BEFORE THE PUBLIC UTILITIES COMMISSION OF NEVADA 

Application of Nevada Power Company d/b/a NV Energy for ) 

approval of the first amendment to the 2013-2032 Integrated ) 

Resource Plan and the Energy Supply Plan Update for 2015 to ) 

include an initial emissions reduction and capacity replacement ) 

plan. ) _________________________________________ ) 

Application of Nevada Power Company d/b/a NV Energy for ) 

approval of the second amendment to the 2013-2032 Integrated ) 

Resource Plan and Action Plan as it relates to a new ) 

500kV/230kV autotransformer at the existing Harry Allen ) 

substation. ) 

----------------------------------------- ) 

Docket No. 14-05003 

Docket No. 14-06022 

At a general session of the Public Utilities 

Commission of Nevada, held at its offices on 

October 27, 2014. 

PRESENT: Chairman Alaina Burtenshaw 

Commissioner Rebecca D. Wagner 

Commissioner David Noble 

Assistant Commission Secretary Breanne Potter 
DOCUMENT REVIEW AND APPROVAL ROUTING 

DRAFTED BY: -K& 

FINAL DRAFT ON /OL2'tL l'f_ AT If : 1>0 ~M 

REVIEWED &APPROVED BY: DATE 

D ADMIN I ASST. ( l_ L L 

[!f COMM I COUNSEL lg ~(/_cW to L2gtiY 

D SECRETARY I ASST. SEC. L L 

D OTHER( ) L L 
Docket Nos. 14-05003 & 14-06022 Page 2 

TABLE OF CONTENTS 

I. INTRODUCTION ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 3 

II. SUMMARY ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 3 

III. PROCEDURAL HISTORY •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 3 

IV. ENERGY SUPPLy ~AN UPDATE ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 7 

A. Legal Framework ........................................................................................................ 7 

B. Energy Supply Plan Update Stipulation ................................................................... S 

v. FIRST AMENDMENT TO THE 2013-2032 IRP .......................................................................... ll 

A. Background ................................................................................................................. 11 

B. Load Forecast and Fuel and Purchased Power Price Forecasts ............................ 11 

C. Supply Plan and ERCR Action Plan ......................................................................... 13 

i. Legal Framework ............................................................................................ 13 

ii. Emissions Reduction ....................................................................................... 14 

iii. Capacity Replacement .................................................................................... 22 

VI. SECOND AMENDMENT TO THE 2013-2032 IRP ...................................................................... 81 

A. Background ................................................................................................................. 81 

B. Harry Allen Autotransformer ................................................................................... 82 
Docket Nos. 14-05003 & 14-06022 Page 3 

ORDER 

The Public Utilities Commission of Nevada ("Commission") makes the following 

findings of fact and conclusions of law: 

I. INTRODUCTION 

Nevada Power Company d/b/a NV Energy ("Nevada Power" or "Company") filed an 

Application with the Commission, designated as Docket No. 14-05003, for approval of the first 

amendment to the Action Plan of the 2013-2032 Integrated Resource Plan ("IRP") and the 

Energy Supply Plan ("ESP") Update for 2015 to include an initial emissions reduction and 

capacity replacement plan ("ERCR Plan1

") ("First Amendment Application"). 

Subsequently, Nevada Power filed an Application, designated as Docket No. 14-06022, 

for approval of the second amendment to the 2013-2032 IRP and Action Plan as it relates to a 

new 500-kilovolt ("kV")/230kV autotransformer ("Harry Allen Transformer") at the existing 

Harry Allen substation ("Second Amendment Application"). 

II. SUMMARY 

The Commission accepts the Stipulation, attached hereto as Attachment 1, and grants the 

2015 ESP Update portion of the First Amendment Application as modified by the Stipulation. 

The Commission deems certain portions of the ERCR Plan inadequate and recommends 

to Nevada Power modifications to the Plan as presented in this Order. The Commission grants 

the Second Amendment Application as provided in this Order. 

III. PROCEDURAL HISTORY 

• On May 1, 2014, Nevada Power filed an Application, designated as Docket No. 14-05003, for 

approval of the first amendment to the Action Plan of the 2013-2032 IRP and the ESP Update for 

2015 to include an initial ERCR Plan. The Application was filed pursuant to Chapters 703 and 

704 of the Nevada Revised Statutes ("NRS") and the Nevada Administrative Code ("NAC"), 

including, but not limited to, NRS 704.7311 et seq., NRS 704.736 et seq., NAC 704.9005 et seq., 

and Regulation LCB File No. R131-13. Pursuant to NRS 703.196 and NAC 703.5274, Nevada 

Power requests that certain information it has filed under seal be deemed confidential and not be 

publically disclosed for a period of five (5) years. 

• The Regulatory Operations Staff of the Commission ("Staff') participates as a matter of right 

pursuant to NRS 703.301. 

Ill 

1 The ERCR Plan is also referred to as the Plan, the Preferred Plan and Case C. 
Docket Nos. 14-05003 & 14-06022 Page4 

• On May 8, 2014, the Commission issued a Notice of Application and Notice of Prehearing 

Conference in Docket No. 14-05003. 

• On May 8, 2014, the Attorney General's Bureau of Consumer Protection ("BCP") filed a 

Notice of Intent to Intervene pursuant to NRS 228.360 in Docket No. 14-05003. 

• On May 15, 2014, the Presiding Officer issued a Procedural Order in Docket No. 14-05003. 

• On May 16, 2014, Nevada Power, in response to the Procedural Order, provided the 

Commission with a USB electronic drive containing one electronic copy of the unredacted 

confidential information previously filed in Docket No. 14-05003. 

• On May 28, 2014, Interwest Energy Alliance ("lnterwest") filed a Petition for Leave to 

Intervene ("PLTI") in Docket No. 14-05003. 

• On May 29, 2014, Federal Executive Agencies ("FEA") filed a Notice of Intent to Intervene in 

Docket No. 14-05003. 

• On May 30, 2014, Nevada Power filed an Addendum to the Application containing redacted 

and revised confidential versions of several confidential exhibits previously filed in Docket No. 

14-05003. 

• On May 30, 2014, Abengoa Solar, LLC ("Abengoa") filed a PLTI in Docket No. 14-05003. 

• On June 2, 2014, Bombard Renewable Energy, a division of Bombard Electric LLC 

("Bombard"), Sierra Club ("Sierra"), Enel Green Power North America, Inc. ("EGPNA"), 

Nevadans for Clean Affordable Reliable Energy ("NCARE"), Griffith Energy LLC ("Griffith"), 

and Switch, Ltd. ("Switch") filed PLTis; Boyd Gaming Corporation, Las Vegas Sands Corp., 

MGM Resorts International, Station Casinos, Caesars Entertainment Corporation, and Wynn Las 

Vegas, LLC (collectively, the "Southern Nevada Hotel Group" or "SNHG") filed a Joint PLTI in 

Docket No. 14-05003. 

• On June 10, 2014, Interwest filed a Request to Be Excused from Prehearing Conference; 

Ormat Technologies, Inc. and Ormat Nevada Inc. ("Ormat") filed a Late-Filed PLTI in Docket 

No. 14-05003. 

• On June 11, 2014, the Presiding Officer held a prehearing conference in Docket No. 14-05003, 

in which Nevada Power, FEA, Abengoa, Bombard, BCP, Sierra, EGPNA, NCARE, Griffith, 

Switch, SNHG, Staff, and Ormat participated; Interwest filed a Notice of Non-Resident Counsel 

Pursuant to NAC 703.510. 

• On June 16, 2014, Nevada Power filed its Second Amendment Application with the 

Commission requesting approval of the second amendment to its 2013-2032 IRP including 

approval of the construction of the Harry Allen Transformer at the existing Harry Allen 

Substation. The Application was filed pursuant to Chapters 703 and 704 of the NRS and the 

NAC, including, but not limited to, NRS 704.7311 et seq., NRS 704.736 et seq., and NAC 
Docket Nos. 14-05003 & 14-06022 

704.9005 et seq. In the Second Amendment Application, Nevada Power also seeks to 

consolidate Docket No. 14-06022 with Docket No. 14-05003. 

Page 5 

• On June 17, 2014, the Commission issued a number of orders granting all the PLTis filed in 

Docket No. 14-05003. 

• On June 18, 2014, the Commission issued a Notice of Application and Notice of Prehearing 

Conference in Docket No. 14-06022 and Procedural Order No.2 in Docket No. 14-05003. 

• On June 27, 2014, Nevada Power filed First Amendment to the Application to Approve 

Amendment to Resource Plan and Energy Supply Plan Update to Recognize Emissions 

Reduction and Capacity Replacement Plan- Revised Prayer for Relief in Docket No. 14-05003. 

• On June 30, 2014, the Attorney General's Bureau of Consumer Protection ("BCP") filed a 

Notice of Intent to Intervene pursuant to Chapter 228 of the NRS in Docket No. 14-06022. 

• On July 1, 2014, BCP, Sierra, Staff, Nevada Power, and Interwest filed with the Commission 

Data Request Status Reports in accordance with the Procedural Order No.2 in Docket No. 14-

05003. 

• On July 2, 2014, Griffith, SNHG, Abengoa, and Ormat filed with the Commission Data 

Request Status Reports in accordance with the Procedural Order No.2 in Docket No. 14-05003. 

• On July 3, 2014, NCARE filed with the Commission a Data Request Status Report in 

accordance with the Procedural Order No.2 in Docket No. 14-05003. Nevada Power filed 

Second Addendum to the Application in Docket No. 14-05003 containing previously omitted 

exhibits to the ERCR filing. 

• On July 8, 2014, Staff filed two identical letters with the Commission in Docket Nos. 14-05003 

and 14-06022 advising that it has no objection to Nevada Power's request for consolidation of 

Docket Nos. 14-05003 and 14-06022. Griffith filed a letter in Docket No. 14-05003 informing 

the Commission that it does not intend to file comments in response to Nevada Power's request 

for consolidation. Bombard filed a letter in Docket No. 14-05003 containing a data request 

status report in accordance with the Procedural Order No.2 in Docket No. 14-05003. Ormat 

filed a PLTI in Docket No. 14-06022. 

• On July 16, 2014, the Presiding Officer held a prehearing conference in Docket No. 14-06022, 

in which Staff, BCP, Nevada Power, and Ormat participated. 

• On July 21, 2014, the Presiding Officer issued Procedural Order No.3 consolidating Docket 

Nos. 14-05003 and 14-06022 and adopting the procedural schedule previously established for 

Docket No. 14-05003. 

• On July 28, 2014, FEA filed a Substitution of Counsel notice with the Commission. 

• On July 29, 2014, the Commission issued a Notice of Hearing. 
Docket Nos. 14-05003 & 14-06022 Page 6 

• On July 31, 2014, BCP filed a Data Request Status Report. 

• On August 1, 2014, SNHG, Staff, Nevada Power, Ormat, Griffith, FEA, Sierra, and Abengoa 

filed Data Requests Status Reports. 

• On August 4, 2014, Bombard, Interwest, and NCARE filed Data Requests Status Reports. 

• On August 5, 2014, Switch filed a Data Request Status Report. 

• On August 8, 2014, Nevada Power filed Third Addendum to Docket No. 14-05003 Application 

withdrawing its earlier request for confidential treatment of page 215 of volume 4 of the 

Application and providing an unredacted version of the page. 

• On August 22, 2014, Griffith filed Prepared Direct Testimony of Tina C. Lee. 

• On August 25,2014, BCP filed Prepared Direct Testimonies of Dale Stransky, Patrick Morton, 

and Jerry Mendl; Sierra filed Comments; NCARE filed Prepared Direct Testimony of Nancy 

Kelly; SNHG filed Prepared Direct Testimony of Mark Garrett; Ormat filed Prepared Direct 

Testimony of William Monsen; and Staff filed Prepared Direct Testimonies of Fred Buck, 

Percival Lucban, Gary Cameron, Adam Danise, Paul Maguire, Yasuji Otsuka, Swetha Venkat, 

Anita Castledine, and Karen Olesky. 

• On September 2, 2014, Nevada Power, Sierra, NCARE, Switch, BCP, SNHG, Ormat, Griffith, 

and Staff filed Data Request Status Reports. 

• On September 3, 2014, Interwest filed a Data Request Status Report. 

• On September 8, 2014, Nevada Power filed Prepared Rebuttal Testimonies of David Harrison, 

Brian Whalen, James Doubek, Robert Kocour, Anita Hart, Kevin Geraghty, Stacey Kusters, and 

Shawn Elicegui. 

• On September 12, 2014, Staff filed Revised Direct Testimonies of Paul Maguire and Adam 

Danise; BCP filed Erratas to Prepared Direct Testimonies of Dale Stransky and Patrick Morton. 

Nevada Power filed a Stipulation resolving all ESP issues in Docket No. 14-05003.2 

• On September 15, 2014, Ormat filed an Errata to Prepared Direct Testimony of William 

Monsen, and Nevada Power filed an additional signatory page to the Stipulation. 

Ill 

2 Nevada Power, BCP, and Staff are the only parties who have filed testimony regarding the ESP Update. Staff, 

BCP, Nevada Power, NCARE, Griffith, SNHG, Ormat, Switch, and Abengoa signed the Stipulation. FEA, 

Interwest, and Bombard represented at the September 15, 204, hearing, on the record, that they did not oppose the 

Stipulation. (Transcript at 19.) Nevada Power represented on the record, at stated EGPNA's request, that EGPNA 

did not oppose the Stipulation either. (!d. at 17.) Sierra did not participate in the hearing. (!d. at 19.) 
Docket Nos. 14-05003 & 14-06022 Page7 

• On September 15-17,2014, the Commission held a hearing. Abengoa, BCP, Bombard, FEA, 

Griffith, NCARE, Nevada Power, Ormat, SNHG, and Staff made appearances. At the 

conclusion of the hearing, the Presiding Officer granted an oral motion to accept Exhibit Nos. 1-

94 and C1-15 into the record as evidence pursuant to NAC 703.730. 

• On September 23,2014, Nevada Power late-filed Exhibit Nos. 72 and C-10. 

• On September 29, 2014, Nevada Power late-filed Exhibit No. 34. 

• On October 1, 2014, Abengoa, BCP, Griffith, Nevada Power, Ormat, SNHG, and Switch filed 

Data Request Status Reports. 

• On October 10, 2014, Nevada Power late-filed Exhibit Nos. 60 and C-16. 

• On October 17, 2014, Nevada Power late-filed Corrected Exhibit Nos. 60 and C-16. 

IV. ENERGY SUPPLY PLAN UPDATE 

A. Legal Framework 

1. Pursuant to NAC 704.9506, Nevada Power is obligated to file an ESP update with 

the Commission in the first and second years after the action plan of the utility is filed. Nevada 

Power filed an application, designated as Docket No. 12-06053, seeking approval of its 2013-

2032 Triennial IRP and 2013-2015 ESP on June 29, 2012. Nevada Power includes its second 

year ESP update to the 2013-2015 ESP with the First Amendment Application. 

2. Because the ESP is part of an integrated resource plan filing, Nevada Power's 

inclusion of the ESP Update in the First Amendment Application containing the ERCR Plan also 

allows Nevada Power to comply with the NRS 704. 7316( 1) mandate of filing the ERCR Plan as 

a part of an IRP filing. In other words, Nevada Power's ESP Update filing serves a dual purpose 

of providing an update to the 2013-2015 ESP and contributing the ESP portion of the 

amendment to the 2013-2032 IRP. 

3. Pursuant to NRS 704.7316(2)(d), the ERCR Plan must include a strategy for the 

commercially reasonable physical procurement of fixed-price natural gas if the Plan includes the 
Docket Nos. 14-05003 & 14-06022 Page 8 

construction or acquisition of one or more natural gas-fired plants. NAC 704.9453(5) sets out 

requirements for the gas procurement strategy. The ESP Update contains a section devoted to 

natural gas procurement. 

4. NAC 704.9508 requires this ESP Update to be processed within 120 days after the 

filing, with a hearing taking place within 60 days of the filing. However, the gas procurement 

portion of the ESP Update reflects aspects of Nevada Power's proposed ERCR Plan and is 

responsive to NAC 704.9453(5). Accordingly, Nevada Power requests that the Commission 

waive the 120-day requirement and, instead, consider and approve this ESP Update concurrently 

with the ERCR Plan. (Ex. 13 at 5.) 

B. Energy Supply Plan Update Stipulation 

Parties' Position 

5. Parties to the Stipulation request that the Commission accept the Stipulation. 

6. The parties recommend that the Commission find the short-term load forecast 

contained in the ESP Update meets the requirements of NAC 704.9321, 704.9482, and 704.922, 

and is suitable for making planning decisions during the ESP Update period. The parties further 

recommend that the Commission accept and approve the following: the Power Procurement Plan 

and the constituent elements of the plan, including the portfolio optimization plans, but not 

Nevada Power's "Portfolio Optimization Manual"; the Coal Procurement Plan; the Physical Gas 

Procurement Plan; and the Gas Transportation Plan, with the proviso that Nevada Power will not 

issue a request for proposals ("RFP") and award economic bids for up to 40,000 million cubic 

feet per day of natural gas transportation capacity during the ESP Update period. The parties 

recommend the Commission approve and accept Nevada Power's Gas Hedging Strategy as it 

currently exists, until an updated hedging strategy is approved, and find that Nevada Power has 
Docket Nos. 14-05003 & 14-06022 Page9 

satisfied the directive contained in Docket No. 12-06053 and should continue to conduct 

quarterly hedging workshops. The parties recommend the Commission accept and approve 

Nevada Power's Risk Management Strategies. The parties recommend that the Commission 

make the prudence findings pursuant to NAC 704.9494(3). 

7. The parties recommend the Commission accept Nevada Power's plan to continue 

quarterly workshops with Staff and BCP to review the implementation of the constituent 

elements of the ESP Update and the approved hedging strategy. 

8. Finally, the parties agree that the Commission should grant Nevada Power's 

request for confidential treatment of certain portions of the ESP Update pursuant to NAC 

704.7272.3 

Commission Discussion and Findings 

9. The Commission finds that the Stipulation is a consensus resolution of the issues 

pursuant to the Parties' negotiations and is a reasonable recommendation and resolution of the 

issues in this proceeding. The Commission finds that, pursuant to the requirements of NAC 

703.845, this Stipulation settles only issues relating to the instant proceeding and does not seek 

relief that the Commission is not otherwise empowered to grant. Therefore, the Commission 

finds that it is in the public interest to approve the Stipulation. 

10. The Commission finds that Nevada Power's ESP Update should be approved as 

modified by the Stipulation. The Commission finds that the short-term load forecast contained 

in the ESP Update meets the requirements of NAC 704.9321, 704.9482, and 704.922, and is 

suitable for making planning decisions during the ESP Update period. Pursuant to NAC 

704.9494, the Commission accepts and approves the following: the Power Procurement Plan and 

3 The Stipulation references NAC 704.7272 in error. The applicable regulation is NAC 703.5274. 
Docket Nos. 14-05003 & 14-06022 Page 10 

the constituent elements of the plan including the portfolio optimization plans, but not Nevada 

Power's "Portfolio Optimization Manual"; the Coal Procurement Plan; the Physical Gas 

Procurement Plan; and the Gas Transportation Plan, with the proviso that Nevada Power will not 

issue an RFP and award economic bids for up to 40,000 million cubic feet per day of natural gas 

transportation capacity during the ESP Update period. The Commission approves and accepts 

Nevada Power's Gas Hedging Strategy as it currently exists, until an updated hedging strategy is 

approved, and the Risk Management Strategies. The Commission finds that the elements of the 

ESP Update, as modified by the Stipulation, are prudent pursuant to NAC 704.9494(3). 

11. The Commission finds that Nevada Power has complied with the directive 

contained in the Commission's November 12, 2012, Phase I Order in Docket Nos. 12-06052 and 

12-06053, which requires Nevada Power to continue to conduct quarterly gas hedging 

workshops as described in the stipulation approved in Docket No. 11-09003. The Commission 

accepts Nevada Power's plan to continue such workshops with Staff and BCP to review the 

implementation of the elements of the ESP Update and the approved hedging strategy. 

12. The Commission grants Nevada Power's request for confidential treatment of 

certain portions of the ESP Update pursuant to NAC 703.5274. 

13. NAC 704.0097 permits deviation from regulations if: (1) good cause appears for 

the deviation; (2) the person requesting the deviation provides a specific reference to each 

provision from which the deviation is requested; and (3) the Commission finds that the deviation 

is in the public interest and is not contrary to statute. The Commission finds that good cause 

exists to deviate from NAC 704.9508 in this instance to allow the Commission the full180 days 

to issue an order addressing portions of the ERCR Plan reflected in the ESP Update. The 

Commission further finds that the deviation is in the public interest and is not contrary to statute. 
Docket Nos. 14-05003 & 14-06022 

V. FIRST AMENDMENT TO THE 2013-2032 IRP 

A. Background 

Page 11 

14. The ERCR Plan originates from Senate Bill ("SB") 123, signed into law on June 

11, 2013. The law, subsequently codified as NRS 704.7311 et seq., provides for the retirement 

or elimination of not less than 800 megawatts ("MW") of coal-fired electric generating capacity 

and replacement of such capacity with renewable or non-coal conventional generation. NRS 

704.7316(1) prescribes that Nevada Power file the ERCR Plan with the Commission as part of an 

IRP filing. Pursuant to NAC 704.9156, an IRP filing consists of a load forecast, a demand side 

plan, a supply plan, a financial plan, an energy supply plan, and an action plan. 

15. To supplement NRS 704.7311 et seq., the Commission adopted a regulation, LCB 

File No. R131-13 ("ERCR Regulation"), subsequently codified within NAC Chapter 704, 

establishing provisions governing the Plan. NAC 704.9453(1) of the ERCR Regulation 

mandates that the initial Plan be filed by May 1, 2014, and be included with Nevada Power's 

supply plan portion of an amendment to the IRP. NAC 704.94893(1) further obligates Nevada 

Power to file an initial ERCR action plan ("ERCR Action Plan") by May 1, 2014, as an 

amendment to the approved IRP. NAC 704.94893(2) contemplates that the ERCR Action Plan 

will cover only one year, 2015. 

16. On May 1, 2014, Nevada Power filed an application to amend its 2013-2032 IRP 

and to update its ESP. The application contains the initial ERCR Plan and ERCR Action Plan. 

B. Load Forecast and Fuel and Purchased Power Price Forecasts 

Nevada Power 

17. Nevada Power seeks approval of the load forecast provided in the Load Forecast, 

Market Fundamentals, and Fuel and Purchase Power volume, Exhibit 4. Nevada Power also 
Docket Nos. 14-05003 & 14-06022 Page 12 

seeks approval of the loads and resources tables for 2015 presented in the ESP Update volume, 

Exhibit 13, and Economic Analysis and Financial Plan volume, Exhibit 4. (Exhibit 27 at 1.) 

