solicit input from both professional resources as well as the neighboring community to assess the best location for the facility. This process will require preparation of an Environmental Impact Statement, or EIS, addressing all impacts of the plant and ancillary facilities.

What other permits will you need to get?

We will require a number of permits from federal, state and local authorities, including air permits from the Nevada Department of Environmental Protection and local land use and building permits from White Pine County.

What process will you follow to get your air permits?

The first step is to gather meteorological data on the existing air quality within the Steptoe Valley and adjacent air sheds. This is done from a variety of instrumentation, including tower-mounted and ground-mounted SODAR (sonic detection and ranging) that measures wind speed, direction, solar radiation, and chemical composition at elevations that simulate the height of each plant's stack. The companies have installed 50-meter towers and instruments at the north and south ends of Steptoe Valley.

A full year's data is required by Nevada Department of Environmental Protection to ensure an accurate depiction of air shed quality. The 50-meter tower is necessary to ensure that ground radar measurements are accurately calibrated at different elevations, and that there are no gaps in the data. The meteorological towers are being erected subject to Special Use Permits issued by White Pine County, and will be dismantled once sufficient data are collected.

Once the first phase of data has been obtained, the first draft of an air permit application will be prepared and submitted to Nevada Department of Environmental Protection, most likely in November of 2006.

To accompany the application, we will assess the latest technologies available for control of emissions from coal-fired generating plant, and prepare a Best Available Control Technology (BACT) analysis. This analysis will assess the cost of air quality controls and compare it to the effectiveness of the pollutant reduction.

A variety of control technologies have been developed over the last 20 years, and these controls substantially control emissions compared to prior technologies, including the control of oxides of sulfur (SOx), oxides of nitrogen (NOx), carbon monoxide (CO) and small particulate emissions down to 10 microns (PM10). The BACT analysis will assess the viability of these controls and form the basis for the emissions control technologies we select to meet the permit standards.

Will your air permit applications be available for public review?

Yes, the applications will be available for review at the Nevada Department of Environmental Protection.

Once the plant is operating, will you monitor the emissions periodically?

Yes. The air permit will require that stack emissions be monitored continuously. The data is then subject to review and confirmation by state and federal regulatory agencies they're within the permitted limits.

We've heard a lot about mercury from coal. Will you control these emissions as well?

The amount of mercury generated from utility plants burning coal is very small. Substantially more is emitted from other sources, including sources outside the United States and local industries in Nevada such as mining. The plant's emission control system will remove almost all of the small amount of mercury emissions. This mercury will be captured by the emissions-control system and properly disposed of. The small quantity of mercury that's left is emitted from the stack.

Currently available technologies remove 50-90% of mercury, and we anticipate that our mercury emissions will be at least 50% lower than the current EPA allowable rate.

Where will the plants get their water?

The companies have applied to the State Engineer for permission to withdraw groundwater from three different basins in Steptoe Valley, as well as the nearby Butte Valley and Jakes Valley. The State Engineer has determined that between 40,000 to 50,000 acre-feet per year of groundwater is available for withdrawal from these basins, of which the projects will require a maximum of 16,000 acre-feet each year at full build-out.

Some of these water rights were previously permitted or applications submitted by White Pine County to support the Los Angeles power project. The companies are working with the County to use the County's existing rights and applications, subject to a satisfactory agreement being negotiated.

How will you ensure that your ground water usage will not affect current users in these groundwater basins?

The permit applications are based on the State Engineer's estimates of available water from the various basins. The companies will drill test wells in the various basins, then use that data to model the hydrogeologic character of each of the groundwater reservoirs. We will also model water availability at various depths to develop a portfolio of resources at different depths. The State Engineer will use those studies to assess the maximum amount of water the companies may withdraw each year, and will not allow the companies to withdraw an amount that would affect other users.

Will the Ely Energy Center be visible from Ely?

The plant itself will not be visible from Ely. Depending on the final location, on some days a plume from the stack may be visible, which is primarily water vapor.

Will the data being collected for the Environmental Impact Statement (EIS) be made public and how can we take part in the process?

We will provide the collected data to the Bureau of Land Management (BLM) to assist in the preparation of an EIS by a third-party contractor. The public was initially able to take part in the EIS through "scoping" meetings, which were held early in 2007 to seek comments and issues from the public. These comments are now being addressed as the BLM is drafting the Environmental Impact Statement. The public will have more chances to provide input by commenting on both a draft EIS and on the final EIS.  It is expected that the Draft EIS will be available early in 2008.

