Blog Post

DOE’s First Loan Guarantee for Transmission Goes to Nevada

Nevada will be the first state in the country to build an electric transmission line, thanks to a federal loan guarantee program. The U.S. Department of Energy said Tuesday it has finalized a $343 million loan guarantee for building One Nevada Transmission, which will provide highway-to-ferry electricity, including renewable power, between the northern and southern parts of the state.

The project, being developed by Great Basin Transmission and NV Energy, is a 500-kiloVolt AC line that will be able to transport 600 MW of electricity. The developers have lined up all the necessary permits, so the financing is the last piece before they start construction. Project completion should happen in late 2012 or early 2013, said Mike Segal, chairman of LS Power, which owns Great Basin Transmission, during a press conference call.

The project will cost about $500 million, some of which will be cash and debt provided by NV Energy (s nve), said NV Energy CEO, Michael Yackira, during the press conference. The 235-mile line will run from Ely to just north of Las Vegas.

The project will connect NV Energy’s northern and southern service areas. The link is also critical for bringing geothermal power from the north and solar power from the south. Nevada already has geothermal power plants in operation, and the state is home to several proposed solar power projects. LS Power is developing solar power projects and has signed

Yackira noted that solar power is intermittent while geothermal energy can be produced around the clock, so having a transmission network that can move both types of electricity will allow his company to manage supply and demand more efficiently. The completion of One Nevada also could spur more renewable energy development in the state and therefore create more jobs, said Senate Majority Leader Harry Reid of Nevada during the press conference.

“We talk a lot about it, but here is some action. We need to continue to take advantage of western states’ natural resources. And frankly across the country,” Reid said.

Pricing for geothermal energy is cheaper, at around 8-10 cents per kilowatt-hour, while solar is about 13 cents per kilowatt-hour, said David Sims, director of project development at NV Energy, at a solar conference in Las Vegas last December.

Although new transmission or power plant projects tend to mean an increase to utility bills for consumers, Yackira said he expects his customers’ bills to become lower because of the improvements in the grid’s reliability and efficiency.

NV Energy and LS Power have greater plans for the project beyond serving Nevada customers. The project is phase one of a larger transmission project called the Southwest Intertie Project (SWIP) which would be able to transport about 2,000 MW of electricity from Wyoming, Idaho and Nevada to California. The developers expect to ship wind and solar power via the SWIP to California, which is hungry for renewable energy in order to meet the state mandate of getting 33 percent of electricity from renewable sources by 2020.

Power producers and retailers see new transmission lines as necessary to accommodate the rising amount of renewable energy being built around the country. A lack of transmission lines and the cost of connecting power projects to the grid are seen as two big challenges.

For more research on smart meters, check out GigaOM Pro (subscription required):

Photo courtesy of Theodore Scott via Flickr.