Nevada Power requests a finding that the load forecast is based on substantially accurate data 

that has been adequately demonstrated and defended and has been adequately documented and 

justified. Nevada Power also requests a finding that the load forecast is appropriate for resource 

planning decision-making through the Action Plan period. (Ex. 2 at 20; Ex. 27 at 1-2.). 

18. Nevada Power seeks approval of the fuel and purchased power price forecasts 

presented in the Load Forecast and Market Fundamentals volume, Exhibit 4, and seeks a finding 

that the fuel and purchased power price forecasts are based on substantially accurate data that has 

been adequately demonstrated and defended and has been adequately documented and justified. 

Nevada Power also requests a finding that the fuel and purchased power forecasts are appropriate 

for resource planning decision-making through the Action Plan period. (Ex. 2 at 20; Ex. 27 at 2.) 

Staff 

19. Staff recommends that the Commission approve Nevada Power's load forecast, as 

it is based on substantially accurate data, and find that the load forecast is appropriate for 

resource planning decision-making through the Action Plan period. (Ex. 69 at 2.) 

20. Staff recommends that the Commission approve Nevada Power's loads and 

resources tables for 2015, but only if the Commission accepts Staff's recommendation regarding 

the acquisition of the Las Vegas Cogeneration Unit 2 ("LV Cogen 2") station contained in Staff 

Witness Maguire's testimony, Exhibit 79. (Ex. 75 at 3.) Staff states that Nevada Power included 

LV Cogen 2 as a generation resource for 2015. (!d.) Staff adds that Nevada Power's original 

purchase power agreement for this unit expired in December 2013, and Nevada Power executed 

a summer-only amendment to the contract for 2014. (!d.) Staff argues that if the Commission 
Docket Nos. 14-05003 & 14-06022 Page 13 

does not accept Staff's recommendation to approve the Preferred Plan, which includes the 

acquisition of LV Cogen 2, then the loads and resources tables are no longer correct and Nevada 

Power's open position would increase by an additional224 MW. (ld. at 3-4.) 

21. Staff recommends that the Commission approve Nevada Power's fuel and 

purchased power price forecasts, as they are based on substantially accurate data, and find that 

these forecasts are appropriate for resource planning decision-making through the Action Plan 

period. (Ex. 69 at 2.) 

Commission Discussion and Findings 

22. The Commission approves Nevada Power's load forecast provided in the Load 

Forecast, Market Fundamentals, and Fuel and Purchased Power volume and loads and resources 

tables for 2015 that are presented in the ESP Update volume and the Economic Analysis and 

Financial Plan volume. The Commission finds that the load forecast is based on substantially 

accurate data and is appropriate for resource planning decision-making through the Action Plan 

period. 

23. The Commission approves Nevada Power's fuel and purchased power price 

forecasts, as they are based on substantially accurate data, and finds that these forecasts are 

appropriate for resource planning decision-making through the Action Plan period. 

C. Supply Plan and ERCR Action Plan 

i. Legal Framework 

24. To replace the retired or eliminated coal-fired electric generation, NRS 

704.7316(2)( c) contemplates construction or acquisition of 550 MW of non-technology-specific 

generation to be owned by Nevada Power. The replacement capacity must be constructed or 

acquired in an orderly and structured manner. 
Docket Nos. 14-05003 & 14-06022 Page 14 

25. NRS 704.7316(2)(b) requires the ERCR Plan to provide for the construction and 

acquisition of, or contracting for, 350 MW of renewable electric generating capacity. Under the 

Plan, Nevada Power has to issue three RFPs of 100 MW each for nameplate capacity from 

renewable energy facilities. The remaining 50 MW of renewable nameplate capacity must come 

from Nevada Power either constructing or acquiring a portion of new renewable energy facilities. 

26. NAC 704.94893 directs Nevada Power to specify within the initial ERCR Action 

Plan all of the actions that are to take place before the filing of its 2016-2035 IRP and provide a 

budget for planned expenditures suitable for comparing planned and achieved expenditures. 

ii. Emissions Reduction 

Applicable Authorities 

27. Under NRS 704.7316(2)(a), the ERCR Plan must provide for retirement or 

elimination of at least 300 MW of coal-fired electric generating capacity by December 31, 2014, 

250 MW by December 31,2017, and another250 MW by December 31,2019. NAC 

704.9453(2) mandates that the Plan include a schedule specifying the tiered retirement or 

elimination of coal-fired generation outlined in NRS 704.7316(2)(a). Under NAC 704.9453(2), 

the Plan must also identify each coal-fired generation facility to be retired or eliminated, the 

amount of planning capacity associated with such facilities as well as the unamortized balance of 

investment, decommissioning and remediation costs, and lingering contractual liabilities 

associated with the facilities. 

28. Paragraph (e) of subsection 2 of NRS 704.7316 further prescribes that the ERCR 

Plan provide "a plan for tracking and specifying the accounting treatment for all costs associated 

with the decommissioning" of the coal-fired generating plants. NAC 704.9453(6) elaborates that 
Docket Nos. 14-05003 & 14-06022 Page 15 

such costs, including undepreciated amount of each coal-fired plant to be retired or eliminated, 

must be placed in separate regulatory asset or liability accounts. 

Nevada Power 

29. Nevada Power seeks the Commission's approval to retire, decommission, and 

remediate coal-fired generating units. Nevada Power requests approval to retire Reid Gardner 

Generating Station, units 1- 3, 300 MW of planning capacity, by December 31, 2014, and Reid 

Gardner Generating Station, unit 4, 257 MW of planning capacity, by December 31, 2017. (Ex. 4 

at 149.) Nevada Power also plans to eliminate its interest in the Navajo Generating Station, 

which supplies 255 MW of planning capacity, by December 31, 2019. (ld.) The total planning 

capacity thus retired and eliminated would equal812 MW. (!d.) 

30. Nevada Power estimates the demolition costs for Reid Gardner units 1-4 at $45.4 

million, adjusted for approximately $10 million in asset recovery/salvage credits. (ld. at 151.) 

The amount does not include approximately $1.5 million in transmission costs associated with 

the demolition. (!d.) Nevada Power proposes a decommission and demolition schedule, which 

includes demolition of units 1-3 between March 1, 2015, and December 31,2016, and unit 4 

demolition between January 1, 2018, and December 31, 2019. (!d. at 152.) Nevada Power 

expects to complete base-case corrective remediation actions by the end of 2022 with 

maintenance and performance monitoring continuing for up to 30 years thereafter. 4 (!d. at 154.) 

31. With exit negotiations among participants in the Navajo Project ongoing, Nevada 

Power is unable to provide information regarding decommissioning, demolition, and remediation 

costs for the Navajo Generating Station. (!d. at 155.) 

32. Nevada Power presents the following net book values for Reid Gardner units 1-4: 

4 Nevada Power requested confidential treatment of the remediation costs. 
Docket Nos. 14-05003 & 14-06022 

Unit 

Unit 1 

Unit 2 

Unit 3 

Units 1, 2, and 3 Common 

Unit4 

Units 1-4 Common 

Unit 4 Acquisition Adjustment 

Total 

(/d.; See also Ex. 2 at 254.) 

Retirement Date 

12/31114 

12/31114 

12/31114 

12/31114 

12/31117 

12/31117 

12/31117 

Page 16 

Net Book Value (as of 

retirement date in millions 

of dollars) 

$26.6 

$24.4 

$25.6 

$57.9 

$53.3 

$33.8 

$25.7 

$247.3 

33. Nevada Power presents the following net book values for the Navajo Generating 

Station: 

Unit 

Unit 1 

Unit 2 

Unit 3 

Units 1, 2, and 3 Common 

Navajo Coalhaul Railroad 

Total 

(!d. at 156; See also Ex. 2 at 254.) 

Retirement Date 

12/31/19 

12/31/19 

12/31/19 

12/31/19 

12/31/19 

Net Book Value (as of 

retirement date in millions 

of dollars) 

$3.2 

$5.6 

$8.5 

$9.9 

$1.6 

$28.9 

34. Nevada Power proposes to accumulate the costs of retirement, decommissioning, 

demolition, and remediation for the Reid Gardner and Navajo units in separate regulatory asset 
Docket Nos. 14-05003 & 14-06022 Page 17 

subaccounts. (!d.) Nevada Power proposes that a separate regulatory asset account be 

established for the net book value of each unit and related electric investments on the date of the 

retirement. (!d.) 

35. Nevada Power states that the majority of contractual and regulatory obligations 

for the Reid Gardner Generating Station pertain to remediation costs. (!d. at 157.) Nevada Power 

anticipates liability for the Navajo Station decommissioning costs proportionate to its ownership 

share. (!d.) 

NCARE 

36. NCARE recommends that the Commission approve Nevada Power's ERCR 

proposal for the retirement and elimination of 812 MW of coal-fired generating units. (Ex. 56 at 

4.) 

Staff 

37. Staff recommends that the Commission approve Nevada Power's request to retire, 

decommission, and remediate the coal-fired generating assets per the dates outlined. (Ex. 79 at 2-

3.) However, Staff requests that the Commission specify that it is not approving the specific 

timeline and cost estimates of decommissioning and remediation because it is Nevada Power's 

responsibility to prudently manage the work and to present the costs for review in the appropriate 

general rate case application. (!d. at 3.) 

38. Staff recommends that the Commission order Nevada Power to accumulate the 

test year certified level of operations and maintenance ("O&M") expenses related to 29 Reid 

Gardner units 1-3 employees in a regulatory liability or, alternatively, to use these accumulated 

expenses as an offset against the regulatory asset for O&M costs that will be established pursuant 

to NRS 704.7317. (Ex. 78 at 1.) 
Docket Nos. 14-05003 & 14-06022 Page 18 

39. Staff notes that the payroll costs of Reid Gardner units 1-3 employees are 

embedded in certification period O&M expenses of Nevada Power's general rate case filing, 

Docket No. 14-05004, and thus will be recoverable in rates for the next three years despite the 

Reid Gardner units 1-3 closure on December 31,2014. (/d. at 2.) At the same time, according to 

Staff, Nevada Power plans on using the employees to conduct decommissioning work at Reid 

Gardner or transfer them to other generating facilities. (!d. at 3.) Staff contends that either 

scenario will result in double recovery of payroll costs for the 29 employees. (!d. at 3-4.) Staff 

predicts that payroll costs of the employees to be involved in decommissioning activities or to be 

transferred to newly-acquired generation facilities will be accumulated in a regulatory asset 

pursuant to NRS 704.7317 and recovered in the next general rate case. (!d.) Staff claims that, 

alternatively, payroll costs of the employees to be transferred to existing generation facilities will 

also be double-recovered because payroll costs of those stations, which may have been fully 

staffed in the test year, have already been reflected in test year O&M expenses (/d. at 4.). 

40. Thus, to prevent double recovery of the payroll costs, Staff recommends that a 

rate case adjustment or an accounting order. (!d.) Staff contends that the recommendation is 

consistent with the Commission's mandate of setting just and reasonable rates and NAC 

704.9453(6)(b)(5), which states that the ERCR Plan "must provide for salvage and any other 

appropriate offsets." (!d. at 5.) 

Nevada Power Rebuttal 

41. Nevada Power disagrees with Staff's recommendation not to approve specific 

decommissioning and remediation timelines and cost estimates. (Ex. 93 at 17.) Nevada Power 

agrees with Staff that the Company has not yet completed a detailed remediation plan for the 

Reid Gardner Station because such a plan must be developed in coordination with the Nevada 
Docket Nos. 14-05003 & 14-06022 Page 19 

Division of Environmental Protection. (!d.) Nevada Power also agrees with Staff that the 

Company has not yet completed a detailed decommissioning and remediation plan for the 

Navajo Station because Nevada Power has yet to negotiate an exit agreement with co-owners of 

the Navajo Station. (!d.) However, Nevada Power disagrees with Staff's assertion that the Reid 

Gardner decommissioning plan is not sufficiently developed to merit approval in this case. (/d. at 

17-18.) Nevada Power references its initial filing to demonstrate that it supplied specific 

timeframes to begin decommissioning of Reid Gardner units 1-3 and that a study included as 

Technical Appendix GEN-3 provides the basis for the detailed estimates for decommissioning 

and demolition costs and a detailed decommissioning timeline. (!d. at 18.) Nevada Power further 

notes that it is unaware of any deficiencies in the Reid Gardner decommissioning plan. (!d.) 

Nevada Power recognizes that it is responsible for prudent management of decommissioning and 

remediation work and is mindful that the Commission's acceptance of the plan does not 

predetermine Nevada Power's ability to recover the estimated costs through rates. (!d. at 18-19.) 

42. Nevada Power counters Staff's assertions regarding over-recovery of payroll costs 

by stating that double recovery is not possible in one of the three circumstances described by 

Staff and that the existing regulatory environment already protects against the other two double 

recovery scenarios without requiring the deferral or accumulation of revenue into a regulatory 

liability. (Ex. 93 at 4.) 

43. With respect to the scenario where the employees transfer to another generating 

station to fill positions at those plants, Nevada Power asserts that double recovery cannot occur 

because the payroll costs associated with those positions are not eligible for recovery under an 

alternative ratemaking mechanism such as the one established pursuant to NRS 704.7317. (!d.) 
Docket Nos. 14-05003 & 14-06022 Page 20 

44. With respect to the scenarios in which the payroll costs could be recovered 

through annual revenue requirement during the rate-effective period and could also be included 

in costs accumulated in an ERCR Plan regulatory asset, Nevada Power cites to NAC 

704.9453(6)(b)(5), which already prevents such double recovery. (!d. at 5.) Nevada Power 

references Staff's observation that NAC 704.9453(6)(b)(5) requires that cost recovery through 

the ERCR Plan regulatory asset established for collecting the costs of decommissioning Reid 

Gardner units 1-3 provide for "salvage and any other appropriate offsets." (!d.) Nevada Power 

represents that it will track costs as required by the regulations and will present sufficient 

information in the next rate case for the Commission to determine whether an offset is necessary 

and the amount of the offset. (!d. at 6; Tr. at 630-31.) Accordingly, Nevada Power argues that 

the establishment of a regulatory liability account or other means of deferring and accumulating 

the costs of the redeployed employees is unnecessary and predetermines the Commission's 

decision in a future ratemaking proceeding. (Ex. 93 at 6.) 

45. Additionally, Nevada Power states that the acceptance of Staff's recommendation 

to accumulate $3.9 million in annual general rate revenues would upset the careful balance 

struck when Nevada Power agreed in Docket No. 14-05004, its recent general rate case, to no 

change in annual revenue requirement for the next three years. (!d. at 6-8.) Under the settlement 

agreement reached in Docket No. 14-05004, Nevada Power assumed that all of its revenue will 

be available to fund operations. (Transcript at 631.) Thus, Nevada Power opposes the creation of 

a regulatory liability to collect the payroll costs, which will likely result in reduction of O&M 

expenses. (!d. at 631-32; Ex. 93 at 7.) 

Ill 

Ill 
Docket Nos. 14-05003 & 14-06022 Page 21 

Commission Discussion and Findings 

46. The Commission approves the components of Nevada Power's ERCR Plan 

related to the retirement and elimination of 812 MW of coal-fired generating capacity. Nevada 

Power has adequately demonstrated its plan to retire the Reid Gardner units 1-3, consisting of 

300 MW of planning capacity by December 31, 20 14; the Reid Gardner unit 4, consisting of 257 

MW of planning capacity by December 31, 2017; and eliminate its interest in the Navajo facility, 

consisting of 255 MW of planning capacity by December 31, 2019. No party objected to the 

retirement and elimination of 812 MW of coal-fired generation. 

47. The Commission approves the components of Nevada Power's ERCR Plan 

related to the decommissioning and remediation of 812 MW of coal-fired generating capacity. 

Nevada Power has adequately demonstrated its plan for the decommissioning and remediation of 

the generating plants based on the information available at this time. The Commission agrees 

with Staff that while the Commission is approving the decommissioning and remediation plan, it 

acknowledges that specific timelines and estimated costs are likely to change. Nevada Power 

remains obligated to prudently manage the timelines and costs of decommissioning and 

remediation and to minimize costs and maximize salvage value of the retired equipment. The 

costs of decommissioning and remediation will be subject to review for reasonableness in the 

appropriate general rate case application. 

48. The Commission finds that while the potential for double recovery of the payroll 

costs exists, establishment of a regulatory liability is not necessary to prevent double recovery. 

The processes for tracking savings realized from reduced payroll expenses at the 

decommissioned portion of the Reid Gardner facilities are identical regardless of whether a 

regulatory liability is established, as proposed by Staff, or if the ERCR regulatory asset amount 
Docket Nos. 14-05003 & 14-06022 Page 22 

is offset at the time of the next general rate case, as proposed by Nevada Power. The key to 

avoiding the double collection is tracking. Nevada Power's proposal is consistent with NAC 

704.9453(6)(b)(5) and the Commission's prior practice. See e.g., Docket Nos. 03-10001 and 03-

10002, March 26, 2004, Order, paragraphs 640-42. Accordingly, the Commission adopts 

Nevada Power's approach of tracking the payroll savings and offsetting the appropriate 

regulatory asset account at the time of the next general case. 

49. Based on the foregoing, the Commission accepts the emission reduction portion 

of Nevada Power's ERCR Plan and finds that Nevada Power has met the requirements of NRS 

704.7316(2)(a) and NAC 704.9453(2)(a-l). 

iii. Capacity Replacement 

Applicable Authorities 

Non-Technology-Specific Capacity Replacement 

50. NRS 704.7316(c) provides for Nevada Power to construct or acquire and own 550 

MW of non-technology-specific generating capacity, which must be constructed or acquired to 

replace the coal-fired generating capacity to be retired or eliminated, in an orderly and structured 

manner. 

51. NAC 704.9453( 4) requires the ERCR Plan to include a description of the plants 

Nevada Power proposes to construct or acquire with a budget for each such plant, the dates of 

initiation and completion of plant construction(s) or the dates of acquisition(s), as applicable, a 

description of the ancillary utility facilities necessary to operate or interconnect the plant(s), and 

the performance and reliability standards to which the electric generating plant(s) will be subject 

and a statement of how those standards compare to standards that the utility has mandated from 

other electric generating plants with which the utility has executed PPAs. NAC 704.9453(4) also 
Docket Nos. 14-05003 & 14-06022 Page 23 

allows for the ERCR Plan to include a request for approval to construct or acquire ancillary 

utility facilities necessary for the operation or interconnection of the plant(s). 

52. NAC 704.9453(7) requires the ERCR Plan to include (1) a schedule of the 

information described in NAC 704.945 that identifies the amount of planning capacity required 

to replace the coal-fired capacity to be retired or eliminated and the time at which such capacity 

will be added, (2) an analysis of all applicable resource planning regulations, and (3) an analysis 

of the economic effect in Nevada of each alternative plan presented by Nevada Power. 

53. NAC 704.9453(8) requires the ERCR Plan to include a proposed RFP process that 

will be used to provide a comparative analysis of the alternatives available for the 550 MW of 

non-technology-specific replacement capacity. 

54. NAC 704.95245 provides for the creation of regulatory asset and liability 

accounts for each new facility acquired or constructed pursuant to the ERCR Plan. 

Renewable Generation Capacity Replacement 

55. NRS 704.7316(2)(b) requires the ERCR Plan to provide for the construction or 

acquisition of, or contracting for, 350 MW of electric generating capacity from renewable energy 

facilities. Under the Plan, Nevada Power must issue three RFPs for 100 MW of renewable 

nameplate capacity each with the first RFP on or before December 31, 2014, the second RFP on 

or before December 31, 2015, and the third RFP on or before December 31, 2016. Nevada 

Power is tasked with identifying the proposals that provide the greatest economic benefit to 

Nevada, the greatest opportunity for the creation of new jobs in Nevada, and the best value to 

Nevada Power customers. Once identified, Nevada Power is to negotiate in good faith to 

construct, acquire, or contract with the new renewable energy facilities and file with the 
Docket Nos. 14-05003 & 14-06022 Page 24 

Commission an amendment to the ERCR Plan each time the utility wishes to construct, acquire, 

or contract with such facilities. 

56. To fulfill the remaining 50 MW of renewable generation, Nevada Power must 

begin the construction or acquisition of a portion of a new renewable energy facility or facilities 

by December 31, 2017, to be owned and operated by Nevada Power, and complete the 

construction by December 31, 2021. 

57. NAC 704.9453(3)(a) mandates that Nevada Power include a schedule for the 

issuance of the RFPs specifying the date of public notice release for each RFP and identifying 

the approximate date by which Nevada Power anticipates announcing the winners of the RFPs, 

concluding negotiations with the winners, and filing an amendment to the ERCR Plan.5 

58. NAC 704.9453(3()(b) further elaborates that, with respect to the 50 MW 

renewable facility(ies) to be owned by Nevada Power, the ERCR Plan must provide a reasonable 

description of such facility(ies), a budget for the new renewable energy facility(ies), the date of 

the construction commencement or acquisition and the date of the construction completion, a 

description of the ancillary utility facilities, and the performance and reliability standards to 

which the new renewable energy facility(ies) will be subject with a statement of how those 

standards compare to standards Nevada power has mandated from its counterparties to the 

renewable energy PP As. 

59. NAC 704.9453 further provides that the first RFP must be completed prior to 

Nevada Power accepting proposals responsive to second or third RFPs. NAC 704.9453 also 

contains a provision requiring Nevada Power to retain an independent evaluator if it or its 

affiliate submits a proposal in response to any of the three RFPs. 

5 The Commission is conducting an ongoing rulemaking centered on the RFPs in Docket No. 13-06023. 
Docket Nos. 14-05003 & 14-06022 Page 25 

Nevada Power 

Non-Technology-Specific Capacity Replacement 

60. Nevada Power proposes the acquisition of 496 MW of natural gas-fired existing 

generation and construction of 200 MW of nameplate solar photovoltaic ("PV") generation. (Ex. 

3 at 4.) More specifically, Nevada Power plans to acquire 224 MW LV Cogen 2, 50 MW Las 

Vegas Cogeneration Unit 1 ("LV Cogen 1"), and 222 MW Sun-Peak generating unit ("SunPeak") and construct 200 MW Moapa Solar generating station ("Moapa" or "Moapa Project").6 

(/d. at 3-4.) 