What electric transmission infrastructure will be required for the Ely Energy Center?

The electric transmission system will consist of 500 kilovolt transmission lines from the plant, which will interconnect with the systems of both companies. Current plans are to construct two 500 kilovolt lines to a new substation to be constructed at Robinson Summit, located roughly 30 miles southwest of Ely, where the plant would interconnect with Sierra Pacific's existing 345 kilovolt Falcon-Gonder line. A single 500 kilovolt line would then proceed south along existing utility corridors for approximately 220 miles, interconnecting with Nevada Power's electric transmission system at the Harry Allen Substation roughly 30 miles north of Las Vegas.

Where will you get the coal for the Ely Energy Center?

The coal will be sourced from the Powder River Basin (PRB) in northeastern Wyoming. PRB coal has the lowest sulfur content of any coal in the United States, approximately 0.5 percent, compared to eastern coals with 1 percent or more sulfur content. High sulfur in eastern coals has been a major concern in the United States as a precursor to "acid rain." The low sulfur content of PRB coal, combined with new scrubbers, will reduce sulfur emissions from the Ely Energy Center to minimal amounts.

The coal will be transported on one or more of the major rail systems originating in the PRB, then brought west to the interconnection with the Nevada Northern Railroad at Shafter, Nevada. From there, coal trains will descend the Steptoe Valley for delivery to the plant.

How many coal trains will you be operating per day?

Plant operations for the first phase will require about one train per day, on average, with each train carrying 120 to 150 cars.

What about the ash and other solids generated by the Ely Energy Center? Where will they be disposed?

Modern PC coal plants generate two types of solid waste, ash from the boiler, and calcium sulfate (gypsum) from the scrubber, where sulfur is removed. Various industries now actively seek these waste materials for their use as raw materials: the concrete industry uses ash as a filler material in a variety of concrete products, and the sheet rock industry can make use of the gypsum-like material from a wet scrubber in its manufacturing process.  

It is our intent to actively market the ash and gypsum produced by the plant to these industries, but the plant site will be able to fully accommodate ash disposal if necessary.  Any disposal will meet Nevada standards to prevent any contamination of groundwater, using a multiple-layer liner, leachate collection systems and monitoring systems.

The future IGCC plants will not generate ash, but a lesser amount of "slag" from the gasification process, which will require onsite disposal as well, if alternative markets are not available.

When will construction start at the site?

We are working with Bureau of Land Management to get permission to break ground in the summer of 2008. Construction of the transmission and water lines would likely begin in 2009. We anticipate completion of the first unit at the end of 2011, roughly 42 months in the field. Crews will construct the second unit in a phased approach as components of the first unit are completed.

How large a work force will you require?

We anticipate a peak workforce of approximately 2,000 during the construction phases.

What will you do to ensure the use of local labor during construction?

Our primary goal is to source the construction workforce from within Nevada. Given the magnitude of the project, the workforce will be one of the largest in Nevada's history. With the high level of construction activity already underway in Las Vegas and Reno, we will likely need to institute training programs to ensure a skilled workforce is available. If necessary, we may also need to seek workers from areas outside Nevada to meet the sheer size of the workforce.

Where will you house this workforce during construction? Is the City of Ely capable of absorbing this workforce?

The Ely area could not currently provide sufficient housing for such a huge workforce. We anticipate constructing a temporary “worker village” to house the workforce during the construction phase. We are evaluating a variety of sites in the Ely area that could provide sufficient space.

We may use multiple sites and housing alternatives, including modular housing or compounds for employee-owned housing, some of which may be suitable for conversion to permanent housing following the completion of construction. We also will look to planning for the needs of families that may relocate with construction workers during the course of the project. These facilities will be planned and constructed with the cooperation and approval of White Pine County.

We also anticipate that such a large workforce will present challenges to the Ely and White Pine community, in the form of increased police, fire, school and social services. We intend to develop a mitigation plan with the City and County to manage these issues to the satisfaction of the public.

How many permanent jobs will be created by the Ely Energy Center?

We expect a permanent workforce of approximately 150 permanent employees following completion of the first phase, increasing to a total of 250 at completion of the second phase.

What will be the economic impact of the Ely Energy Center on White Pine County?

A study will be prepared by a consultant, as well as the State Department of Economic Development to assess the direct and indirect impact of the Ely Energy Center on property taxes, sales taxes, employment and additional economic impacts.  It is estimated that – just in the first 10 years of the project – more than $500 million will flow to the local tax base.