LV Cogen 1 and 2 

61. Nevada Power proposes to purchase LV Cogen 1 and 2, which are natural gasfired combined-cycle generating plants. (Ex. 4 at 158.) LV Cogen 1 is a 1x1 combined cycle 

facility, which commenced operation in June 1994. (!d.) LV Cogen 2 is a dual2x1 combined 

cycle facility, which commenced operation in January 2003. (!d. at 159.) Both facilities are 

located in an industrial section of the City of North Las Vegas. (ld. at 158.) After conducting 

due diligence on the facilities, Nevada Power concluded that, in general, the plant has been 

adequately maintained and should perform in a reliable manner. (!d. at 160.) 

62. Nevada Power negotiated a $129.92 million purchase price for both facilities with 

an estimated $900,000 in transaction costs adding up to $130.82 million as the initial capital cost 

of the acquisition. (/d. at 161.) LV Cogen units enter Nevada Power's generation fleet on 

January 1, 2015, for LV Cogen 2, and October 1, 2017, for LV Cogen 1, when the existing 

power purchase agreement ("PPA") with Nevada Power terminates. (/d. at 160.) 

6 Moapa has a planning capacity of approximately 76 MW (Exh. 3 at 4.). 
Docket Nos. 14-05003 & 14-06022 Page 26 

63. Nevada Power states that both units are interconnected to its 138 kV transmission 

system through a substation located on the property. (/d. at 159.) The City of North Las Vegas 

provides approximately 510 acre-feet of water per year consumed by the facilities. (!d.) Natural 

gas is supplied from the Kern River pipeline with subsequent distribution via Southwest Gas 

Corporation's ("SWG") infrastructure. (ld.) 

Sun-Peak 

64. Nevada Power proposes to purchase Sun-Peak, which is a simple cycle peaking 

electric plant. (Ex. 4 at 161.) The facility consists of three 74 MW combustion turbines. (/d.) 

The units are dual-fuel capable, natural gas and diesel oil, but have not been run on diesel oil 

since 1999. (!d.) Sun-Peak commenced operation in June 1991. (!d.) The facility is located 

under a site lease agreement on Nevada Power property adjacent to what was formerly the 

Sunrise Generating Station. (ld.) The facility's Title V air permit limits operation to 3,495 hours 

on all three units combined during any 12-month rolling period while burning natural gas. (/d.) 

The three units have quick-start capability. (!d.) Nevada Power observes that, generally, the 

plant has been adequately maintained and should perform in a reliable manner. (/d. at 163.) 

Nevertheless, Nevada Power identified several issues that may have to be remedied before the 

plant can be integrated. (!d.) Nevada Power estimated the remedial costs at $4.53 million. (!d.) 

65. Nevada Power estimates the initial capital cost of the acquisition at $15.83 

million. (/d.) The sum consists of $11million purchase price, $4.53 million integration costs, and 

$300,000 transaction costs. (!d.) 

66. Nevada Power states that Sun-Peak will become a part of its generation portfolio 

beginning June 1, 2016, when the current PPA between Nevada Power and Sun-Peak's present 

ownership expires. (ld. at 162.) 
Docket Nos. 14-05003 & 14-06022 Page 27 

67. Nevada Power states that Sun-Peak is interconnected to the Nevada Power 138 

kV transmission system via two 138 kV transmission lines. (!d. at 161.) Las Vegas Valley Water 

District supplies water to the facility at an approximate rate of 27 acre-feet per year. (/d. at 162.) 

Sun-Peak receives natural gas off of the Kern River pipeline fed to the facility through the SWG 

distribution system. (!d.) 

Ancillary Facilities Required for LV Cogen and Sun-Peak 

68. In response to NAC 704.9453(4)(e), Nevada Power states that LV Cogen and 

Sun-Peak do not require additional ancillary utility facilities to operate or interconnect. (Ex. 4 at 

165.) 

Moapa 

69. Nevada Power proposes to acquire the development assets and to construct and, 

ultimately, operate the Moapa Solar Project. (Ex. 4 at 205.) Moapa will be a 200 MW nameplate 

capacity solar PV electric generating facility located on reservation lands of the Moapa Band of 

Paiutes, approximately 45 miles northeast of Las Vegas, Nevada. (ld.) The plant will have 76 

MW of planning capacity. (Ex. 3 at 4.) The facility is expected to produce approximately 

420,000 megawatt hours ("MWh") of energy annually over its 30-year expected life. (Ex. 4 at 

206.) Nevada Power plans to interconnect the facility directly to its 230 kV transmission system 

at the Harry Allen substation. (/d. at 214.) 

70. Nevada Power estimates the capital cost of Moapa at $438.1 million, excluding an 

allowance for funds used during construction ("AFUDC") (/d. at 205.) The overall cost for the 

project will be offset by the 30 percent federal Investment Tax Credit ("lTC"), representing 
Docket Nos. 14-05003 & 14-06022 Page 28 

$124.8 million in savings, as long as Moapa is placed in service before December 31,2016.7 (!d. 

at 216.) Nevada Power expects the construction to commence no later than March 15, 2015, and 

for the facility to be in commercial operation by December 31,2016. (!d. at 213.) 

71. As an ancillary facility to Moapa, Nevada Power requests approval of $1.7 

million investment in network upgrades at the Harry Allen substation to interconnect Moapa to 

Nevada Power's transmission system. (!d. at 217.) The investment will cover site metering and 

communication, substation entrance work, permit assistance, environmental work, and protection 

review. (!d.) 

Peiformance and Reliability Standards for LV Cog en, Sun-Peak, and Moapa 

Facilities 

72. Nevada Power states that the generating units Nevada Power proposes to 

purchase will be subject to objective performance standards through Nevada Power's general 

obligation to prudently manage and operate its generating units. (Ex. 36 at 23-24.) In addition, 

similar to the existing generation, reliability for LV Cogen and Sun-Peak will be demonstrated 

by participating in and complying with the required North American Electric Reliability 

Corporation ("NERC"), Federal Energy Regulatory Commission ("FERC"), and Western 

Electricity Coordinating Council ("WECC") programs and provisions. (Ex. 4 at 164.) With 

respect to the Moapa plant, Nevada Power states it has secured a number of protections from 

RES, project developer, and First Solar, solar panels supplier, including liquidated damages 

should RES fail to deliver the contracted-for capacity, a design and defect warranty with RES, 

and a separate warranty agreement with First Solar. (Ex. 45 at 25-26.) 

7 Nevada Power has negotiated with the Moapa developer a provision awarding Nevada Power the amount of lTC 

savings as damages if Moapa is not in service by December 31, 2016. (Exh. 4 at 216.) 
Docket Nos. 14-05003 & 14-06022 Page 29 

73. Nevada Power further notes that the generating units within its fleet are subject to 

performance standards different than generating units owned by independent power producers 

because Nevada Power does not control the operations and maintenance of, and the Commission 

has no continuing oversight authority over, the latter category. (Ex. 36 at 24 and Ex. 4 at 164.) 

NAC 704.945 Schedule and Alternative Plans Evaluation 

74. Nevada Power presents a number of tables and graphs responsive to NAC 

704.945 and NAC 704.9453(7)(a). Nevada Power provides loads and resources tables for each 

alternative plan responsive to NAC 704.945(1),(4). (See Ex. 4 at 156-59 and Ex. 11 at 161-222.) 

Nevada Power provides three graphs, responsive to NAC 704.945(2), for the proposed ERCR 

Plan depicting the excess or required capacity with and without demand side management and 

with and without the additional planned resources. (Ex. 4 at 150-51.) 

75. Nevada Power states that, in addition to the proposed ERCR Plan, it analyzed 

three alternative plans to build or acquire capacity outlined in NRS 704.7316(2)(b)(6) and (c) in 

accordance with NAC 704.937(1). (Ex. 4 at 134.) Case A consists of approximately 597 MW of 

gas-fired base load 2xl combined-cycle generation to be operational by summer 2018. (!d.) 

Case B includes approximately 568 MW of gas-fired lxl simple-cycle peaking capacity to be 

operational by summer 2018. (/d.) Case Cis the proposed ERCR Plan. CaseD consists of the 

acquisition of 274 MW of existing gas-fired generation by January 2015, the construction of 200 

MW of solar PV generation by October 2016, and construction of 500 MW of solar PV 

generation by January 2018 for a total planning capacity of 540 MW. (!d. at 135.) Each case 

contains a 15 MW self-build solar PV project beginning June 2016. (/d.) Cases A, B, and C 

include the construction of a 35 MW solar PV generator in 2021. (/d.) According to Nevada 

Power, the 35 MW generator, combined with the 15 MW PV generator, meets the SB 123 
Docket Nos. 14-05003 & 14-06022 Page 30 

requirement of at least 50 MW of replacement capacity in the form of utility-owned renewable 

generation. (/d.) 

76. Nevada Power has chosen Case Cas the Preferred Plan and Case A as the 

Alternate Plan. (!d. at 276.) Nevada Power states that the primary factors for selecting the 

Preferred Plan were total present worth of revenue requirements ("PWRR") and resource 

diversification. (!d.) Secondary factors included reliability and the flexibility to address 

volatilities around load; fuel, purchased power, and carbon prices were also factors in selecting 

the Preferred and Alternate Plans. (!d.) Cases A and C consistently provided the lowest PWRR 

among various loads; carbon, fuel, and purchased power price environments; and 10-year, 20-

year, and 30-year planning periods. (ld.) Nevada Power further states that the difference in 

PWRR between scenarios where Case Cis more expensive than Case A is insignificant across all 

planning periods. (!d.) Nevada Power considers Case C preferable to Case A because the overall 

capital cost of replacement capacity in Case C, at $584.7 million, is lower than the estimated cost 

of Case A at $711 million. (!d. at 276-77.) Additionally, Case A would not receive the 30 

percent lTC for which the Moapa Project from Case C qualifies. (!d. at 149.) Another important 

factor that Nevada Power weighs in favor of Case C is resource diversification, which includes 

factors such as fuel diversity and capacity diversity in producing electricity. (ld.) When 

compared to Case A, Case C provides more fuel diversity and more capacity diversity. (ld.) The 

combined-cycle unit in Case A is gas-fired base load capacity only, whereas the replacement 

capacity in Case C provides 224 MW of gas-fired intermediate capacity, 272 MW of gas-fired 

peaking capacity, and 76 MW of intermittent renewable planning capacity. (!d.) 

77. In addition to the PWRR analysis, Nevada Power applies a number of 

econometrics to the four alternative resource plans to conduct the analysis responsive to NAC 
Docket Nos. 14-05003 & 14-06022 Page 31 

704.9453(7()(b ). Nevada Power calculated the present worth of societal costs ("PWSC"), which 

includes the PWRR and environmental costs, for each Case. In both "No COz price" and "Mid 

C02 price" scenarios, Case A has the lowest PWSC, Case C has the second lowest PWSC, and 

CaseD has the highest PWSC. (/d. at 297.) Nevada Power also compared the present values of 

total relevant expenditures for each Case for the economic impact analysis. Nevada Power states 

that the totals exclude certain categories of expenditures that would not generate positive 

economic impacts in Nevada. (/d. at 298.) Nevada Power calculates that Case C has the lowest 

relevant expenditures because it includes the purchase of existing natural gas and cogeneration 

plants rather than new facilities construction. (/d. at 299.) Nevada Power provides present 

values of NV Energy's electricity revenue requirements for 2015-2034, apportioned by customer 

class. (/d.) The electricity revenues differ from total relevant expenditures for a number of 

reasons, the return on capital investments in the electricity revenue requirements among them. 

(/d.) Nevada Power projects electricity revenue requirements to be smallest for Case A and 

second highest for Case C in total and with respect to residential, commercial, and industrial 

classes individually. (/d. at 300.) Nevada Power observes that, in general, relatively larger 

electricity payments will have negative consequences on the Nevada economy, including a 

negative effect on job creation within the State. (/d.) For each of the four resource plans, Nevada 

Power compiled annual estimates of changes data in future Nevada gross state product, personal 

income, state tax revenue, and employment. (/d.) Nevada Power observes that growth is 

projected to be robust and very similar under each of the four resource plans, with Case D 

showing smaller growth over time, mostly due to the higher electricity payments of customers. 

(/d. at 301, 305.) Nevada Power notes that although each of the alternatives provides a positive 

economic effect to Nevada, Case Coffers a distinct advantage over its least-cost competitor, 
Docket Nos. 14-05003 & 14-06022 Page 32 

Case A, by providing a sizeable positive economic impact starting early in 2015, whereas the 

construction of a combined cycle unit under Case A cannot begin until the permitting is 

complete. (/d. at 310-11.) 

78. In response to NAC 704.9453(7)(c), Nevada Power states that it engaged in 

customer and stakeholder outreach efforts in connection with this filing, including providing a 

regulatory briefing to members of the Southern Nevada Hotel Group and transmitting a simple 

survey to representatives of its 20 largest customers. (/d. at 309-10.) 

Renewable Generation Capacity Replacement 

79. Nevada Power requests the Commission approve the issuance of the three 100 

MW RFPs as part of the proposed ERCR Plan. (Ex. 4 at 62.) Nevada Power attaches the 

following RFP schedule: 

RFP Schedule 

EVENT 2014 2015 2016 

Release Public Notice 10/01114 12114115 11115116 

Initial Short List 01/13115 02/11/16 01124117 

Final Short List 02113115 03/11/16 02/24117 

Negotiations 03/30115 04/22/16 04/07117 

Management Approvals 04/30115 05/23116 05/08117 

IRP (Amendment) Approval Filing 07/01115 06/15116 06/01/17 

PUCN Approval Timeline 12/28/15 10/28/16 10/13117 

(Ex. 4 at 191.) 
Docket Nos. 14-05003 & 14-06022 Page 33 

80. In response to NAC 704.9453(3) prohibition on accepting proposals until the 

previous RFP is complete, Nevada Power points out that proposals responding to the 2015 RFP 

will not be due until February 2016. (!d.) 

81. In response to NRS 704.7316(b)(6), Nevada Power included in its proposed 

ERCR Plan construction of a 15 MW solar PV facility at Nellis Air Force Base, ("Nellis AFB"), 

the Nellis Solar Array II project ("Nellis Project"). (Ex. 4 at 173, 192.). Nevada Power plans to 

construct or acquire 35 MW of additional renewable nameplate capacity at a later time. (Ex. 36 

at 6.) Nellis Project is a 15 MW alternating current facility utilizing 440 kW PV panels mounted 

on a ballasted single axis tracker. (Ex. 4 at 198.) The Project's generation output is estimated at 

42,000 MWh per year for 25 years. (!d.) 

82. Nevada Power estimates the Nellis Project's cost at approximately $54.5 million, 

excluding AFUDC. (!d. at 192.) The amount includes the total EPC contract price of $41.9 

million, new distribution interconnection facilities to interconnect the new PV generating facility 

with the Company's Nellis 69112 kV substation at a cost of $4.6 million, and new distribution 

interconnection facilities to interconnect the PV generating facility and Nellis Air Force 

BaseAFB to the Company's Lincoln 138112 kV substation and a new Clinton 69112 kV 

substation at a cost of $3.2 million. (!d. at 192, 197.) With Nellis AFB committed to paying 

tariffed rates to Nevada Power for 31 years, Nevada Power's costs of constructing the Nellis 

Project are offset by Nellis AFB providing land for the PV facilities, valued at $3.36 million, for 

a minimal rental cost of $10 per month. (!d. at 196, 205.) Nevada Power also notes that the 

Nellis Project should qualify for a 30 percent lTC, equating to approximately $16.3 million the 

in further benefits to ratepayers. (!d. at 202.) 
Docket Nos. 14-05003 & 14-06022 Page 34 

83. Nevada Power anticipates starting the construction on March 30, 2015, and 

contracted for the Nellis Project to be fully-operational by December 1, 2015. (/d. at 196-97.) 

84. Nevada Power states that the Nellis Project will be subject to objective 

performance standards through Nevada Power's general obligation to prudently manage and 

operate its generating units. (Ex. 36 at 23-24.)8 Nevada Power further notes that the generating 

units within its fleet are subject to performance standards different than generating units owned 

by independent power producers because Nevada Power does not control the operations and 

maintenance of, and the Commission has no continuing oversight authority over, the latter 

category. (Ex. 36 at 24 and Ex. 4 at 164.) 

85. Nevada Power seeks Commission approval to spend $1.9 million of a $4.4 million 

development initiative on initial siting activities for one or more proposed new solar PV 

generating facilities northeast of Las Vegas. (Ex. 4 at 217.) Nevada Power considers the siting 

activities essential to meet the renewable portfolio standard ("RPS") and the additional 

renewable energy requirements of SB 123. (/d.) 

Renewable Energy Plan 

86. Nevada Power's Renewable Energy Plan lists renewable generating facilities 

contributing to its RPS, sets forth renewable energy planning, provides schedule and process for 

the three 100 MW renewable RFPs, provides detailed descriptions of the Nellis and Moapa 

Projects, provides information about Clark County solar site development, and supplies an 

update on renewable PPA development activities. 

87. Nevada Power states that it developed renewable expansion plans for each 

scenario evaluated in the ERCR expansion plans that assume full compliance with an escalating 

8 Nevada Power executed with SunPower, Nellis Project developer, a Performance Guaranty Agreement whereby 

SunPower guaranties the energy output of the facility for a ten-year period. (Exh. 4 at 198.) 
Docket Nos. 14-05003 & 14-06022 Page 35 

RPS based on the forecasted load. (Ex. 4 at 181.) Nevada Power first calculated the annual RPS 

credit requirements in compliance with NRS 704.7821 and then determined the expected 

portfolio credit ("PC") supply starting with the current portfolio of approved projects adjusted 

for supply reduction based on a Monte Carlo analysis. (!d. at 181-82.) The RPS compliance 

analysis included a number of assumptions, including the addition of 350 MW of renewable 

generation pursuant to NRS 704. 7316(2)(b ), Nevada Power's repayment of PCs to Sierra 

Pacifica Power Company d/b/a NV Energy, and phasing out of energy efficiency and 

conservation measures as contributors toward portfolio standard compliance. (!d. at 181-82.) 

After developing the renewable baseline forecast described, Nevada Power added generic 

placeholder projects to achieve full RPS compliance throughout the 30-year planning period for 

each case. (!d. at 183.) Nevada Power included 178.5 MW of additional geothermal capacity 

and 450 MW of additional solar PV capacity, modeled as being completed between 2033 and 

2044, as placeholders for the Preferred Plan. (Ex. 12 at 237.) Nevada Power included 280.5 MW 

of additional geothermal capacity and 400 MW of additional solar PV capacity, modeled as 

being completed between 2027 and 2044, as placeholders for the Alternate Plan. (!d. at 232.) 

For the ERCR component of renewable generation, Nevada Power includes 15 MW PV Nellis 

Project, 200 MW PV Moapa Project, 10 MW PV and 25 MW PV to be completed in 2021, and 

250 MW PV and 51 MW geothermal resulting from the three 100 MW RFPs for the Preferred 

Plan. (!d. at 237.) The ERCR renewable inputs for the Alternate Plan modeling are the same, 

minus the Moapa Project. (!d. at 232.) 

88. Nevada Power expects to remain RPS compliant until 2020 without any 

additional renewable resources and without extending existing PP As. (Ex. 4 at 185.) If the 

Preferred Plan is approved, Nevada Power expects to remain RPS compliant until2033. (Ex. 12 
Docket Nos. 14-05003 & 14-06022 Page 36 

at 237.) If the Alternate Plan is approved, Nevada Power expects to remain RPS compliant into 

2027. (Ex. 12 at 232.) 

89. Nevada Power states that it is not presenting any new renewable PPAs for 

approval as part of this filing. (Ex. 4 at 220.) 

Transmission Plan 

90. Nevada Power provides information regarding its 20-year transmission plan in 

this filing pursuant to NAC 704.9385(3). (Ex. 4 at 221.) Nevada Power's transmission plan 

ERCR analysis identifies transmission projects necessary to maintain reliability of the grid 

following the retirement and addition of generating resources pursuant to each of the alternative 

plans. (/d. at 234-36.) Nevada Power identifies eight transmission projects that will ultimately 

become necessary if the Preferred Plan is approved. (/d. at 236.) Nevada Power requests 

approval of only the Harry Allen 230 kV Network Upgrades in this filing. 9 (/d. at 237.) 

Deviation from NAC 704.9453(8) Request 

91. Nevada Power requests the Commission allow the proposed ERCR Plan to 

deviate from NAC 704.9453(8).). Nevada Power states that the Plan has been put together over 

a short period of time according to the rules adopted by the Commission in mid-February 2014. 

(Ex. 2 at 15.) Nevada Power further states that three key elements of the plan are opportunistic 

acquisitions of Sun-Peak, LV Cogen units, and the Moapa facility. (/d.) Nevada Power states 

that time was of the essence in identifying, investigating, and negotiating for these acquisitions. 

(/d. at 15-16.) Nevada Power claims that its economic analysis submitted to the Commission 

confirms that the pricing terms of the Sun-Peak and LV Cogen acquisitions are extremely 

favorable for the purchaser. (/d. at 16.) Similarly, Nevada Power claims that, with the Moapa 

9 Nevada Power's request for approval of the Harry Allen 500/230 kV autotransformer filed in Docket No. 14-06022 

is discussed in Section VI ofthis order. 
Docket Nos. 14-05003 & 14-06022 Page 37 

Project being shovel-ready, Nevada will immediately begin to realize associated economic 

benefits, and Nevada Power's customers will benefit from the 30 percent ITC, which expires 

December 31, 2016. (!d.) Nevada Power argues that these opportunistic acquisitions would not 

benefit from the information resulting from the RFPs described in NAC 704.9453(8). (!d.) 

Moreover, Nevada Power suspects these opportunistic acquisitions would not have been 

available if Nevada Power did not timely pursue negotiations with the owners of these resources. 

(/d.) 

ERCR Action Plan Budget 

92. Nevada Power presents a budget for planned expenditures totaling $451.17 

million for the initial2015 ERCR Action Plan. (Ex. 2 at 28.) The budget provides for $146.65 

million in outlays for Sun-Peak and LV Cogen 1 and 2 purchases; $248.56 million in 

expenditures for the Nellis Project, Moapa Project, and Clark County site development; $2.91 

million of transmission upgrades, including Harry Allen network upgrades and Harry Allen 

initial transformer investment; and $53.5 million for DSM programs. (/d.) 

Griffith 

93. Griffith asks that the Commission not approve, either implicitly or explicitly, any 

Nevada Power assumptions or analyses beyond those specifically delineated in the revised prayer 

for relief. (Ex. 59 at 11.) Specifically, Griffith, which operates a combined cycle gas-powered 

570 MW power plant in Arizona, is concerned that the load and resource table associated with 

Nevada Power's Preferred Plan shows the PPA between Griffith and Nevada Power as a resource 

only through 2017 and eliminates Griffith as a resource beyond expiration of the Griffith PPA in 

2017. (/d. at 10-11.) Griffith notes that, to close the resulting open position, Nevada Power 

proposes to build and own a 597 MW combined cycle power plant to be operational by 2020. 
Docket Nos. 14-05003 & 14-06022 Page 38 

(!d. at 11.) Griffith asserts that no proposal involving the approval of the Griffith PPA expiration 

and its replacement with a new plant to be owned by Nevada Power can take place in this 

proceeding as it would side-step the normal IRP process and grant relief not requested by 

Nevada Power. (ld. at 11-12.) 

NCARE 

94. NCARE recommends that the Commission approve Nevada Power's ERCR Plan, 

with corresponding capacity retirement, elimination, acquisition, construction, RFP issuances, 

and initial siting activities related to one or more proposed new solar generating facilities in 

Clark County. (Ex. 59 at 24-25.) NCARE supports the ERCR Plan because it aims to further 

reduce C02 emissions by retiring higher-emission coal and natural gas units and replacing them 

with lower-emission natural gas and zero-emission renewable energy resources. (!d. at 24.) In 

addition, NCARE supports the ERCR Plan because it provides for continued development of 

zero-emission new renewable energy resources in Nevada. (!d.) NCARE also notes that the coal 

plant retirement and elimination portion of the ERCR Plan places NV Energy in a strong position 

to comply with EPA's Proposed Carbon Rule ("lll(d) Draft Regulations"). (!d.) Finally, 

NCARE observes that the ERCR Plan accomplishes these desirable environmental and 

regulatory objectives in a manner that provides greater resource diversity and with lower costs to 

ratepayers than any of the alternative plans developed by Nevada Power. (!d. at 18, 24.) 

SNHG 

95. SNHG recommends that the Commission modify Nevada Power's proposed 

Preferred Plan by excluding the Moapa Project as a company-owned facility. (Ex. 54 at 21.) 

SNHG considers LV Cogen and Sun-Peak acquisitions to be reasonable; however, SHNG raises 

a number of concerns with regard to the Moapa Project. (ld. at 9.) 
Docket Nos. 14-05003 & 14-06022 Page 39 

96. First, SNHG contends that the Moapa Project should be a part of competitivelybid renewable replacement capacity rather than a part of Nevada Power's utility-owned 550 MW 

of non-technology-specific replacement capacity. (/d.) SNHG states that generating projects that 

are part of the 550 MW company-owned capacity come in at firm generating capacity, while 

projects that are a part of the 350 MW renewable capacity come in at nameplate capacity. (/d. 9-

10.) With the Moapa Project coming in at only 76 MW firm capacity as part of the 550 MW 

package, although it could be added at 200 MW nameplate capacity as part of the 350 MW 

package, SNHG is convinced that such a scenario of adding costly company-owned renewable 

generation was not contemplated, nor required, by SB 123. (/d. at 10.) 

97. Second, SNHG contends that the Moapa Project is not the least-cost approach to 

meeting the 550 MW of non-technology-specific capacity. (/d.) With the Sun-Peak and LV 

Cogen acquisitions supplying 496 MW of replacement capacity, SNHG suggests filling the 

remaining 54 MW with a combustion turbine instead of filling it with 200 MW of some of the 

most expensive power available. (/d.) SNHG contrasts an estimated $85 million cost of such a 

turbine with the $438 million Moapa Project price tag. (/d.) To support its proposition, SNHG 

cites to a scenario proposed by BCP, which replaced the Moapa Project with a 71 MW 

combustion turbine coming on-line in 2018. (/d. at 11-12.) SNHG reports that the present value 

savings from the BCP's scenario, compared to the Preferred Plan, are $121 million after 10 

years, $79 million after 20 years, and $64 million after 30 years. (/d. at 12.) 

98. SNHG further observes that, according to Nevada Power's PROMOD10 output 

report including the 71 MW combustion turbine, the facility would run only one hour, in the year 

2040, and thus would be practically unnecessary. (/d. at 12.) With the 71 MW combustion 

10 PROMOD is a production cost model and a proprietary software product that Nevada Power licenses from 

Ventyx, an ABB Company. (Exhibit 4 at 257.) 
Docket Nos. 14-05003 & 14-06022 Page40 

turbine removed, SNHG finds the Preferred Plan even more expensive by comparison: $180 

million after 10 years, $173 million after 20 years, and $163 million after 30 years. (/d. at 13.) 

SNHG calculates that leaving the Moapa Project in the ERCR Plan will result in a $50 million 

rate increase in Nevada Power's 2017 general rate case. (/d. at 14.) 

99. Third, SNHG contends that the Moapa plant addition is too costly to ratepayers as 

Nevada retail electric rates are already second highest among the 22 contiguous western states. 

(/d. at 15-17.) 

100. Fourth, SNHG contends that the Moapa Project is premature as a company-owned 

project. (/d. at 18.) SNHG asserts that the market price for independent solar projects may be 

lower than the price of a utility-owned project due to the requirement that utilities must 

normalize the lTC over the life of the project while independent power producers can take the 

credits up front. (/d.) SNHG further states that competitive bids for the first 100 MW of 

renewable energy to be opened in January 2015 will likely show that the Moapa Project would 

cost less if it were competitively bid as a PPA contract. (/d.) 

101. SNHG also notes that Nevada Power will have sufficient credits to meet its RPS 

even without the Moapa Project. (/d. at 17.) 

102. SNHG concludes that the Preferred Plan cannot satisfy the NRS 704.746(8) 

criteria. (ld at 18.) SNHG asserts that the Preferred Plan carries too high of a cost to ratepayers. 

(/d. at 19.) SNHG finds that the Preferred Plan does not provide the greatest economic benefit to 

Nevada because all of the economic benefits that might result from the construction and 

operation of the Moapa plant can be realized just as well if the Moapa Project is a part of the 350 

MW renewable capacity replacement. (/d.) Furthermore, SNHG asserts that it is more expensive 

for the State to add 550 MW of renewables over the next few years than it would be to just add 
Docket Nos. 14-05003 & 14-06022 Page 41 

the 350 MW ofrenewables expressly provided for in NRS 704.7316(b). (/d. at 20.) SNHG finds 

that the Moapa plant does not provide for the greatest job opportunities in Nevada because those 

same jobs would still exist even if the Company did not own the Moapa Project and because the 

electric rate increases associated with the plant will hamper job growth. (/d. at 20.) Finally, 

SNHG states that the Moapa Project does not represent the best value to Nevada Power 

customers because they would have to pay an extra $311 million over the first ten years if the 

plant is brought in as a company-owned resource rather than as a competitively-bid resource. (/d. 

at 14, 20.) 

Ormat 

103. Ormat takes an issue with Nevada Power's proposal to recover $1.9 million of 

development costs for siting activities near the Harry Allen substation. (Ex. 61 at 8-9.) Based on 

Nevada Power's filing in Docket No. 13-06023, Ormat contends that Nevada Power plans to 

offer the lands it acquires from the Bureau of Land Management ("BLM") to third-party 

developers of solar projects in the upcoming RFPs. (/d. at 9.) Ormat states that such projects 

could ultimately be owned by Nevada Power under a "build-transfer" option. (/d.) Ormat asserts 

that renewable RFP solar bidders using Nevada Power sites may have less risk to develop their 

projects and, thus, may have an unfair advantage over wind, geothermal, biomass, and biogas 

projects that cannot take advantage of Nevada Power's sites. (/d. at 10.) To level the playing 

field, Ormat proposes that bidders that use Nevada Power's sites internalize the costs of land in 

their bids, including Nevada Power's development costs in obtaining the rights to those lands, 

and, if a bidder is successful, ratepayers should receive a refund for the development costs 

approved under Nevada Power's proposal. (/d. 10-11.) 
Docket Nos. 14-05003 & 14-06022 Page 42 

104. Ormat advocates fair bid evaluation in the upcoming annual competitive 

renewable RFPs. Ormat proposes evaluation that reflects the full costs, benefits, and risks of 

different renewable resources. Ormat proposes that consideration should be given to (1) 

incremental system costs, including ancillary services and integration costs inherent in different 

resource types, (2) job creation benefits, (3) varying degrees of operational flexibility renewable 

resources provide, ( 4) ratepayer risks stemming from different procurement models, such as 

greater uncertainty in costs associated with utility-owned generators versus a PPA, and (5) 

measures to prevent utility affiliate bids, or bids that ultimately result in utility ownership, 

getting an unfair advantage. (!d. at 11.) To address these considerations, Ormat proposes specific 

bid rules, including requiring Nevada Power to incorporate integration costs of $10/MWh in its 

evaluation of solar PV bids in the upcoming renewable RFPs and setting out special conditions 

for utility-owned projects. (!d. at 22-39.) 

BCP 

105. BCP recommends that the Commission find that the economic impact analysis 

provided by Nevada Power is unclear in its benefits and negative attributes to the State of 

Nevada. (Ex. 64 at 3.) BCP addresses Nevada Power's economic analysis filed in response to 

NAC 704.9357 and NAC 704.9453(7), which consists of the analysis for the four alternative 

cases provided by NERA Economic Consulting and the Moapa analysis prepared by Applied 

Analysis. (ld. at 3-4.) 

106. BCP finds the NERA economic analysis flawed because the inputs analyzed by 

NERA differ from the modeling results included in the ERCR filing. (ld. at 4-5.) According to 

BCP, Nevada Power continued to negotiate various agreements and further develop the Preferred 

Plan subsequent to providing its modeling inputs to NERA on March 19, 2014. (ld. at 4.) BCP 
Docket Nos. 14-05003 & 14-06022 Page 43 

cites Moapa construction costs as an example of discrepancy. (!d. at 7.) According to BCP, the 

construction expenditures provided to NERA equal $577.7 million (includes $43.3 million 

AFUDC) while the construction expenditures in the ERCR Plan filing equal $471.6 million 

(includes $33.5 million AFUDC). (!d. at 7.) Such discrepancy affects Nevada gross domestic 

product ("GDP"), employment, personal income, and state/local tax impact calculations and 

potentially belies Nevada Power's conclusion that Case C is preferable to the other cases because 

of its more direct and immediate economic impacts in 2015 and 2016. (!d. at 5-7.) Other input 

differences involve the amount of energy produced, changes regarding the timing of plant, lower 

capital expenditures for certain plant, and higher expenditures for others. (!d. at 5-6.) 

107. BCP also finds flaws with the economic analysis of the Moapa Project conducted 

by Applied Analysis. BCP observes that the analysis does not compare the cases and instead 

analyzes only the Moapa Project, thereby limiting the usefulness of the analysis for IRP 

decisions. (!d. at 8.) BCP also disagrees with Applied Analysis's the job creation calculation 

method and the inputs Applied Analysis used. BCP asserts that the Moapa Project will create 

2,082 job years over 30 years, as it counts the net jobs created, not the 2,434 gross job years 

calculated by Applied Analysis without accounting for the jobs lost early in the life of the Project 

due to the overall energy price increase. (!d. at 8, 9, 11.) BCP notes that the offered analysis 

suffers from a timing problem and from the use of an improper discount rate. (!d. at 10.) Having 

recalculated the net economic impact using proper inputs, BCP estimates total economic output 

for the Project at $161 million, rather than $181.5 million, and total wages at $50.2 million, 

rather than $60.5 million. (ld. at 11.) 

108. BCP further states that it is unclear how Nevada Power weighed the many other 

factors outlined in the regulations in arriving at the selection of Case Cas the Preferred Plan. 
Docket Nos. 14-05003 & 14-06022 Page 44 

(!d.) Finally, BCP is concerned that the survey provided to the 20 largest employers pursuant to 

NAC 704.9453(7)(c) raises questions because it contained generalities and lacked information 

that would produce informed responses. (!d. at 12.) 

109. BCP recommends that the Commission approve Nevada Power's request to 

acquire the Sun-Peak facility, LV Cogen 1, and LV Cogen 2 and reject Nevada Power's request 

to construct and own the Moapa Project. (Ex. 66 at 8-9, 21.) BCP considers the Nevada Powerowned Moapa Project too costly and unnecessary and disagrees with Nevada Power's assertion 

that the project provides resource diversity. BCP asserts that spending nearly a half-billion 

dollars on a project intended to fulfill only 54 MW of non-technology-specific 550 MW of 

capacity is excessive. (!d. at 9.) BCP states that the goal can be met more economically by 

constructing a 71 MW combustion turbine in 2018, for a $64 million 30-year PWRR difference. 

(!d. at 9, 11.) However, BCP notes that the combustion turbine also appears unnecessary, as it 

was not dispatched in production cost modeling except for two hours in 2040. (!d. at 11-12.) 

Without the 71 MW combustion turbine, BCP calculates even greater savings for ratepayers in 

the form of a $108 million 30-year PWRR difference. (Ex. 67 at 3.) BCP states that the 

differential between the Preferred Plan and the Preferred Plan without the Moapa Project is even 

greater if the integration costs of the Moapa Project are taken into account; the result is a $143 

million 30-year PWRR difference with $2/MWh integration cost. (Ex. 66 at 15-16; Ex. 67 at. 5.) 

BCP concludes that, for every one dollar in economic benefit related to Moapa, ratepayers are 

subsidizing three dollars of costs. (Ex. 67 at 6.) 

110. BCP also provides the results of a levelized cost of energy ("LCOE") analysis it 

performed. BCP calculates the Moapa Project's LCOE at $111 per MWh, while the LCOE of a 

hypothetical combined cycle is approximately $70 per MWh under base fuel and purchased 
Docket Nos. 14-05003 & 14-06022 Page 45 

power conditions and $103 per MWh under high fuel and purchased power conditions. (Ex. 66 at 

16-17.) BCP argues that this result also illustrates that the Moapa Project does not offer a hedge 

to natural gas volatility and undermines the resource diversity that Nevada Power credits the 

Preferred Plan with achieving. (/d.) BCP's comparison of Moapa's LCOE with the LCOE of an 

approved renewable PPA and renewable placeholder LCOE for the RFPs also shows that 

Moapa's LCOE is high. (/d. at 17-18.) BCP explains that Moapa's high LCOE is attributable to 

Nevada Power's inability to take the entire amount of lTC in the first year, as non-utility 

resource owners can. (/d. at 19.) The LCOE of Moapa would drop to $89 per MWh if Nevada 

Power were able to take the entire lTC in the first year. (/d. at 19.) 

111. BCP provides data on anticipated efficiency improvements and cost decreases of 

First Solar's panels to argue that, if a project similar to Moapa is to be constructed with First 

Solar panels in 2018, the system cost could be similar to or lower than the current systems using 

the 30 percent lTC advantage. (/d. at 20.) Thus, BCP argues the Moapa Project, which is to use 

current, less-efficient First Solar panels, should not be rushed to attain the 30 percent lTC. (/d.) 

112. Finally, BCP argues that the Moapa Project is unnecessary. BCP states that the 

plant is unnecessary for RPS compliance because the Preferred Plan, which effectively provides 

550 MW of renewable resources, would extend the RPS compliance into 2033 under base load 

conditions while the Alternate Plan or the Preferred Plan minus Moapa would extend RPS 

compliance until2027. (/d. at 10.) BCP argues that SB 123 did not contemplate the addition of 

550 MW of renewable generating capacity. BCP states that the Legislature, having been 

supplied with BCP's analysis showing RPS compliance until2030 with 600 MW of renewable, 

chose to reduce the original NV Energy proposal for 600 MW of renewable capacity to 350 MW. 

(/d.) 
Docket Nos. 14-05003 & 14-06022 Page 46 

113. Noting the comparatively high LCOE of the Nellis Project, BCP does not oppose 

the Nellis Project and recognizes the value to ratepayers from the 2.4 multiplier for renewable 

credits. (ld. at 21-22.) 

Staff 

114. Staff recommends the Commission approve the acquisition and construction of 

the generation and transmission assets presented in Nevada Power's Preferred Plan. (Ex. 76 at 3.) 

However, Staff recommends the Commission deem the economic analysis performed by Nevada 

Power inadequate and order modifications to the Plan. (!d. at 4.) 

115. Staff states that the rushed preparation of the First Amendment Application led to 

the inclusion of inaccurate or unreliable information within the Application, such as inaccurate 

PWRR and PWSC calculations. (ld. at 6.) Additionally, Staff asserts that the Preferred Plan and 

the resources within it were pre-selected before any PWRR and PWSC data became available. 

(!d.) One of the examples Staff provides to support its assertion is that Nevada Power committed 

to First Solar supplying equipment for the Moapa Project on April4, 2014- before PWRR 

analysis was completed and before the PWSC data was received from NERA. (!d. at 7.) 

116. Reflecting on whether the Preferred Plan comes at an attractive cost to the 

customers of Nevada Power and represents the best value to them, 11 Staff disagrees with Nevada 

Power's PWRR analyses and its statements that the Preferred Plan delivers the lowest 20-year 

PWRR in six of the 12 scenarios. (Ex. 79 at 18-19.) Staff contends that Nevada Power made at 

least seven major modeling errors that skew the PWRR analyses in favor of the Preferred Plan. 

(ld. at 19.) First, Staff states that Nevada Power overestimated capital costs of Case A by 

including the cost of an unnecessary water treatment facility. (ld. at 19-20.) Staff states that the 

11 NRS 704.746 items (a) and (d). 
Docket Nos. 14-05003 & 14-06022 Page 47 

error resulted in an overestimation of Case A's 20-year PWRR by $20 million. (ld. at 20.) 

Second, Staff notes that Nevada Power failed to include $37.3 million of additional capital 

upgrades for LV Cogen units within its CER analysis. (/d.) Staff calculates correction of this 

error results in the 20-year and 30-year PWRRs of the Preferred Plan being understated by $35 to 

$45 million. (ld.) Third, Staff finds that Nevada Power has loaded the Alternate Plan with more 

expensive geothermal renewable placeholders while allocating comparatively more PV 

renewable placeholders to the Preferred Plan. (ld. at 21.) Staff calculates correcting this issue 

would lower the 20-year PWRR of Case A by $9 million and the 30-year PWRR by $28 million. 

(ld.) Fourth, Staff notes that Nevada Power overestimated the Moapa Project annual output 

because it used its consultants' estimates rather than the manufacturer's performance guarantee 

figure. (ld.) Staff's adjustment of the annual output increases the 20-year PWRR for the 

Preferred Plan by approximately $4 million and the 30-year PWRR by approximately $5 million. 

(ld. at 22.) Fifth, Staff finds that Nevada Power underestimated O&M costs for the Moapa 

Project because it used lower preliminary O&M costs as opposed to the actual O&M figures 

provided in the contracts. (ld.) Staff's adjustment increases the 20-year PWRR for the Preferred 

Plan by $3 million and the 30-year PWRR by $4 million. (ld.) Sixth, Staff states that Nevada 

Power failed to adequately explain the reason(s) for the necessity of adding four additional 

transmission reliability improvements in Case A but not Case C. (ld. at 22-23.) These additional 

projects result in the 20-year PWRR for Case A being overstated by $27 million and the 30-year 

PWRR being overstated by $33 million. (ld. at 23-24.) Finally, Staff finds that Nevada Power 

overestimated the cost of Case A by applying an improper property tax rate. (ld. at 24.) Staff 

relates that Nevada Power plans to locate the combined cycle unit at Reid Gardner and, 

accordingly, should use the rural property tax rate as it has done in the past. (/d.) Staff states 
Docket Nos. 14-05003 & 14-06022 Page 48 

that, instead of the lower rural property tax rate of 2.7 percent, Nevada Power used a higher 

Clark County blended rate of 3.03 percent, which overestimates the 20-year PWRR by about $5 

million and the 30-year PWRR by about $6 million. (/d.) Staff states that accounting for all 

seven errors results in the Preferred Plan being approximately $105 million more expensive than 

the Alternate Plan on a 20-year basis and approximately $201 million more expensive on a 30-

year basis under the Base Case Mid-Carbon scenario. (/d. at 25-26.) 

117. Staff states that, PWRR comparisons aside, the Preferred Plan does not offer 

significant advantages over the Alternate Plan in terms of resource diversification or carbon 

emissions. (/d. at 27.) Staff cites Nevada Power data which shows that, under the Preferred Plan, 

Nevada Power reduces its natural gas exposure by only four percent and its spot market exposure 

by only two percent compared to the Alternate Plan. (/d. at 26.) Staff further points to Nevada 

Power data that show the Preferred Plan performing worse than the Alternate Plan under a high 

carbon scenario. (/d. at 27.) Staff provides Nevada Power's explanation for this seeming 

irregularity - that less efficient conventional resources, which are used during some peak load 

hours, emit more carbon and perform with higher heat rates than Case A's combined cycle unit. 

(/d.) 

118. Staff agrees with BCP that Nevada Power's failure to include an alternative plan 

containing LV Cogen 1, LV Cogen 2, Sun-Peak, Nellis Project, and a small combustion turbine 

instead of the Moapa Project represented an omission, and such an alternative would have been 

more economical. (/d. at 28-29.) 

119. Nevertheless, Staff supports the acquisition and construction of the individual 

resources comprising the Preferred Plan as long as the Commission approves the modifications 

and conditions Staff is recommending. (/d. at 29-32.) Staff notes the high cost of the Nellis and 
Docket Nos. 14-05003 & 14-06022 Page 49 

Moapa Projects expressed in LCOEs of $121.92 and $111.45, respectively, but agrees with 

Nevada Power's assessment of the benefits of the Projects, such as retention of Nellis AFB as a 

Nevada Power customer, the Nellis Project eligibility for the 2.4 portfolio credit multiplier, 

location of both projects within the Las Vegas valley load pocket, and eligibility of both projects 

for the federal 30 percent lTC. (!d. at 30-33.) 

120. Staff's first proposed ERCR Plan modification states that the Commission's 

approval should be contingent on Nevada Power acquiring or building all the generation 

resources comprising the Preferred Plan. (!d.) Staff included this condition to protect ratepayers 

in case Nevada Power is unable to close on the acquisition of one or more of the generation 

assets that comprise the Preferred Plan. (!d. at 37.) Staff is concerned with the cost of the 

Preferred Plan should Nevada Power be unable to complete opportunistic acquisitions of LV 

Cogen 1, LV Cogen 2, or Sun-Peak to offset the high cost of the Moapa Project. (/d.) 

121. Staff's second modification proposes that, with the approval of the Preferred Plan, 

the Commission should find that Nevada Power has fulfilled the requirement of NRS 

704. 7316(2) with regard to the construction or acquisition of the entire 550 MW companyowned, non-technology-specific capacity. (!d. at 4.) 