What other steps have been taken to consult with the community?

A local office has been obtained and local representation identified to provide day-to-day contact with city and county residents. The office is located at 705 Aultman St. in downtown Ely, two blocks from the County Courthouse.

What other approvals does the Ely Energy Center need for the companies to proceed?

The primary approval required is the approval of the PUCN. Nevada Power submitted its Triennial Resource Plan on June 30, 2006 to the PUCN, requesting approval of initial development expenses for phase one, and authorization for certain preliminary construction expenditures such as critical boiler components, rail, and construction housing. Approval of these expenditures will allow the first unit in phase one to meet its scheduled completion date of late 2011. Following receipt of final estimates and bids, the companies would return to the Commission in late 2007 for final approval of phase one of the Project.

Did Nevada Power and Sierra Pacific Power investigate other coal generation opportunities before deciding to proceed with the EEC?

Absolutely. Nevada Power has spent a considerable amount of time and resources investigating other coal generation options. In its 2003 IRP, Nevada Power proposed and the Public Utilities Commission approved funds to explore coal options at both existing and greenfield sites. Executing on the 2003 IRP, the company proceeded with an examination of potential greenfield sites for coal development. In late 2003, Nevada Power selected Lockwood Greene Engineers to perform a site screening study for both coal and gas-fired facilities.

The company received Lockwood Greene's report in 2004, which recommended a site north of Ely, in White Pine County, as the preferred site for a new clean coal development. Among the advantages of this site is the opportunity for the Companies to interconnect and exchange resources within the State for the first time, as well as to help drive renewable developments in Eastern Nevada. However, as described below, the companies put their own development efforts on hold to investigate whether other coal projects proposed in the state could present an opportunity for their customers.

What other coal projects did Nevada Power consider?

Several other coal-fired generation projects have been proposed outside Nevada, but these projects don't meet the State's policy of adding generation within Nevada, and don't represent legitimate options at this time. The projects are either too conceptual, fully subscribed, require significant transmission through other systems, or are too far out in time to meet the our needs. Nevertheless, we'll continue to explore options such as transmission projects that can benefit customers in later years.

As for in-State projects, we spent a significant amount of time and resources pursuing joint participation in two potential projects proposed by independent power producers. LS Power Associates L.P. proposed to construct the White Pine Energy Station near Ely and Sithe Global Power LLC proposed the Toquop Energy Project near Mesquite, Nevada.

What Were The Results Of Your Investigation Of LS Power Associates' Proposed Project?

Beginning in 2004, Nevada Power and Sierra Pacific Power began substantive discussions concerning the White Pine Energy Station with LS Power Associates. To fully evaluate a potential joint venture or agreement for the station we formed a team with expertise in generation engineering and operations, environmental permitting, fuel supply, land and rights-of-way, water rights, transmission planning, and resource planning. We also hired a consultant with extensive coal plant experience to assist in the technical evaluation. In face-to-face meetings between December 2004 and March 2005, the our team discussed a joint development project and conducted a variety of analyses related to LS Power Associates' proposed plant.

Nevada Power's transmission planning department also prepared a formal study plan and a series of transmission cost estimates for the proposed project. Based on these studies, in June 2005 we formulated a clear set of terms and conditions under which we were willing to move forward to negotiate a joint venture with respect to the White Pine Energy Station. As 2005 came to a close, we ultimately discontinued discussions with LS Power Associates because agreement on these terms and conditions had failed to materialize.

What did you learn from your experiences with the White Pine Energy and Toquop Energy projects?

We expended a lot of time and resources working with independent power producers to develop and construct a coal-fired power plant in Nevada. In the end, we couldn't justify expenditures similar to those of the Ely Energy Center in order to receive what amounts to a long-term purchased power contract. The Ely Energy Center makes sense because Nevada Power and Sierra Pacific Power have the expertise and experience to develop large-scale power projects and operate coal-fired generation facilities. In addition, our technical and economic decisions are subject to the approval of the Public Utility Commission. If a dispute arises in a purchased power contract, it's usually resolved in court, outside the commission's jurisdiction. As negotiations with the two independent power producers broke down, we determined the best way to capture the benefits of a large-scale clean coal project for our customers, investors and the state was to take the lead ourselves. In December 2005 we determined we couldn't delay progress on a clean-coal plant any longer and decided to go forward with the Ely Energy Center alone and the project was announced in January 2006.