122. Staff's third modification suggests that, with the approval of the Preferred Plan, 

the Commission should find that Nevada Power has fulfilled the requirement of NRS 

704.7316(2)(b)(6) with regard to the construction or acquisition of all 50 MW of companyowned renewable generation. (!d. at 4). Staff notes that the 15 MW nameplate capacity Nellis 

Project and block 1 of the Moapa Project with 45 MW nameplate capacity exceed the 50 MW 

requirement ofNRS 704.7316(2)(b)(6). (!d. at 38). At the same time, Staff observes that the 

remaining four blocks of the Moapa Project, together with the conventional generation being 
Docket Nos. 14-05003 & 14-06022 Page 50 

acquired, have planning capacity of 555 MW and, thus, satisfy the 550 MW requirement of NRS 

704.7316(2)(c). (!d. at 39.) Staff asserts that NRS 704.7316 does not preclude segregation of a 

resource to fulfill more than one replacement capacity category. (!d. at 40.) Staff states that 

removing the need to construct the additional35 MW of solar PV results in the 20-year PWRR 

for the Preferred Plan decreasing by approximately $53 million and the 30-year PWRR 

decreasing by $61 million. (ld. at 42.) 

123. Staff's fourth modification proposes that, with the approval of the Preferred Plan, 

the Commission find that Nevada Power is obligated to protect and insulate ratepayers from any 

performance or warranty issue that may arise with the Moapa or Nellis Projects, which results in 

the annual output of the facilities falling below the supply table amounts used in this filing. (!d. 

at 4-5.) Staff does not agree with Nevada Power that the contractual protections and 

performance guarantees Nevada Power received from the Moapa and Nellis Projects' developers 

adequately protects ratepayers. (ld. at 43.) Staff is concerned that Nevada Power may not 

vigorously pursue its contractual remedies or that the ratepayers may be subject to a lag between 

the equipment malfunction and subsequent recovery by Nevada Power. (!d.) Staff argues that 

company-owned resources should be subject to the same conditions as independent producers' 

resources supplying electricity to Nevada Power under a PPA: when energy supply falls below 

what was contracted for, independent producers pay for any shortfall in supply regardless of 

whatever recourse they may have. (Jd. at 43-44.) 

124. Staff's fifth modification proposes that, with the approval of the Preferred Plan, 

the Commission find that only the initial construction and acquisition costs of the generating 

facilities within the Preferred Plan qualify for the incentivized accounting treatment outlined in 

NRS 704.7317. (!d. at 47.) Staff opposes Nevada Power's request to include $4.53 million of 
Docket Nos. 14-05003 & 14-06022 Page 51 

potential future capital investment in Sun-Peak along with the actual purchase price of Sun-Peak 

as acquisition costs in the special NRS 704.7317 regulatory asset account. (Ex. 76 at 3-4.) Staff 

argues that, pursuant to NAC 704.95245(2)(a), only the acquisition portion of the Sun-Peak 

investment qualifies for regulatory asset treatment. (!d. at 5.) Staff further notes that, although 

NAC 704.9453(4) allows for regulatory asset treatment of ancillary utility facilities, such 

facilities must be necessary for the operation or interconnection of generating facilities included 

in the ERCR Plan. (!d. at 5-6.) Staff asserts that the $4.53 million worth of upgrades cannot be 

necessary for the operation or interconnection of Sun-Peak because (1) the facility is already 

interconnected to the Nevada Power system and has been operating reliably since 1991, and (2) 

Nevada Power has relied upon the Sun-Peak capacity in its loads and resources tables for years 

without the proposed upgrades. (!d. at 6.) Staff agrees with Nevada Power that the Company 

would not be incurring the expense of these upgrade projects but for the acquisition of Sun-Peak; 

however, Staff finds this an insufficient qualifier for the regulatory asset treatment. (!d. at 8.) 

Staff argues that Nevada Power's interpretation would allow any subsequent investment in an 

ERCR facility to qualify for the special treatment in perpetuity and limit the Commission's 

review at the next appropriate general rate case for such capital expenses. (!d. at 8-9.) 

125. Staff further states that there is no basis in the accounting rules to grant regulatory 

asset treatment to the Sun-Peak upgrades investment. (Ex. 78 at 10-11.) Using the FERC's 

Uniform System of Accounts ("USOA") as guidance, Staff states that the costs of acquisition are 

charged to Account No. 102, Electric Plant Purchased or Sold, while any plant improvements are 

accounted for in Account No. 107, Construction Work in Progress. (!d. at 10.) Staff further 

references the Electric Plant Instructions for Electric Plant Purchased or Sold, which state that if 

an operating unit acquired requires substantial rehabilitation to meet the standards of the utility, 
Docket Nos. 14-05003 & 14-06022 Page 52 

the cost of such work shall be accounted for as a part of the purchase price. (/d.) Staff does not 

believe such accounting treatment is justified in this case because Sun-Peak has been operated by 

Nevada Power for many years and has apparently met Nevada Power's operating, reliability, and 

safety standards during that time. (/d.) 

126. Staff is concerned with the high cost of the land lease for the Moapa Project. (Ex. 

79 at 47-48.) Staff notes that the Moapa lease is considerably more expensive than the lease cost 

of a similar project located on BLM land. (/d. at 48.) To counteract the high cost of the lease, 

Staff proposes the Commission orders Nevada Power to aggressively pursue two amendments to 

the lease agreement. (/d. at 52.) The first amendment would require the Moapa Band of Paiutes, 

the landowner, to agree not oppose any future action taken by Nevada Power to permit and 

construct new natural gas generation facilities at the existing Reid Gardner site. (/d.) The second 

amendment would require the Moapa Band of Paiutes to support the use of the Moapa Project as 

a renewable energy facility for the State's use for compliance with the EPA's 111(d) Draft 

Regulations. (/d.) Staff asserts that the first proposed amendment to the lease will deliver value 

to ratepayers by greatly reducing the costs of placing into operation new combined cycle gas 

generation at the Reid Gardner site. (/d. at 49.) Staff notes that such facilities would be located 

on a potential brownfield site with both electric and natural gas transmission access. (/d.) 

127. Staff recommends that the Commission reject Nevada Power's request to spend 

$1.9 million on initial siting activities for one or more proposed new solar PV facilities to meet 

Nevada Power's RPS and the additional renewable energy requirements of NRS 

704.7316(2)(b)(6) and NRS 704.7316(2)(c). (Ex. 75 at 4.) Staff argues that Nevada Power has 

fulfilled the requirements of NRS 704.7316(2)(b)(6) and NRS 704.7316(2)(c) through its 

Preferred Plan with regard to construction or acquisition of 50 MW of company-owned 
Docket Nos. 14-05003 & 14-06022 Page 53 

renewable nameplate capacity and 550 MW of non-technology specific capacity. (/d. at 7.) 

Furthermore, Staff contends that Nevada Power does not require any new renewable generation 

to comply with its RPS because, as shown in the Renewable Energy Plan, Nevada Power is 

projected to be compliant through at least 2030. (/d.) While Staff realizes the value of BLM land 

leasing, Staff notes that Nevada Power does not have a need for additional renewable energy in 

the near, intermediate, or long-term planning future. (/d.) Accordingly, Staff argues against 

granting resource planning approval for the $1.9 million request to expend funds to develop land 

for potential projects that are not needed and have yet to be approved by the Commission. (/d. at 

7-8.) 

128. Staff is concerned that conversion of solar PV nameplate capacity into planning 

capacity using the 38 percent factor is no longer accurate. (Ex. 74 at 3.) Staff argues that, with 

the introduction of more solar PV facilities serving Nevada Power's load and Air Conditioning 

Load Management ("ACLM") demand response program, Nevada Power's system peak is 

shifting to a later time of day. (/d. at 4-5.) With the system peak occurring at a time of day when 

solar resources are not contributing much electricity, Staff suspects solar PV planning capacity 

value may be lower than 38 percent. (/d. at 5) Staff proposes the Commission direct Nevada 

Power to perform an analysis of the appropriate capacity value for PV generating resources for 

planning purposes moving forward. (/d. at 6.) For the updated planning capacity value to be 

applicable to proposals responsive to the three 100 MW renewable RFPs, Staff suggests that the 

analysis be filed as part of the IRP amendment filing early in 2015 to coincide with Nevada 

Power's request for Commission approval of the first 100 MW of renewable energy. (/d. at 6.) 

129. Staff recommends that the Commission approve Nevada Power's request to issue 

three 100 MW RFPs for renewable resources pursuant to the schedule provided in the ERCR 
Docket Nos. 14-05003 & 14-06022 Page 54 

Plan. (Ex. 73 at 2.) Staff represents that the schedule created by Nevada Power is compliant with 

NRS 704.7316(2)(b), reasonable, and consistent with parties' discussions. (ld. at 2-3.) Staff 

notes that Nevada Power is not obligated to accept the winning RFP bids, but to merely negotiate 

in good faith to construct, acquire, or contract with the winning RFP bidders. (/d. at 3-4.) 

Furthermore, Staff notes that the Commission retains discretion to approve any and all winning 

bids' resulting PPAs in future IRP filings. (/d. at 5.) 

130. Staff recommends that the Commission find that Nevada Power's Renewable 

Expansion Plan is a reasonable method to comply with the RPS throughout the 30-year planning 

period. (/d. at 5.) Staff observes that Nevada Power created an individualized Renewable Plan 

for each of the four ERCR Cases. (/d.) Staff notes that Nevada Power added generic placeholder 

projects to each individualized Renewable Plan with the goals of minimizing the overall number 

of placeholders and the amount of surplus PCs and without apparent regard for cost or the ability 

to move renewable energy produced in northern Nevada to the Nevada Power service territory. 

(/d. at 6-7.) Staff does not take issue with the generic renewable placeholder selection from the 

perspective of creating a Renewable Plan to model one potential way to maintain RPS 

compliance. (ld. at 7.) However, Staff expresses concern regarding the same generic 

placeholders influencing the ranking of the Cases by being factored in the PWRR calculation and 

modeled in NERA's economic impact analysis. (ld.) 

131. Staff recommends that the Commission find that the NERA report does not 

provide reliable information to support the Preferred Plan. (/d. at 10.) Staff states that, for the 

purpose of evaluating ERCR Plan alternatives according to the NRS 704.746 criteria, the NERA 

report should have been the frontrunner tool for picking the preferred plan, as it quantifies 

economic benefits and potential for job creation for the four alternative cases. (/d. at 12.) Staff 
Docket Nos. 14-05003 & 14-06022 Page 55 

questions the usefulness of the report in evaluating the alternatives, observing that the report was 

created at the same time as the ERCR Preferred Plan, and thus could not have influenced the 

selection, and that the report was based on inaccurate and outdated inputs. (/d. at 13.) 

132. Staff argues that the Commission cannot make planning decisions based upon the 

environmental cost analysis numbers presented in the report because the PROMOD results used 

as inputs in the report differ from the final PROMOD results used in the ESP Update, and 

Nevada Power is unsure whether the use of the final PROMOD results would have changed the 

rankings of the four cases. (/d. at 13-14.) 

133. Staff argues that the Commission cannot make planning decisions based upon the 

economic impact analysis presented in the report. (/d. at 15.) Staff notes that, pursuant to NAC 

704.9357, the NERA Report modeled the changes in economic activity in Nevada over the 20-

year planning period for Nevada GDP, employment, personal income, and state and local tax 

payments. (/d. at 14.) Staff asserts that the modeling results do not provide adequate comparison 

of the impacts of alternative cases on the Nevada economy because the cases have different 

generic renewable placeholders that arbitrarily influence electricity prices among the Cases. (/d. 

at 15-16.) 

134. Staff argues that the Commission should not make planning decisions based on 

the Applied Analysis' report, which examined the net economic impact of the Moapa Project. 

(/d. at 17.) Staff notes that Applied Analysis compared the benefits from the Moapa Project to 

the benefits of a scenario in which Nevada Power buys power at market rates rather than the 

benefits of the Alternate Plan, specifically, job creation and economic benefits from a new 

combined cycle plant. (/d.) As such, Staff contends that the Applied Analysis report provides 

little value for the Commission's decision-making. (/d.) 
Docket Nos. 14-05003 & 14-06022 Page 56 

135. Staff supports granting a waiver of the requirement contained in NAC 

704.9453(8). (Ex. 79 at 15.) Staff states that its review of Nevada Power's relevant confidential 

documents demonstrated that other possible opportunities to fulfill the 550 MW of companyowned generation were either not viable or were not ripe enough to be compared against the 

conventional resources included in the Preferred Plan. (!d.) Staff also notes that denying the 

waiver request would essentially amount to rejecting the entire ERCR filing. (!d.) 

Nevada Power Rebuttal 

136. In response to Griffith's advocacy of long-term benefits of a PPA between 

Nevada Power and Griffith, Nevada Power cautions against over-reliance on tolling agreements, 

such as the one in place with Griffith. (Ex. 93 at 30-31.) Nevada Power states that reliance on 

non-company-owned resources carries its own cost and risk profile. (!d. at 31.) As an example, 

Nevada Power states that the payments associated with the Griffith contract are not insignificant 

and, without the fuel cost used for generation at the plant, will resultin payments of $47.3 

million in 2015, $48.75 million in 2016, and $50.2 million in 2017 payments. (ld.) 

137. Nevada Power disagrees with SNHG's proposal to remove the Moapa Project 

from the Preferred Plan. (Ex. at 26-27.) First, Nevada Power disagrees with SNHG's assertion 

that the 200 MW capacity of the Moapa Project can only be counted towards renewable capacity 

of the three 100 MW RFPs, not the 550 MW of non-technology-specific capacity. (ld. at 27.) 

Nevada Power finds such a position inconsistent with the plain language and history of NRS 

704.7316. (ld.) Nevada Power contends the statute does not prohibit inclusion of a solar PV 

facility as part of its 550 MW company-owned portion of the ERCR Plan. (!d.) Second, Nevada 

Power disagrees with SNHG's assertion that the Preferred Plan is not the least-cost capacity 

replacement approach. (ld. at 28-29.) Nevada Power observes that, in reaching its conclusion, 
Docket Nos. 14-05003 & 14-06022 Page 57 

SNHG looked at the PWRRs of the base cases only, neglecting to consider that the Preferred 

Plan performed equally as well as Case A across six of the 12 scenarios with varied load growth, 

fuel prices, and carbon prices, and better than Case B across the board. (!d. at 29.) Nevada 

Power further notes that the Preferred Plan has positive attributes not present in Cases A and B, 

such as replacing Reid Gardner units 1-3 on January 1, 2015, improving fuel diversity, and 

diminishing exposure to natural gas markets. (/d. at 29-30.) Finally, Nevada Power does not find 

the two alternative expansion plans proposed by SNHG appealing because they disrupt the 

balanced outcome achieved by the Preferred Plan. (/d. at 30.) 

138. To alleviate Ormat's concerns that PV resources will be given an unfair advantage 

in the upcoming NRS 704.7316(2)(b) 100 MW RFPs over other types of renewable generation 

through availability of Nevada Power-procured sites for PV resources, Nevada Power states that 

the prorated land permitting and developing costs will be added to the price bid submitted by any 

bidders seeking to use any portion of such site. (Ex. 82 at 15-16.) With regard to the 100 MW 

RFP bid evaluation criteria, Nevada Power states that bid evaluation criteria recommended by 

Ormat is the subject of ongoing Docket No. 13-06023 and should not be adopted as part of the 

ERCR Plan. (!d. at 16.) 

139. Nevada Power disagrees with the BCP's assertion that any party can propose a 

different combination of replacement capacity options for Nevada Power's ERCR Plan. (Ex. 93 

at 24-25.) Nevada Power cites to NRS 704.741(8) for the proposition that any Commission 

order rejecting or modifying an element of the ERCR Plan, unless accepted by Nevada Power, 

will result in the withdrawal and subsequent re-filing of a new ERCR Plan. (/d. at 25.) 

140. Nevada Power opposes the adoption of the alternative plan developed by BCP, 

which includes substituting the Moapa Project with a 71 MW combustion turbine. (/d. at 25-26.) 
Docket Nos. 14-05003 & 14-06022 Page 58 

First, Nevada Power notes that such a plan does not increase fuel diversity, does little to create 

jobs and advance the development of renewable energy in Nevada, and introduces a high-heat 

rate peaking unit. (ld. at 26.) Second, Nevada Power asserts that the BCP-developed plan upsets 

the careful balance of customer and Company interests achieved by combining the high-cost 

Moapa Project with low-cost gas acquisitions of existing facilities. (/d. at 26.) 

141. Nevada Power claims that BCP's comparison of the Moapa LCOE with the 

published LCOE from three different solar projects is not useful. (Ex. 82 at 14-15.) Nevada 

Power explains that the first two comparisons are to proxy projects that have no sites or permits, 

while the third comparison is the SNW A project with vastly different physical characteristics and 

contractual provisions. (/d. at 15.) Nevertheless, Nevada Power concedes the validity of BCP's 

discussion of the importance of the ability to monetize the lTC as a critical component to the 

economics. (/d. at 15.) Nevada Power notes, however, that the PPA described by BCP as an 

alternative to the company-owned Moapa Project does not offer the same benefits of 30-year 

resource ownership with the unilateral option to extend production at the site for an additional 20 

years. (ld.) 

142. Nevada Power states that BCP's economic analysis does not represent 

comprehensive resource planning practices, which led BCP to draw incorrect conclusions. (Ex. 

92 at 19.) Nevada Power argues that BCP overstates the savings of removing the 71 MW 

combustion turbine from the BCP-developed plan that includes Sun-Peak, LV Cogen 1, LV 

Cogen 2, Nellis, and the 71 MW combustion turbine in place of the Moapa Project. (/d. at 17-

18.) Nevada Power observes that BCP failed to account for the capacity value provided by the 

combustion turbine: $57 million over 20 years and $72 million over 30 years. (/d.) Nevada 

Power further states that BCP incorrectly applied case-specific renewable placeholder savings to 
Docket Nos. 14-05003 & 14-06022 Page 59 

an unrelated case and failed to realize that the Moapa Project integration costs were already 

accounted for in the analysis. (!d. at 18) 

143. Nevada Power disagrees with Staff's assertion that the results of the Company's 

analysis were predetermined and that modeling was performed to achieve certain results. (Ex. 93 

at 20.) Nevada Power states that the fact that its initial case matrix considered Case C, which 

included a generic 200 MW solar facility, does not mean the Preferred Plan was predetermined. 

(/d. at 21.) Nevada Power further states that the modeling inputs for a generic 200 MW PV 

facility were refined and updated to reflect the characteristics of the transaction that was being 

negotiated for the Moapa Project. (!d. at 21.) 

144. Nevada Power agrees with Staff's recommendation that the approval of the ERCR 

Plan be predicated on the Company's ability to acquire and construct all of the generation 

requested in the Preferred Plan. (!d. at 24.) 

145. With respect to Staff's assertion that approval of the Preferred Plan satisfies the 

entire need for 50 MW of Company-owned renewable generation under NRS 704.7316(2)(b)(6), 

Nevada Power agrees that a decision adopting such a view would obviate the need and expense 

associated with Nevada Power constructing and owning an additional 35 MW of renewable 

energy resources by 2021. (!d. at 32.) Nevada Power notes that Staff's recommendation to deem 

the 50 MW capacity fulfilled with the approval of the Preferred Plan maintains the integrity of 

the replacement capacity package and produces an acceptable alteration of the regulatory 

recovery balance. (!d.) Nevada Power disagrees with Staff's calculations of the impact the 

removal of the 35 MW of additional capacity will have on Case C PWRR. (Ex. 92 at 13.) 

Nevada Power states that taking into account the effect of the removal on capacity costs, the cost 

of the replacement capacity, the removal of the O&M for the 35 MW PV facility, and the impact 
Docket Nos. 14-05003 & 14-06022 Page 60 

on the future renewable placeholders results in the 20-year PWRR for Case C decreasing by only 

$23 million and the 30-year PWRR decreasing by only $27 million. 12 (!d.) 

146. Nevada Power disagrees with Staff's analysis of the seven alleged modeling 

errors in Nevada Power's economic analysis. (Ex. 92 at 4.) First, Nevada Power argues that the 

$22 million wastewater treatment facility cost was properly included within the $699 million 

cost assumed for a new combined cycle unit of Case A. (!d. at 5.) Nevada Power states the cost 

can only be excluded once the project is approved, a brownfield site that negates the need for the 

wastewater treatment facility is selected, and site-specific engineering has been completed. (!d.) 

Nevada Power further argues that, if the cost adjustment is made to Case A, then it must be made 

to Case C as well because Case C contemplates the addition of a combined cycle unit at 2020, 

which has the same "likely" location at Reid Gardner. (!d. at 6.) Second, Nevada Power 

disagrees with Staff's assertion that Nevada Power failed to include $37.5 million of additional 

upgrades for LV Cogen units within its analysis. (!d. at 6.) Nevada Power states that such costs 

are not normally included for the purposes of resource cost modeling, and similar costs were not 

included in Cases A and B either, because such costs are uncertain. (!d. at 7.) Third, Nevada 

Power agrees with Staff that replacing geothermal renewable placeholders with PV renewable 

placeholders in Case A lowers the 20 and 30-year PWRRs of Case A as calculated by Staff. (!d. 

at 8-9.) Fourth, Nevada Power also agrees with Staff that the final, reduced, energy output 

estimates for the Moapa Project were not captured in the filed Case C. (!d. at 9.) Fifth, Nevada 

Power agrees with Staff that the final, increased O&M estimates for the Moapa Project were not 

captured in the filed Case C. (!d.) Sixth, Nevada Power disagrees with Staff's observation that 

Nevada Power incorrectly omitted costs for the four transmission upgrade projects from Case C 

12 Staff calculated the 20-year PWRR decrease of $53 million and 30-year PWRR decrease of $61 million. 
Docket Nos. 14-05003 & 14-06022 Page 61 

that were included in Case A. (/d. at 9-10.) Nevertheless, Nevada Power concedes that Case C 

should have included three of the four transmission upgrade projects with an in-service date of 

2025 and increased the 20-year PWRR for Case C by $16 million and the 30-year PWRR by $22 

million. (/d. at 10-11.) Seventh, Nevada Power disagrees with Staff that a site-specific property 

tax rate should have been used for the 2018 combined cycle Unit in Case A. (/d. at 11.) Nevada 

Power states that a site-specific property tax rate is inappropriate until the project is approved 

and site-specific engineering is complete. (/d.) Nevada Power states that adjusting the relative 

cost data in accordance with the calculations and arguments above results in the PWRR 

difference between Cases A and C that is much smaller than that suggested by Staff: a $33 

million difference in the 20-year PWRR and $61 million difference in the 30-year PWRR. (!d. at 

12.) 

14 7. Taking into account the effects of the seven modeling points and the removal of 

the 35 MW PV project, Nevada Power recalculates that Case Cis $12 million more expensive 

than Case A in the 20-year term and $98 million more expensive in the 30-year term. (/d. at 15.) 

Nevada Power previously calculated a 20-year PWRR difference of $2 million and 30-year 

PWRR difference of $64 million. (/d.) 

148. Nevada Power disagrees with Staff's recommendation that Nevada Power's 

customers should be further insulated from any performance or warranty issues that may arise 

during the projected operating lives of the Moapa or Nellis Projects. (Ex. 82 at 11.) Nevada 

Power states that it has negotiated agreements with the developers of both Projects that provide 

for equipment warranties, tie compensation to performance, and utilize liquidated damages to 

enforce compliance with performance requirements. (/d.) Nevada Power acknowledges that it is 

accountable for enforcing the terms and conditions in the agreements negotiated in the Nellis and 
Docket Nos. 14-05003 & 14-06022 Page 62 

Moapa Projects. (/d. at 12.) Nevada Power states that terms and conditions of PPAs do not 

insulate customers from all performance issues as insinuated by Staff. (/d. at 12-13.) Nevada 

Power represents that, once a resource is on-line, the seller under a PPA has significant 

flexibility to modify its supply tables with no recourse or penalty. (/d. at 13.) Nevada Power 

repeatedly states that to fully insulate customers from all performance risk, the cost provisions of 

the Nellis and Moapa Projects will have to be renegotiated. (!d. at 11-12.) 

149. Nevada Power opposes Staff's recommendation for the Commission to order 

Nevada Power to amend the Moapa Solar lease agreement as part of the ERCR Plan approval. 

(Ex. 82 at 13-14.) Nevada Power states that it is not yet a party to the lease agreement and is not 

in the position to seek concessions from the Moapa Band of Paiutes regarding future 

development at the Reid Gardner site. (/d.) 

150. Nevada Power disagrees with Staff's recommendation that the $4.53 million cost 

of upgrades at the Sun-Peak facility should not receive regulatory asset treatment. Nevada 

Power argues that Staff's recommendation does not fully recognize the plain language of the 

statutes and regulation governing the ERCR Plan. (Ex. 93 at 8.) Referencing the same FERC 

USOA instructions relied upon by Staff, Nevada Power first states that the $250,000 

environmental monitoring equipment project is necessary to bring the existing conditions at SunPeak into conformance with environmental requirements that apply to Nevada Power and should 

be accounted for as part of the Sun-Peak acquisition price. (Ex. 93 at 11.) Nevada Power further 

argues that the $3.35 million control systems replacement project and the $150,000 work 

management system project should also be included in the Sun-Peak acquisition price as NAC 

704.9453(4) "facilities necessary for the operation or interconnection of an electric generating 

plant .... " (!d. at 11-12.) Nevada Power asserts that these projects make the conditions at the 
Docket Nos. 14-05003 & 14-06022 Page 63 

Sun-Peak facility conform to the uniform standards that Nevada Power applies to its generating 

units and allows it to operate the plant as described in the current staffing plan. (Ex. 93 at 12; Ex. 

80 at 3.) Nevada Power also continues to advocate for regulatory asset treatment of the battery 

bank replacement project at Sun-Peak. (Ex. 93 at 13.) Nevada Power claims that the project is a 

safety item and reflects standard practice. (!d.) Nevada Power asserts that, for the four projects 

above, continued Sun-Peak operation without completion of these projects may present future 

safety, operational, or regulatory and reliability risk. (Ex. 80 at 3.) Nevada Power stresses that 

these projects are mandatory if Nevada Power is to own and operate Sun-Peak. (ld.) Nevada 

Power states that these investments were not required to have been completed by the current 

owner because the facility operated under a finite contract term and under a business model 

different from Nevada Power's. (ld. at 4.) 

151. Nevada Power agrees with Staff's point that the building enclosure project should 

not be accounted for as part of the acquisition cost because it is not necessary for integration of 

the facility. (Ex. 93 at 14.) Nevada Power states that it intends to establish in a future ratemaking 

proceeding that the actual costs of the projects were just and reasonable and that it realizes that 

the integration project costs presented are just estimates. (Jd. at 14-15.) Finally, Nevada Power 

contends that the LV Cogen 1, LV Cogen 2, and Sun-Peak upgrade projects that, which develop 

uniform conditions across the Company's centralized generation fleet, should receive the 

regulatory treatment described in NRS 704.7317. (ld. at 15.) 

152. Nevada Power disagrees with Staff's recommendation to reject $1.9 million in 

permitting costs for new solar generating capacity. (Ex. 82 at 7.) While Nevada Power agrees 

with Staff that new solar generating capacity is not needed to comply with Nevada's RPS, 

Nevada Power notes that the sites procured by Nevada Power could be used to attract a larger 
Docket Nos. 14-05003 & 14-06022 Page 64 

pool of bidders for the three 100 MW RFPs if Nevada Power can offer bidders a permitted site 

for their projects. (!d. at 7-8.) Nevada Power also notes that, alternatively, the permitted site 

would be available for the 35 MW of company-owned renewable nameplate capacity. (/d. at 9.) 

153. With regard to the accounting treatment of the permitting costs, Nevada Power 

explains that it is merely seeking a prior determination that it is reasonable to spend $1.9 million 

in the 2015 period as set forth in Table AP-4, Exhibit 2 at page 24. (Transcript at 601.) Nevada 

Power further represents that such costs would be deferred into either a construction work in 

progress or a study cost account and will ultimately receive enhanced ratemaking treatment only 

if the permitted site turns into an ERCR project. (Tr. at 601-02.) 

154. Nevada Power disagrees with Staff's recommendation to order the Company to 

conduct a study of appropriate planning capacity value for solar PV facilities. (Ex. 93 at 15-16.) 

While Nevada Power does not disagree with the direction of the study, it disagrees with the 

timing and method of the proposal. (!d. at 16.) Nevada Power contends that the study 

submission date of early 2015 does not provide enough time to properly examine the issue and 

that the development of a common understanding of the analytical approach that will be used and 

the scope of the study should precede the commencement of the study. (!d.) 

155. In response to Staff's recommendation to find that the NERA report does not 

provide reliable economic analysis, and also addressing BCP's criticism of Nevada Power's 

economic analysis, Nevada Power claims that the NERA report provides sufficient information 

to assist the Commission in determining whether to accept the Preferred Plan. (Ex. 93 at 19.) 

Nevada Power argues that discrepancies between the data analyzed by NERA and the data in the 

filing do not render the NERA report unreliable, but rather affect the evidentiary weight of the 

report. (!d. at 19-20.) Nevada Power claims that, even though NERA has not performed its 
Docket Nos. 14-05003 & 14-06022 Page 65 

environmental cost and economic impact analyses using the final information, NERA's estimates 

of total environmental costs and total economic impacts would probably change only by small 

amounts from switching to the final information. (Ex. 44 at 3-5.) Nevertheless, Nevada Power 

acknowledges that determining changes in case rankings in terms of environmental costs and 

economic impacts would not be possible without redoing the analyses because (1) the differences 

between the preliminary and final information are numerous and span a wide range in size, (2) 

the changes offset one another in various ways, and (3) the net economic impacts depend on the 

interplay between expenditures and revenue requirements. (I d. at 6-7.) 

Commission Discussion and Findings 

156. NRS 704.7316 requires Nevada Power to file with the Commission, as part of its 

plan submitted pursuant to NRS 704.741, "a comprehensive plan for the reduction of emissions 

from coal-fired electric generating plants and the replacement of the capacity of such plants with 

increased capacity from renewable energy facilities and other electric generating plants." 

157. The emission reduction component of Nevada Power's ERCR Plan must provide 

for the retirement of "not less than 300 megawatts of coal-fired electric generating capacity on or 

before December 31, 2014;" "not less than 250 megawatts of coal-fired electric generating 

capacity on or before December 31, 2017;" and "not less than 250 megawatts of coal-fired 

electric generating capacity on or before December 31, 2019." (NRS 704.7316(2)(a)(l)-(3), 

respectively). 

158. The capacity replacement component of Nevada Power's ERCR Plan must 

provide "[f]or the construction or acquisition of, or contracting for, 350 megawatts of electric 

generating capacity from renewable energy facilities," (NRS 704.7316(2)(b)), through a staged 

RFP process, specifically, staged and conducted as follows: 
Docket Nos. 14-05003 & 14-06022 Page 66 

(1) Issue a request for proposals for 100 megawatts of electric generating 

capacity from new renewable energy facilities on or before December 31, 2014; 

(2) In addition to the request for proposals issued pursuant to subparagraph (1), 

issue a request for proposals for 100 megawatts of electric generating capacity 

from new renewable energy facilities on or before December 31, 2015; 

(3) In addition to the requests for proposals issued pursuant to subparagraphs (1) 

and (2), issue a request for proposals for 100 megawatts of electric generating 

capacity from new renewable energy facilities on or before December 31, 2016; 

(4) Review each proposal received pursuant to subparagraphs (1), (2) and (3) and 

identify those renewable energy facilities that will provide: 

(I) The greatest economic benefit to this State; 

(II) The greatest opportunity for the creation of new jobs in this State; and 

(III) The best value to customers of the electric utility; 

(5) Negotiate, in good faith, to construct, acquire or contract with the renewable 

energy facilities identified pursuant to subparagraph (4), and file with the 

Commission an amendment to the plan each time the utility wishes to construct, 

acquire or contract with such facilities; and 

( 6) Begin, on or before December 31, 2017, the construction or acquisition of a 

portion of new renewable energy facilities with a generating capacity of 50 

megawatts to be owned and operated by the electric utility, and complete 

construction of such facilities on or before December 31, 2021. 

~ For the purposes of this paragraph, the generating capacity of a renewable 

energy facility must be determined by the nameplate capacity of the facility. 

(NRS 704.7316(2)(b)(l)-(6).) 

159. Moreover, the capacity replacement component of Nevada Power's ERCR Plan 

must provide for Nevada Power "to construct or acquire and own electric generating plants with 

an electric generating capacity of 550 MW, which must be constructed or acquired to replace, in 

an orderly and structured manner, the coal-fired electric generating capacity retired or eliminated 

pursuant to [NRS 704.7316(2)(a)]." (NRS 704.7316(2)(c).) Nevada Power's ERCR Plan may 

also include "additional utility facilities, electric generating plants, elements or programs 

necessary to carry out the plan." (NRS 704.7316(3).) 

160. NRS 704.746(8) requires that the Commission" ... after a hearing, review and 

accept or modify an emissions reduction and capacity replacement plan which includes each 

element required by NRS 704.7316." Under NRS 704.746(8), the Commission shall consider 
Docket Nos. 14-05003 & 14-06022 Page 67 

each of the following in determining whether to accept or modify an emissions reduction and 

capacity replacement plan: 

(a) The cost to the customers of the electric utility to implement the plan; 

(b) Whether the plan provides the greatest economic benefit to this State; 

(c) Whether the plan provides the greatest opportunities for the creation of new 

jobs in this State; and 

(d) Whether the plan represents the best value to the customers of the electric 

utility. 

161. NAC 704.9453 outlines the information and action items that must be included in 

an ERCR filing. One such requirement is the electric utility's proposal of an RFP process "that 

will be used to provide for a comparative analysis of the alternatives available for the 550 

megawatts of electric generating capacity to be constructed or acquired and owned by the utility 

pursuant to [NRS 704.7316(2)(c)]." (NAC 704.9453(8).) Specifically, NAC 704.9453(8) 

requires that the electric utility's proposed RFP process provide: (a) a timeline for the issuance of 

requests for proposals and the evaluations of proposals; (b) a clear definition of the product or 

products sought in the request for proposals process; and (c) evaluation criteria, including, 

without limitation, bidder and resource criteria that is consistent with the considerations to be 

assessed pursuant to NRS 704.746(8). (NAC 704.9453(8)(a)-(c).) 

162. Nevada Power omits the foregoing RFP process from its ERCR Plan, instead 

seeking deviation from NAC 704.9453(8) because the "opportunistic acquisitions of [the three 

facilities identified in Nevada Power's ERCR Plan] would not benefit from the information that 

would result from the request for proposals process described in [NAC 704.9453(8)]." (Ex. 2 at 

16.) Specifically, Nevada Power asserts that "the opportunistic acquisitions set forth in the 

ERCR Plan, the beneficiaries of which are the customers of Nevada Power, would likely have 

not been available if, instead of pursuing negotiations with the owners of these projects in time to 
Docket Nos. 14-05003 & 14-06022 Page 68 

include these projects in this ERCR Plan, Nevada Power had merely developed and proposed the 

request for proposals process described in [NAC 704.9453(8)]." (Id.) 

163. Under NAC 704.0097, the Commission may permit deviation from its regulations 

if: (1) good cause appears for the deviation; (2) the person requesting the deviation provides a 

specific reference to each provision from which the deviation is requested; and (3) the 

Commission finds that the deviation is in the public interest and is not contrary to statute. 

164. In analyzing Nevada Power's ERCR plan, the Commission must address the 

emission reduction component of Nevada Power's ERCR Plan in relation to a corresponding 

capacity replacement component that is provided in the Plan. Specifically, NRS 704.751(6) 

requires that "[a]ny order issued by the Commission accepting an element of an emissions 

reduction and capacity replacement plan must include provisions authorizing the electric utility 

to construct or acquire and own electric generating plants necessary to meet the capacity amounts 

approved in, and carry out the provisions of, the plan." Accordingly, by approving an emission 

reduction, the Commission must also approve a corresponding capacity replacement that 

provides the same amount of capacity as the retired or eliminated capacity, but the corresponding 

replacement capacity must be replaced in an "orderly and structured manner" as prescribed by 

NRS 704.7316(2)(c). 

165. Each of the foregoing rules and regulations must be given due effect, as any 

inconsistency or ambiguity among the individual statutes and/or regulations would eliminate the 

ability of the Commission to act consistently under its jurisdiction. In other words, effect must 

be given to each statute and regulation developed in response to SB 123 in order to harmonize 

the entire statutory and regulatory scheme that the Legislature has provided to the Commission. 

Therefore, the Commission rejects the premise asserted by the Company that its Preferred Plan 
Docket Nos. 14-05003 & 14-06022 Page 69 

should be reviewed in its entirety and judged without reference to its individual parts. Such an 

interpretation prevents the Commission from carrying out its statutory duty to analyze whether 

the components of Nevada Power's ERCR Plan satisfy the considerations outlined under NRS 

704.746(8) and prevents the Commission from approving a plan that permits Nevada Power to 

replace its retired or eliminated capacity in an "orderly and structured manner" as prescribed by 

NRS 704. 7316(2)( c). Nevada Power's interpretation of the statutory scheme adopted in response 

to SB 123 circumvents the Commission's authority to review and approve or modify a plan to 

ensure that it is in the public interest. In other words, it limits the ability of the Commission to 

reject portions of a plan that, standing on their own, would be considered imprudent. Such an 

interpretation contravenes NRS 704.7321 by restricting, if not eliminating, the Commission's 

ability to modify an ERCR plan, thereby severely undermining the Commission's duty and 

authority under NRS 704.746(8) to consider customer costs, economic benefit to the State, 

greatest opportunity for job creation, and best customer value. Such a result is not in the public 

interest. 

166. Accordingly, the Commission reviews the capacity replacement component of 

Nevada Power's ERCR Plan, which has been identified as the Preferred Plan or Case C, as it 

corresponds with the emission reduction component of Nevada Power's ERCR Plan approved by 

the Commission in paragraph 49 of this Order. In assessing the merits of each proposed 

acquisition enumerated in Nevada Power's ERCR Plan, the Commission harmonizes the 

considerations outlined in NRS 704.746(8) and NRS 704.7316(2)(c) and considers the public 

interest in determining whether deviation from NAC 704.9453(8) is warranted for each 

component of the 550 MW of utility-owned replacement capacity. 

Ill 
Docket Nos. 14-05003 & 14-06022 Page 70 

LV Cogen 1 and 2 and Sun-Peak 

167. In its Preferred Plan, Nevada Power proposes to acquire LV Cogen 1 and 2 and 

Sun-Peak, rather than proposing an RFP process that could be used to provide for a comparative 

analysis of the alternatives available for the replacement electric generating capacity. In seeking 

deviation from the requirement that it propose an RFP process for this replacement capacity, 

Nevada Power states that deviation from NAC 704.9453(8) is warranted because of the 

"opportunistic" nature of these acquisitions. (Ex. 2 at 16.) The Commission agrees; good cause 

exists to circumvent the prescribed RFP process in favor of acquiring these relatively 

inexpensive electric generating units. The Company contends, and Staff and BCP both agree, 

that these units represent good value for customers when considering the cost of acquiring these 

resources compared to the costs of new peaking or combined cycle resources. 

168. Specifically, the Commission agrees with BCP that: (1) "[b]oth facilities are 

located within the load pocket of the Las Vegas Valley which under Nevada Power ownership 

assures an ongoing commitment to Nevada loads in lieu of the retirement of the Reid Gardner 

coal units of 550 MW electrically within the Las Vegas Valley load pocket;" (2) "the location 

within the load center provides a unique value to the system versus resources located outside;" 

(3) "[t]hese acquisitions at prices noted earn high marks in regard to cost to customers and offers 

value benefits of being located in the load pocket;" and ( 4) "the acquisition of the Las Vegas 

Cogen facility assures the sustainability of approximately 25 jobs through 2036." (Ex. 66 at 7.) 

169. Moreover, the Commission agrees with Staff that "[t]hese three generating 

resources have been reliably serving Nevada Power's load for more than 12 years," and that 

"they provide very unique attributes that would be difficult to replace if Nevada Power were to 

look to capacity from other generations options." (Ex. 79 at 30.) The Commission is persuaded 
Docket Nos. 14-05003 & 14-06022 Page 71 

by Staff's opinion that "Nevada Power appears to have performed a reasonable due diligence 

review on these resources," and that "Staff sees benefits in having these resources remain a part 

of Nevada Power's generating fleet going forward." (!d.) 

170. The Commission further agrees with Staff that "the capacity acquisition cost of 

these resources, $477 per kW for the LV Co-Gen bundle and $71 per kW for Sun-Peak are 

attractive when compared to the current cost of constructing new combined cycle and peaking 

capacity." (!d.) Staff states that under Nevada Power's Alternate Plan, Case A, Nevada Power 

"assumed the new overnight cost of a combined cycle unit added in 2018 to be $699 million." 

(!d. at 19.) Indeed, based on the evidence in this Docket, the dollar per kW for LV Cogen 1 and 

2 and Sun-Peak should be considered a competitive price because it is significantly less than the 

cost of a new combined cycle unit. The Commission's analysis yields estimated capital costs of 

approximately $1,170 per kW for a new combined cycle resource and $1,100 per KW for new 

peaking resources. (See generally Exhibit 11 and Exhibit 4.) Therefore, the acquisition of LV 

Cogen 1 and 2 and Sun-Peak should be considered good value for Nevada Power customers. 

171. Based on the evidence in this Docket, the Commission grants Nevada Power's 

request to deviate from NAC 704.9453(8) because the Commission agrees that the 

"opportunistic" nature of these acquisitions warrants deviation from the prescribed RFP process. 

Specifically, the Commission finds that good cause exists for deviation from the RFP process 

regarding the replacement capacity that would be fulfilled by these three facilitates because of 

the low cost of these acquisitions relative to the high cost for construction of similar replacement 

capacity units. The Commission further finds that deviation in this instance is in the public 

interest and not contrary to statute given that the acquisition of these three facilities harmonizes 

the considerations outlined in NRS 704.746(8) by providing Nevada Power customers with 
Docket Nos. 14-05003 & 14-06022 

replacement capacity at good value without disrupting the orderly and structured process 

prescribed by NRS 704.7316(2)(c). 

Page 72 

172. Consistent with the foregoing findings, the Commission approves Nevada 

Power's request to acquire LV Cogen units 1 and 2, and the Sun-Peak facility. The Commission 

finds the costs of these facilities reasonable when compared to the current cost of constructing 

new combined cycle and peaking capacity units, and notes that all parties supported, or at least 

did not oppose, the acquisition of these three replacement units. Therefore, given the evidence 

on this record, the Commission agrees with Nevada Power that the proposed price for LV Cogen 

1 and 2 and Sun-Peak are "extremely favorable for customers" 13 and fulfills the requirements of 

NRS 704.746(8). 

Moapa Project 

173. By the Commission accepting Nevada Power's proposal to acquire LV Cogen 

units 1 and 2, and the Sun-Peak facility, acquisitions that represent a total replacement capacity 

of 496 MW, Nevada Power is statutorily authorized to own, construct and/or acquire an 

additional 54 MW of electric generating capacity to complete its 550-MW entitlement. The 

Commission recognizes that, if it authorizes Nevada Power to retire 800 MW of coal generation, 

it must then approve a plan for Nevada Power to construct, acquire, or contract for 800 MW of 

replacement capacity. As it currently stands, the emissions reduction portion of this plan 

approves the retirement of 812 MW of capacity between today's date and 2019. Nevada Power's 

Preferred Plan proposes that the 812 MW be replaced as follows: (1) 224 MW from LV Cogen 2 

on January 1, 2015; (2) 222 MW from Sun Peak on June 1, 2016; (3) 76 MW from Moapa Solar 

on October 1, 2016; (4) 50 MW from LV Cogen 1 on October 1, 2016; (5) 15 MW from the 

13 Exhibit 2 at 14. 
Docket Nos. 14-05003 & 14-06022 Page 73 

Nellis Project (discussed below) by December 31, 2015; and (6) through the issuance of RFPs 

for 100 MW of renewable energy in 2014, 100 MW of renewable energy in 2015, and 100 MW 

of renewable energy in 2016. The total capacity yielded from these totals is approximately 887 

MW. 

174. Based upon these numbers, Nevada Power's proposal requests that the 

Commission allow Nevada Power to over-fill the 550-MW "Non-Technology Specific" 

replacement capacity bucket. Specifically, Table S-2 in Nevada Power's Summary of its ERCR 

Plan, designated as Exhibit 3 in this Docket, shows that, if the Moapa Project was approved in 

conjunction with Nevada Power's acquisition of LV Cogen 1 and 2 and Sun-Peak, the total MW 

capacity that Nevada Power would be obtaining exceeds 550 MW, as the four projects total 572 

MW of replacement capacity, or 22 MW more than the replacement capacity contemplated by 

NRS 704.7316(2)(c). (Ex. 3 at 4.) While the Commission acknowledges that its regulations 

allow Nevada Power to provide a "reasonable description of the electric generating plant or 

plants with a total generating capacity of approximately 550 megawatts that the utility proposes 

to construct or acquire and own" under its Preferred Plan in its ERCR Plan (NAC 704.9453(4)(a) 

(emphasis added)), the Commission, in adopting NAC 704.9453(4)(a), did not intend that this 

provision allow the utility to stretch the term "approximately" to cover a 22-MW overage. 

Certainly, the Commission did not contemplate that Nevada Power would use the latitude 

afforded by NAC 704.9453(4)(a) to propose a replacement facility that would unnecessarily, and 

contrarily to its entitlement under NRS 704.7316(2)(c), cost ratepayers upwards of $126 

million. 14 

14 The Commission presumes that the overage amount would come from the highest-cost resource. 
Docket Nos. 14-05003 & 14-06022 Page 74 

175. Moreover, Nevada Power's assertion that the Moapa Project is well-positioned to 

allow the Company to take advantage of the lTC is much less persuasive when considering the 

BCP's and SNHG's concerns that the utility would be required to take the 30 percent lTC over 

the life of the facility, while an independent power producer could utilize the entire credit up 

front in the first year. (Ex. 54 at 18.) According to the BCP, " ... the [lTC] of 30 percent can be 

taken all in the first year under non-utility structure versus over the book life of the project under 

a utility structure." (Ex. 66 at 18.) More specifically, BCP states that if Nevada Power could 

receive the whole lTC in the first year similar to an independent power producer under a nonutility structure, ratepayers could save approximately 20 percent. (!d.) Therefore, it follows that 

Nevada Power's proposal to obtain the Moapa Project under a utility-build and ownership model 

is 20 percent more expensive than if the same project was developed by an independent power 

producer. 

176. The Commission shares Staff's concerns regarding the high costs of the land lease 

for the Moapa project. After reviewing the confidential data regarding the lease payment for the 

Moapa Project, the Commission has concerns that the lease payment is excessive, but cannot 

determine the extent to which the lease payment may be excessive because the Moapa Project 

was not compared to other projects, a comparative process that would have occurred had Nevada 

Power proposed an RFP process rather than seeking deviation from NAC 704.9453(8) for this 

portion of its ERCR Plan. 

177. The Moapa Project's $50.2 million increase to Nevada Power's revenue 

requirement in 2017 may have a significant effect on the creation of jobs in Nevada. Nevada 

Power's customers, including nearly every employer in Nevada Power's service territory, 

already pay some of the highest electric rates in the region. (Ex. 54 at 15-16.) However, the 
Docket Nos. 14-05003 & 14-06022 Page 75 

Moapa Project's 640 job-years represents only the positive effect on jobs. The immediate impact 

to jobs in Nevada for 2016 is a loss of 292 jobs. Even at the end of the 20-year planning period, 

the jobs lost are 12 in 2027. (Ex. 64 at 8.) The Moapa Project's effect on job-growth is 

inconclusive. 

178. The Moapa Project does not provide much value for Nevada Power's customers 

in meeting the RPS. Even without the Moapa Project, Nevada Power will have excess RPS 

credits through 2027. (Ex. 12 at 232; Ex. 53 at 17; Ex. 73 at 8.) 

179. While the fuel-free Moapa Project mitigates Nevada Power's customers' exposure 

to the risk of natural gas volatility, the Moapa Project is not unique in this regard and would result 

in only a slightly larger portion of Nevada Power's generation portfolio, both energy and 

capacity, not being dependent on natural gas in 2018. (Ex. 93 at 29-30; Tr. at 605-606.) The 110-

MW Crescent Dunes Solar Energy Project is scheduled to come on-line in late 2014, and the 

ERCR Plan's 15-MW Nellis Solar Array II is scheduled to come on-line by December 31,2016. 15 

Further, as mandated by NRS 704.7316(2)(b)(1-3), RFPs for 300 MW of renewable electric 

generating capacity will be issued on or before December 31, 2016. All of these other projects 

will mitigate Nevada Power's customers' exposure to the risk of natural gas volatility. 

180. Additionally, the Commission is concerned with whether the Moapa Project, to be 

situated on tribal land, counts towards the State's compliance with the EPA's 111(d) Draft 

Regulations. The record in this Docket regarding whether the Moapa Project would count 

toward compliance with EPA's proposal is nebulous and inundated with speculation, considering 

the fact that EPA's proposal does not address carbon emissions of existing generating units on 

tribal lands and the fact that the 111 (d) Draft Regulations have yet to be finalized and will be 

15 Pursuant to NRS 704.7316(2)(b)(6), Nevada Power will be authorized to construct or acquire an additional35 

MW s of electric generating capacity from new renewable energy facilities by December 31, 2021. 
Docket Nos. 14-05003 & 14-06022 Page 76 

subject to judicial review. In short, any proposed renewable project not on tribal land seemingly 

has more value than the Moapa Project for purposes of compliance with the Ill (d) Draft 

Regulations. In their current form, Nevada Power acknowledges that there is a risk that the 

Moapa Project does not meet the proposed lll(d) requirements, but believes the risk to be small, 

and states that it is willing to share this risk with its customers. (ld. at 585.) However, the 

Commission's concerns regarding the Moapa Project's compliance with the lll(d) Draft 

Regulations are not assuaged by a shared risk between the utility and its customers, especially 

given that the Moapa Project may be an unnecessary risk in the first place. Additionally, the 

Commission is required to not only protect the interests of Nevada Power's customers, but it is 

charged with protecting the interests of Nevada Power's shareholders, as well. Accordingly, 

while Nevada Power may be willing to take a risk with the Moapa Project, the Commission will 

not subject Nevada Power's shareholders or customers to unnecessary risk. 

181. Moreover, given the timing of the Commission's review of the Plan, the value of 

the Moapa Project cannot be compared to the values of other renewable projects. The 

Commission does not know the current market price of solar PV power or any other renewable 

power (solar thermal, geothermal, wind, biomass, etc.) in this State. Prior to this proceeding, the 

Commission's last review of a new renewable project for Nevada Power occurred in 2011 

(Docket No. 11-03014). 16 The market price for renewable power will be more established just 

three months from now when the bids for the first 100 MW of competitively bid power are 

opened in January 2015. The RFP is open to all resources and will presumably serve as the 

forum for comparing costs and other factors (i.e. dispatchability, load characteristics, location, 

16 In Docket No. 13-11007, the Commission reviewed a geothermal PPA for Nevada Power that replaced a PPA 

approved in Docket No. 11-03014. The power and credits from the McGinness Hills geothermal generating facility 

were substituted for the already-approved Dixie Meadows site and included a $2.6 million termination payment for 

the benefit of ratepayers. 
Docket Nos. 14-05003 & 14-06022 Page 77 

etc.) of the various proposals. Following the RFP, the Commission will have a basis for 

comparison of a company-owned solar PV project to various renewable power projects owned 

by independent power producers. 17 Implementing the ERCR Plan with the inclusion of the 

Moapa Project does not appear to represent the best value to Nevada Power's customers because 

the Moapa Project's value to Nevada Power's customers is seemingly negligible. 

182. Therefore, under these facts and circumstances, the evidence on this record does 

not enable the Commission to adequately review the Moapa Project under the four 

considerations outlined in NRS 704.746(8). That is, it is inconclusive as to whether the Moapa 

Project's cost to Nevada Power's customers to implement the plan is reasonable; whether the 

project provides the greatest economic benefit to the State; whether the project provides the 

greatest opportunity for the creation of new jobs in this State; and whether the project represents 

the best value to Nevada Power customers. If a finding must be made at this time given the 

concerns and considerations discussed herein, the Moapa Project must be found to fail to meet 

the standards outlined in NRS 704.746(8). 

183. However, as discussed earlier, the Commission recognizes that if it authorizes 

Nevada Power to retire 800 MW of coal generation, it must then approve a plan for Nevada 

Power to construct, acquire or contract for 800 MW of replacement capacity. As it currently 

stands, the emissions reduction portion of this plan approves the retirement of 812 MW between 

today's date and 2019. Nevada Power's Preferred Plan proposes that the 812 MW be replaced as 

follows: (1) 224 MW from LV Cogen 2 on January 1, 2015; (2) 222 MW from Sun Peak on June 

17 While Nevada Power stated that a direct comparison of the Moapa Project lease to a prospective BLM lease is not 

possible, Staff provided information demonstrating additional annual costs for the Moapa Project lease on tribal land 

compared to annual costs for a prospective lease on BLM land. (Ex. 75 at 6:9-25, Attachment AED-8.) Staff's 

comparison demonstrates that the lease agreement and acquisition premium for the Moapa Project appear to be 

expensive. (Ex. 79 at 9:5-11.) 
Docket Nos. 14-05003 & 14-06022 Page 78 

1, 2016; (3) 76 MW from Moapa Solar on October 1, 2016; (4) 50 MW from LV Cogen 1 on 

October 1, 2016; (5) 15 MW from the Nellis Project (discussed below) on by December 31, 

2015; and (6) through the issuance of RFPs for 100 MW in 2014, 100 MW in 2015, and 100 

MW in 2016. The total capacity yielded from these totals is approximately 887 MW. 

184. In order to grant Nevada Power deviation from NAC 704.9453(8) to bypass the 

RFP process to construct and acquire the Moapa Project, the Commission must find that, based 

on the evidence provided in this Docket, good cause exists to authorize Nevada Power to spend a 

significant premium for 76 MW of planning capacity. Moreover, not only must the Commission 

find that good cause exists to approve this component of Nevada Power's Plan, the Commission 

must find that by not requiring Nevada Power to propose an RFP process (that would seemingly 

address all of the Commission's concerns regarding the Moapa Project), the Commission is 

acting in the public interest and consistent with statute. 

185. Therefore, the Commission denies Nevada Power's request to deviate from NAC 

704.9453(8) regarding the 54-MW vacancy that would have been satisfied by the Moapa Project 

under Nevada Power's ERCR Plan because approval of the Moapa Project to fulfill this vacancy 

is not in the public interest given the Commission's substantial aforementioned concerns. 

Moreover, Nevada Power has failed to show that good cause for deviation exists, as the 

Commission finds that the evidence provided in this Docket does not show that deviation 

regarding the project would be in the public interest. Finally, considering that the Commission 

acknowledges that the project fails to meet the standards outlined under NRS 704.746(8), a 

Commission finding that Nevada Power may deviate from NAC 704.9453(8) regarding these 54 

MW would be contrary to statute. Accordingly, in denying Nevada Power's request to deviate 
Docket Nos. 14-05003 & 14-06022 Page 79 

from NAC 704.9453(8) regarding these (approximately) 54 MW, the Commission deems this 

portion of Nevada Power's ERCR Plan inadequate. 

186. However, recognizing that it must provide Nevada Power with the authority to 

construct, acquire, and/or own sufficient generating capacity necessary to meet the provisions of 

NRS 704.751(6) and 704.7316(2)(c), the Commission, to fulfill the 54-MW vacancy that would 

have been satisfied by the Moapa Project, orders Nevada Power to file, by January 1, 2015, an 

RFP process pursuant to NAC 704.9453(8) or, alternatively, an amended plan seeking approval 

of a specific project that satisfies a request for deviation under NAC 704.0097 and allows the 

Commission to adequately assess the proposed project under considerations listed in NRS 

704.746(8). The Commission finds that these directives provide Nevada Power with the 

necessary authority to acquire plant necessary to meet the provisions of its Plan. 

187. This result is consistent with the Legislature's charge to this Commission to not 

only allow the utility to replace its coal-fired generation fleet with similar capacity, natural gas, 

and/or renewable energy generating facilities, but its charge to ensure that ratepayers are 

insulated from unnecessarily high costs associated with such replacement, that Nevada Power 

customers benefit from a project that represents the best value available to them, and that any 

emission reduction and capacity replacement plan proposed by the utility provides the greatest 

economic benefit and chance for job growth in this State. 

Nellis Project 

188. The Commission agrees with Staff that the Nellis Solar Project "provides some 

unique benefits that outweigh the high cost of the project. .. " (Ex. 79 at 30.) Specifically, the 

Commission agrees with Staff's position that: (1) the Nellis Solar Project will allow Nevada 

Power to keep Nellis AFB as a full retail requirements customer, allowing Nevada Power to 
Docket Nos. 14-05003 & 14-06022 Page 80 

avoid "a potential departure of a large load customers;" (2) the project is eligible for the 2.4 

portfolio credit multiplier contained in NRS 704.7822 because it can be constructed before 

December 31, 2015; (3) the project will be electrically located within the Las Vegas valley load 

pocket, providing certain reliability benefits; and (4) the project benefits from being eligible for 

the 30 percent ITC because it can be constructed before December 31,2016. (!d. at 31.) 

Therefore, for all the foregoing reasons, the Commission approves Nevada Power's request in its 

ERCR Plan to construct the Nellis Project. 

Renewable RFPs 

189. The Commission approves Nevada Power's request to issue three 100-MW RFPs 

for renewable resources based on the schedule set forth in the ERCR Plan. The issues raised by 

Ormat have or will be addressed in Docket No. 13-06023, the rulemaking resulting from SB 123. 

Siting Activities 

190. The Commission approves Nevada Power's request to spend $1.9 million on 

initial siting activities related to one or more proposed solar PV generating facilities northeast of 

Las Vegas. Nevada Power acknowledges and the Commission agrees that these costs would be 

deferred into either a construction work in progress or a study cost account and will ultimately 

receive enhanced ratemaking treatment only if the permitted site turns into an ERCR project. 

The Commission finds this expense is reasonable because it could be used to attract a larger pool 

of bidders for the three 1 00-MW RFPs if Nevada Power can offer bidders a permitted site for 

their projects, resulting in lower-cost projects. 

Ill 

Ill 

Ill 
Docket Nos. 14-05003 & 14-06022 Page 81 

Renewable Expansion Plan 

191. The Commission approves Nevada Power's Renewable Expansion Plan as set 

forth in Section 2.D of the Supply Side Plan and finds that the Renewable Expansion Plan is a 

reasonable method to comply with the portfolio standard throughout the 30-year planning period. 

Incenti vized Accounting Treatment 

192. Nevada Power is only eligible to receive incentivized accounting treatment 

pursuant to NRS 704.7317 on the initial construction costs and/or acquisition price for the 

generating facilities approved in this Order and costs associated with upgrades to the facilities 

that are required by state or federal law. This incentivized accounting treatment does not apply 

to any capital upgrades, additions made after the acquisition date, or costs incurred after 

construction of a new generating plant is completed and the plant is placed into service. All 

costs will be subject to a review of reasonableness in a general rate application. 

VI. SECOND AMENDMENT TO THE 2013-2032 IRP 

A. Background 

193. In Docket No. 14-06022, Nevada Power seeks approval of the Second 

Amendment to its 2013-2032 IRP, which includes the request for approval of the Harry Allen 

Transformer. However, the information in support of this Application is included in Docket No. 

14-05003. Nevada Power is not seeking to include the Harry Allen Transformer in the 

regulatory asset to be established for projects included in the ERCR Plan. Additionally, Nevada 

Power requests deviation from NAC 704.9516 (the regulation governing contents of action plan 

amendments) and seeks to consolidate these Dockets to synchronize the timing of the ERCR 

Plan (180 days) and an amendment to an IRP (135 days). 

Ill 
Docket Nos. 14-05003 & 14-06022 Page 82 

B. Harry Allen Transformer 

Nevada Power 

194. Nevada Power seeks approval of the installation of a 500kV/230kV 

autotransformer at the Harry Allen substation. Nevada Power contends that this project will 

provide it with needed additional capacity to transfer energy from its 500 kV transmission 

system onto the 230 kV transmission system and into or through the Las Vegas Valley load 

pocket. (Ex. 52 at 3.) 

195. Nevada Power explains that the planning studies that were prepared for Docket 

Nos. 11-08011 and 12-06053 demonstrated that under the then-current load forecast and 

topology, there was limited ability to bring bulk energy onto the 230 kV system and into and 

through the Las Vegas Valley. While the studies indicated that the addition of the Harry Allen 

Transformer was the preferred solution, Nevada Power did not seek Commission approval and, 

instead, sought approval to implement a series of operating procedures that would delay the need 

for the project. (ld. at 4.) The procedures included the use of the Crystal phase shift transformer 

("Crystal PST"), a Lenzie generation tripping remedial action scheme ("Lenzie Generation 

RAS"), and there-dispatch of generation. (ld.) 

196. Nevada Power contends that it can no longer rely on these operating procedures 

due to the requirements of SB 123 to retire a total of 557 MW of generation on the 230 kV 

system that includes retirement of the Reid Gardner units 1-3 by the end of 2014 and retirement 

of the Reid Gardner unit 4 by the end of 2017. The retirement of these facilities necessitates that 

Nevada Power replace that capacity and address the impacts and potential constraints on the 

transmission system facilities. (/d. at 5.) 
Docket Nos. 14-05003 & 14-06022 Page 83 

197. Nevada Power acknowledges that it can serve load after the retirement of the Reid 

Gardner facilities without the Harry Allen Transformer, but notes that it will require the redispatching of the system out of the economic dispatch order. Nevada Power contends that as a 

result of the retirement of the Reid Gardner facilities, it is more economical to install the Harry 

Allen Transformer than to operate in this mode. (/d. at 6.) 

198. Nevada Power states that the project cost of the Harry Allen Transformer is $40.2 

million and that the savings associated with optimizing system dispatch, reducing losses, and 

avoiding capacity costs yield a net PWRR savings of $14.2 million. (/d. at 7-8.) 

199. Nevada Power states that two Transmission Service Agreements ("TSAs") 

pending before FERC have identified the Harry Allen Transformer as a required network 

upgrade to provide the requested service. These transmission customers could purchase up to 

327 MW of point-to-point transmission service valued at $14 million per year under the current 

tariff. These revenues were not included in the benefit calculation. (/d. at 8.) 

200. Nevada Power requests deviation from NAC 704.9516, which prescribes the 

information that should be included in a typical IRP amendment. Nevada Power explains that 

the information that justifies approval of this Application was provided in Docket No. 14-05003. 

The reason Nevada Power filed this Application separately is because it is not seeking the special 

regulatory asset treatment associated with the ERCR Plan and to reconcile the timelines for 

Commission approval. The Commission has 180 days to issue an order on an IRP amendment 

associated with an ERCR plan but only 135 days to issue an order addressing a non-ERCR Plan 

IRP amendment. (Ex. 31 at 2-3.) 

201. Nevada Power states that NAC 704.0097 allows for the deviation of any provision 

of NAC 704 if: 1) good cause for the deviation appears; 2) the person requesting the deviation 
Docket Nos. 14-05003 & 14-06022 Page 84 

provides a specific reference to each provision of the chapter from which deviation is requested; 

and 3) the Commission finds that the deviation is in the public interest and not contrary to 

statute. Nevada Power contends that the approach taken in Docket No. 14-06022 represents the 

most administratively efficient and resource-conserving means of accomplishing the goal of 

allowing 180 days for consideration of the Application. (ld. at 2-3.) 

BCP 

202. BCP states that it does not oppose Nevada Power's request for approval of the 

Harry Allen Transformer to be placed in-service in 2016. (Ex. 66 at 21.) 

Ormat 

203. Ormat recommends that the Commission approve the Harry Allen Transformer. 

Ormat contends that the new transformer is cost-effective because the analysis shows that the 

PWRR savings is expected to be $14.2 million. (Ex. 61 at 7-8.) 

204. Ormat states that the Harry Allen transformer will increase deliveries on the 500 

kV system into the Harry Allen substation. Further, the new transformer would allow greater 

power flows from the northern part of the NV Energy system. This would enable renewable 

resources in northern Nevada to deliver power to Nevada Power, resulting in a diversity of 

renewable supply options as well as enabling the export of power to neighboring states and 

resulting in job creation, economic activity, and other benefits for Nevada. (/d. at 8.) 

Staff 

205. Staff recommends that the Commission reject Nevada Power's request for 

approval of the Harry Allen Transformer and that the project be deferred until at least 2018. (Ex. 

79 at 11; 61.) 
Docket Nos. 14-05003 & 14-06022 Page 85 

206. Staff contends that Nevada Power's cost-benefit analysis overstates the benefits 

associated with the project and that when the errors are corrected, the actual savings during the 

first two to three years following the installation are lower than the revenue requirement 

associated with the project. Accordingly, Staff asserts that the Harry Allen Transformer is not 

economically justified and should be delayed until at least June 1, 2018, when it becomes 

economically justified and/or necessary for reliability purposes due to the retirement of the Reid 

Gardner unit 4. (!d. at 54.) 

207. Staff states that while Nevada Power's cost-benefit analysis is reasonable in its 

rationale, it includes several simple assumptions that overstate the benefits of installing the 

project in 2016. The first assumption is the heat rate associated with the generation located on 

the 500 kV system that Nevada Power assumes will be curtailed during peak loading hours. 

Nevada Power assumes that all generation curtailed on the 500 kV system will be from the 

Lenzie units, which have the lowest heat rates on the 500 kV system. Staff contends that NPC's 

model should have curtailed the duct firing capacity connected to the 500 kV transmission 

system before the Lenzie generation because the duct firing capacity has a higher heat rate, is 

more expensive to operate, and, therefore, would be curtailed before the Lenzie generation. 

Consequently, Nevada Power's analysis overstates the energy savings of the first block of 

capacity that would be uneconomically re-dispatched during peak load hours. Staff asserts that 

this change causes Nevada Power's annual re-dispatch savings to drop by almost $1.9 million 

per year from what is presented in the filing. (!d. at 55.) 

208. Staff states that there are other problems with the cost-benefit analysis that 

overstate the benefits. These problems include the assumed heat rate for the Clark combined 

cycle units, the losses associated with using the Crystal PST, the assumption regarding the 
Docket Nos. 14-05003 & 14-06022 Page 86 

renewal of the LV Co-GenCogen contract, and the assumption regarding capacity on the ON 

Line. (/d. at 55-58.) 

209. Staff states that while there probably are reliability benefits associated with the 

Harry Allen Transformer, Nevada Power is not justifying the project based on such benefits. (/d. 

at 58.) 

210. Staff acknowledges that if the 300 MW Cargill TSA request is granted and Cargill 

has a resource instantaneously capable of utilizing the 300 MW of capacity, then this TSA would 

likely drive the need for the Harry Allen Transformer. However, until the TSA issue is resolved 

and approved by FERC, it is premature to rely on the TSA and its revenue stream to justify the 

2016 in-service date for the Harry Allen Transformer. (/d. at 59-60.) 

Nevada Power Rebuttal 

211. Nevada Power updates the cost-benefit analysis of the Harry Allen Transformer 

as a result of Staff's concerns and asserts that the revised analysis continues to support the 2016 

installation. Nevada Power notes that Staff's testimony has led to a more definitive explanation 

of included benefits and the removal of less certain or less quantifiable benefits. (Ex. 86 at 2.) 

212. Nevada Power revises its original cost estimate of $40.2 million to $33.6 million 

for the Harry Allen Transformer. Nevada Power asserts that this refinement reflects the benefits 

of being part of the Berkshire Hathaway Energy Company. (/d. at 3.) Nevada Power explains 

that Staff's use of $5.6 million (or any) first year revenue requirement overstates the actual 

benefit of delaying the in-service date for the Harry Allen transformer to June 2018. If the inservice date is delayed from 2016 to 2018, the revenue requirement in 2016 and 2017 will be 

lower. However, Nevada Power asserts that the benefit of the deferral is partially offset over the 

life of the project. Beginning in 2018, the annual revenue requirement will be higher than it 
Docket Nos. 14-05003 & 14-06022 Page 87 

would have been without the deferral for two reasons. First, the transformer with a 2018 inservice date has a higher initial cost due to escalation. Second, the transformer with a 2018 inservice date will not have the benefit of depreciation for 2016 and 2017. (!d. at 3-4.) 

213. Nevada Power asserts that on a present worth basis, a significant portion of the 

savings associated with the two-year delay in the in-service date is offset by higher costs in each 

subsequent year over the life of the transformer. The 2016 and 2017 net present value revenue 

requirement savings are less than the benefits of installing the Harry Allen Transformer in 2016. 

As such, customers save more money (approximately $2.4 million per year) from the installation 

of the Harry Allen Transformer in 2016 than they would save from a deferral to 2018. (!d. at 4-

5.) 

214. Nevada Power agrees with Staff's correction to the assumption regarding the 

curtailment of duct firing capacity in place of the Lenzie capacity. With this correction, the 

analysis shows that when the higher heat rate from the duct firing capacity is included, theredispatch costs are reduced from $5.81 million to $3.951 million in 2016, from $5.2 million to 

$3.246 million in 2017, and from $4.895 million to $3.163 million in 2018. (ld. at 7.) 

215. Nevada Power addresses the problems raised by Staff with respect to the assumed 

heat rate for the Clark combined cycle units, the losses associated with using the Crystal PST, the 

assumption regarding the renewal of the LV Cogen contract, and the assumption regarding 

capacity on the ON Line. (!d. at 5-10.) Even though it disagrees with Staff's position regarding 

the cost savings associated with these assumptions, Nevada Power does not include these cost 

savings in its final cost-benefit analysis. 

216. Nevada Power reasserts that the Harry Allen Transformer is economically 

justified without consideration of the reliability benefits associated with it. However, Nevada 
Docket Nos. 14-05003 & 14-06022 Page 88 

Power clarifies that under certain circumstances, the system would need to be operated in a 

suboptimal manner even though there would be no violation of NERC transmission planning 

standards. (ld. at 11-13.) 

217. Nevada Power states that the economic analysis of the Harry Allen Transformer is 

not based on the receipt of TSA revenues from Cargill. However, Nevada Power notes that 

under the terms of the NV Energy Open Access Transmission Tariff ("OATT"), Cargill can 

redirect its point of receipt if it executes a TSA and begins paying for transmission service prior 

to constructing the resource. (!d. at 13.) 

Commission Discussion and Findings 

218. The Commission approves Nevada Power's request to install the Harry Allen 

Transformer in 2016. By comparing the cost savings associated with a two-year delay as 

proposed by Staff with the updated estimated cost of $33.6 million and the reductions associated 

with adjusted curtailment savings, the analysis indicates that there is a greater benefit to retail 

customers with the installation of the Harry Allen Transformer in 2016. The PWRR savings 

with delaying the installation to 2018 results is $2.4 million per year for 2016 and 2017 whereas 

the adjusted curtailment savings associated with an in-service date of 2016 results in $3.95 

million for 2016 and $3.246 for 2017. The Commission is compelled by the reduced cost 

estimate provided by Nevada Power in its rebuttal testimony. 

219. The Commission finds that it is in the public interest and not contrary to statute to 

grant Nevada Power's request to deviate from NAC 704.9516. Nevada Power demonstrated that 

there is good cause for this deviation because it results in administrative efficiencies by avoiding 

the duplication of information filed in each Docket. 

Ill 
Docket Nos. 14-05003 & 14-06022 Page 89 

THEREFORE, it is ORDERED that: 

1. The Stipulation, attached hereto as Attachment 1, is ACCEPTED. 

2. The Application of Nevada Power Company d/b/a NV Energy for approval of the 

first amendment to the 2013-2032 Integrated Resource Plan and the Energy Supply Plan Update 

for 2015 to include an initial emissions reduction and capacity replacement plan, designated as 

Docket No. 14-05003, is GRANTED as modified by this Order. 

3. Nevada Power Company d/b/a NV Energy's Energy Supply Plan Update is 

APPROVED, as modified by the Stipulation. 

4. Nevada Power Company d/b/a NV Energy's initial emissions reduction and 

capacity replacement plan is ACCEPTED IN PART and DEEMED INADEQUATE IN PART as 

provided in this Order. 

5. The Application of Nevada Power Company d/b/a NV Energy for approval of the 

second amendment to the 2013-2032 Integrated Resource Plan and Action Plan as it relates to a 

new 500-kilovolt/230-kilovolt autotransformer at the existing Harry Allen substation, designated 

as Docket No. 14-06022, is GRANTED. 

6. All arguments of the parties raised in these proceedings not expressly addressed 

herein have been considered and either rejected or found to be non-essential for further 

discussion in this Order. 

7. The Commission's acceptance of the Stipulation does not constitute precedent 

regarding any legal or factual issue. 

Compliance: 

8. Within 30 days of the issuance of this Order, Nevada Power Company d/b/a NV 

Energy shall file in this Docket notice of its acceptance of the Commission's modifications to the 
Docket Nos. 14-05003 & 14-06022 Page 90 

emissions reduction and capacity replacement plan or notice of its withdrawal of the emissions 

reduction and capacity replacement plan. 

Directives: 

9. Nevada Power Company d/b/a NV Energy shall maintain adequate accounting 

information to inform the Commission and the parties in this Docket of the accounting treatment 

for the payroll costs attributable to the Nevada Power employees set to be redeployed following 

the retirement of Reid Gardner units 1-3. 

10. Nevada Power Company d/b/a NV Energy shall continue to hold quarterly 

workshops with the Regulatory Operations Staff and the Attorney General's Bureau of Consumer 

Protection to review the implementation of the constituent elements of the ESP Update and the 

approved hedging strategy. 

11. Nevada Power Company d/b/a NV Energy shall maintain adequate accounting 

information to support the treatment of non-labor savings associated with the retirement of the 

Reid Gardner units 1-3. 

12. By January 1, 2015, Nevada Power Company d/b/a NV Energy shall file with the 

Commission a request for proposal process pursuant to Nevada Administrative Code 

704.9453(8) or, alternatively, an amendment to its emissions reduction and capacity replacement 

plan, therein seeking approval of a specific project that will satisfy a corresponding request for 

deviation under Nevada Administrative Code 704.0097. 

Ill 

Ill 

Ill 

Ill 
Docket Nos. 14-05003 & 14-06022 Page 91 

13. The Commission may correct any errors that have occurred in the drafting or 

issuance of this Order without further proceedings. 

Attest:~' BREANNE POTTER, 

Assistant Commission Secretary 

Dated: Carson City, Nevada 

1~/Jt/J zt 

' " (SEAL) 

By the Commission, 

ALAIN A BURTENSHA W, Chairman 

REBECCA D. WAGNER, Commissioner 

(Concurring in part and dissenting in paragraphs 

156-192, and ordering paragraph 4.) 

\::LtN~ DAVID NOBLE, Commissioner 
ATTACHMENT 1 
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(FIT..,ED WITH THE PUBLIC UTIT..,ITIES COMMISSION OF NEVADA - 9/12/20141 

BEFORE THE PUBLIC UTU..ITIES COMMISSION OF NEVADA 

Application of Nevada Power Company d/b/a NV 

Energy Seeking Acceptance of the First 

Amendment to its 2013-2032 integrated resource 

plan and its Energy Supply Plan Update for 2015, 

which include an emissions reduction and capacity 

replacement plan filed pursuant to NRS § 

704.7311 et s . 

Docket No. 14-05003 

STIPULATION 

Pursuant to Nevada Administrative Code ("NAC") § 703.750 and NAC § 703.845, 

Nevada Power Company (''Nevada Power" or "Company''), the Regulatory Operations Staff 

("Staff') of the Public Utilities Commission of Nevada ("Commission'), the Office of the 

Attorney General's Bureau of Consumer Protection ("BCP"), Interwest Energy Alliance 

("Interwest"), Federal Executive Agencies ("FEA"), Abengoa Solar, LLC (''Abengoaj, 

Bombard Renewable Energy, a division of Bombard Electric, LLC ("Bombard"), Sierra Club 

("Sierra"), Enel Green Power North America, Inc. (''EGPNA"), Nevadans for Clean Affordable 

Reliable Energy {''NCARE''), Griffith Energy ("Griffith''), Switch, Ltd. {"Switch"), and Boyd 

Gaming Corporation, Las Vegas Sands Corp., MGM Resorts, International, station Casinos, 

Caesars Entertainment Corporation, and Wynn Las Vegas, LLC (collectively, the "Southern 

Nevada Hotel Group" or "SNHG") each individually a "Signatory'' and together the 

"Signatories", enter this Stipulation to resolve all issues related to the energy supply plan update 

portion of the above-referenced docket 

SUMMARY OF STIPULATION 

The Parties agree that this Stipulation provides a reasonable resolution of certain ~ssues 

raised in the Energy Supply Plan Update ("ESP") portion of this docket and that the Stipulation 

is in the public interest. 

The Stipulation only settles issues related to this docket. The Stipulation only seeks relief 

that the Commission is empowered to grant. Accordingly, the Signatories recommend that the 

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Commission accept the Stipulation, and grant certain requests for relief made by Nevada Power, 

as modified by the Stipulation. 

RECITALS 

1. Pursuant to NAC § 704.9061, an energy supply plan establishes the parameters of 

an energy supply portfolio for an electric utility for the 3-year period covered by its action plan 

and balances the objectives of minimizing the cost of supply, minimizing retail price volatility, 

and maximizing the reliability of energy supply over the term of the energy supply plan. An 

energy supply plan is composed of a purchased power procurement plan, fuel procurement plan, 

and risk management strategy. 

2. NAC § 704.9506 provides that on or before September 1 of the first and second 

years after the action plan of a utility is filed, the utility shall file an update of the energy supply 

plan that will be applicable for each year remaining in the period covered by the action plan. 

3. On May 1, 2014, Nevada Power filed with the Commission an application 

requesting approval and acceptance of its energy supply plan update for 2014 (the "ESP 

Update"). 

4. Nevada Power's ESP Update was made pursuant to the applicable provisions of 

the NRS and the NAC, Chapters 703 and 704, including but not limited to NAC §§ 704.9506, 

704.9508, 704.9482 and 704.9494. 

5. Pursuant to NRS §§ 703.301 and 228.360, Staff and the BCP participate in these 

20 proceedings as a matter of right. 

21 6. The Nevada Power ESP Update contains the constituent elements of Nevada 

22 Power's purchased power and fuel procurement plans, and its risk management strategies. 

23 7. Staff and BCP, Interwest, PEA, Abengoa, Bombard, Sierra, EGPNA, NCARE, 

24 Griffith, Switch, SNHG have investigated the ESP Update and conducted analysis of the 

25 Companies' requests. 

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1 8. This stipulation resolves all issues related to the energy supply plan update 

2 portion of the above-referenced docket. 

3 NOW THEREFORE, in light of the foregoing considemtions, the Signatories agree and 

4 recommend the following: 

5 AGREEMENT OF THE SIGNATORIES 

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1. Load Forecast. 

A. The Commission should find that the short-term load forecast contained in the 

ESP Update meets the requirements of 

(a) NAC § 704.9321, because the load forecast is based on substantially accurate data and 

is adequately documented, justified, demonstrated and defended, 

(b) NAC § 704.9482, because the ESP Update uses the base load forecast and target 

planning reserve margins, and 

(c) NAC §§ 704.9482(7) and 704.922, because the technical appendices provide sufficient 

detail to determine how the load forecasts were prepared and to evaluate the validity of the 

assumptions and the accuracy of the data used. 

B. The Commission should find the load forecast is suitable for making planning 

decisions during the ESP Update period. 

2. Power Procurement Plan, 

A. The Commission should accept and approve, pursuant to NAC § 704.9494(1), the 

Company's Power Procurement Plans, and the constituent elements of those plans, which include 

the portfolio optimization plans. 

B. The Company acknowledges that the Commission approval and acceptance of the 

portfolio optimization plan does not mean that the Commission has approved the Company's 

"Portfolio Optimization Manual." 

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2 The Commission should approve and accept the Company's Coal Procurement Plan 

3 pursuant to NAC §704.9494(1). 

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Plan pursuant to NAC § 704.9494(1), which includes Nevada Power's plan to continue to 

implement the four~season laddering strategy approved by the Commission in Docket No. 10~ 

09003 to procure physical natural gas. 

5. Gas Transportation Plans. 

A. Nevada Power will not issue a request for proposals ("RFP'') and award economic 

bids for up to 40,000 million cubic feet per day of natural gas transportation capacity during the 

ESP Update period. 

B. Pursuant to NAC § 704.9494(1), the Commission should approve and accept 

Nevada Power's Gas Transportation Plan as modified by paragraph 5 A. 

6. Gas Hedging Strategy. 

A. The Commission should fmd that Nevada Power has satisfied the Commission's 

directive in Docket No. 12-06053 and that Nevada Power should continue to conduct quarterly 

hedging workshops. 

B. The Commission should approve Nevada Power continuing the gas hedging 

strategy currently in place, which was previously approved in Docket Nos. 10~09003, until an 

updated hedging strategy is approved by the Commission. 

C. Pursuant to NAC § 704.9494(1), the Commission should approve and accept 

Nevada Power's Gas Hedging Strategy as modified by paragraph 6 B. 

7. Risk Management Strategies. 

The Commission should accept and approve Nevada Power's risk management strategies 

pursuant to NAC 704.9494, and find that the strategy identifies risks inherent in procuring and 

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obtaining a supply portfolio and establishes the means by which the Company plans to address 

and balance or hedge the identified risks related to cost, price volatility and reliability. 

8. Finding of Prudence pursuant to NAC § 704.9494(3). 

A The Commission should find that the ESP Update presented by the Company as 

modified by the Stipulation balances the objectives of minimizing the cost of supply, minimizing 

retail price volatility and maximize the reliability of supply over the term of the plan, as required 

byNAC 704.9494(3)(c). 

B. The Commission should find that the ESP Update presented by the Company as 

modified by the Stipulation optimizes the value of the overall supply portfolio of the utility for 

the benefit of its bundled retail customers, as required by N AC 704. 9494(3)(b ). 

C. The Commission should find that the ESP Update presented by Nevada Power as 

modified by the Stipulation does not contain any feature or mechanism that would impair the 

restoration of the creditworthiness of the utility or would lead to a deterioration of the 

creditworthiness of the Companies, as required byNAC 704.9494(3)(a). 

D. The Commission should find, pursuant to NAC § 704.9494(3) that the constituent 

elements of the ESP Update presented by the Company as modified by the Stipulation are 

prudent. 

9. Confidentiality. 

The Commission should grant the Company's request for confidential treatment of 

certain portions of the ESP Update pursuant to NAC § 704.7272. 

10. Miscellaneous Items. 

The Comll)ission should accept Nevada Power's plan to continue quarterly workshops 

with Staff and BCP to review the implementation of the constituent elements of the ESP Update 

and the approved hedging strategy as a directive. The Signatories agree that such meetings 

should include a discussion of (a) the reliability and cost considerations related to its physical gas 

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procurement process relative to a month-ahead approach and (b) the reliability and cost 

considerations related to the procurement of fixed price physical gas. 

11. General Provisions. 

A. This Stipulation shall not serve as precedent for the resolution of any issue in the 

future by the Commission, with the exception of the adjustments enumerate herein and the 

findings that follow. 

B. This Stipulation is entered into for the purpose of resolving all the issues in the 

Docket by and among the signatories as set forth above. This Stipulation is made upon the 

express understanding that it constitutes a negotiated settlement. The provisions of this 

Stipulation are not severable . 

C. This Stipulation represents a compromise of the positions of the Signatories. As 

such, conduct, statements and documents disclosed in the negotiation of this stipulation shall not 

be admissible as evidence in these Dockets or any other proceeding. Except as set forth herein, 

neither this Stipulation, nor its terms, nor the Commission's acceptance or rejection of the terms 

contained in this Stipulation shall have any precedential effect in future proceedings. 

D. This Stipulation may be executed in one or more counterparts, all of which 

together shall constitute the original executed document. This Stipulation may be executed by 

Signatories by electronic transmission, which signatures shall be as binding and effective as 

original signatures. 

This Stipulation is entered into by each Signatory as of the date entered below: 

REGULATORY OPERATIONS STAFF 

6 
1 OFFICE OF ATIORNEY GENERAL, 

BUREAU OF CONSUMER PROTECTION 

2 

6 

Dated:_~-·~e.____f-__ , -1\,...---'l.o_t_~--

7 NEVADA POWER COMPANY D/B/A NV ENERGY 

; BT.~---- 1 0 T1tle: Assistant General Counsel 

The following parties do not object to this Stipulation. . 

13 INTERWEST ENERGY ALLIANCE ("INTER WEST") 

15 By:~-.......,..,,_.,:::-----::::-;-;-::----­ Name: Lisa Tonnoen Hickey 

16 Title: Counsel 

17 

18 FEDERAL EXECUTIVE AGENCIES 

19 

Dated: _______ ~~-

20 By: Dated: _________ _ 

Name: Thomas A Jernigan, Capt. USAF 

21 Title: Counsel · · 

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23 ABENGOA SOLAR, LLC ("ABENGOA") 

24 

25 By: ~N-=-am-e-.: Ka~thl...--ce-n""""""M.-::-::D:::-r-.ak:uli,......,....,....ch,..-----

26 Title: Counsel 

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BO:MBARD RENEW ABLE ENERGY, A DMSION OF BOMBARD ELECTRIC, LLC 

("BOMBARD") 

By: .,N:.-am-e-.: Martb....---:.-a-;oJ-. As·.-.--h-cra-ft..---

Title: Counsel 

SIERRA CLUB ("SIERRA") 

By: 'N..--run--e:~G=l-on~·a~D~.~S-m~it~h----------

Title: Counsel 

Dated: ·-------------------

Dated:. __ -------

ENEL GREEN POWER NORTH AMERICA, INC. (''EGPNA") 

By: ~N-=-am-e .... : Mi'""""""chael C. Tierney 

Title: Counsel 

Dated:. ___________ _ 

NEVADANS FOR CLEAN AFFORDABLE RELIABLE ENERGY ("NCARE") 

22 GRIFFITH ENERGY ("GRIFFITH") 

23 

24 By: .""""N..--am-e-.: w=illr:-iam__,J.-. M~cK"ean ___ _ 

25 Title: Counsel 

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Dated:.~---------

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BOMBARD RENEWABLE ENERGY, A DIVISION OF BOMBARD ELECTRIC, LLC 

("BOMBARD'') 

By: 

Name: Martha I. AShcraft 

Dated: 

Title: Counsel 

SIERRA CLUB ("SIERRA") 

By: 

Name: Gloria D. Sm.Hh 

Dated: 

Title: Counsel 

ENEL GREEN POWER NORTH AMERICA, INC. ("EGPNA") 

By: Dated: 

Name: Michael C. Tierney 

Title: Counsel 

NEVADANS FOR CLEAN AFFORDABLE RELIABLE ENERGY (UNCARE") 

By: Dated: 

Name: Robert G. JobDStOn 

Title: Counsel 

GRIFFITH ENERGY ("ORIFFITir') 

B~~6:it·~ Dated: j-/{-2.014 am~c 

Title: Counsel 

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SWITCH, LTD. 

By: ~--=-~=-=---------- Name: Samuel D. Castor 

Dated: __________ _ 

Title: Counsel 

BOYD GAMING CORPORATION, LAS VEGAS SANDS CORP., MOM RESORTS, 

INTERNATIONAL, STATION CASINOS, CAESARS ENTERTAINMENT CORPORATION, 

AND WYNN LAS VEGAS, LLC (COLLECTIVELY, THE "SOUTHERN NEVADA HOTEL 

GROUP" OR "SNHG") 

By:~---=,--...,.---;-;----=:----.----------- Name: Timothy K. Shuba 

Title: Counsel 

ORMA T NEVADA INC. 

By:~~- N arne: FrederiCkf.SChillidt 

Title: Counsel 

1 

Dated: ___________ _ 

Dated:, __ Cj.L.__-_;_/_1-____:._/ tf.:___ __ 
1 CERTIFICATE OF SERVICE 

2 I hereby certify that I have served the foregoing NEVADA POWER COMPANY 

3 D/B/A NV ENERGY'S STIPULATION filed in Docket No. 14-05003 upon the persons 

4 listed below by electronic mail. 

5 

Tammy Cordova Staff Counsel Division 

6 Public Utilities Comm. ofNevada Public Utilities Comm. ofNevada 

7 

tcordova@puc. nv. gov pucn.sc@puc.nv.gov 

8 

Paul Stuhff Attorney General's Office 

Attorney General's Office Bureau of Consumer Protection 

9 

Bureau of Consumer Protection bcpserv@ag.nv .gov 

bcpserv@ag.nv. gov .... 

= = 10 c. Thomas Marrs Samuel Castor ..,EI 

= Q Federal Executive Agency Switch, LTD ~u,.... 11 

a "' I:Jl Thomas.marrs.1@us.af.mil regulatory@supernap. com 

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~::t~ Tina Lee Kathleen Drakulich 

Qs 

~Col= 13 Star West Generation McDonald Carano Wilson LLP 

=~.e =- tlee@starwestgen. com kdrakulich@mcdonaldcarano.com 

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15 Sylvia Harrison Martha Ashcraft 

-= McDonald Carano Wilson LLP Ashcraft Law LLC ~ 

16 sharrison@mcdonaldcarano.com mashcraft@ashcraftl awyers. com 

17 Michael Tierney Terry Page 

Enel Green Power North America Enel Green Power North America 

18 mike.tierney@enel.com terry.page@enel.com 

19 Christopher Thompson Thomas Jernigan 

USAF AFLOAJACL ULFSC Federal Executive Agencies 

20 christopher. thompson. 5@us. af.mil thomas.jernigan@us.af.mil 

21 Katherine Hoffman Samuel Castor 

Lionel Sawyer & Collins Switch LTD 

22 khoffman@lionelsawyer.com regulatory@supernap.com 

23 William McKean Lisa Tormoen Hickey 

Lionel Sawyer & Collins Alpern Myers Stuart LLC 

24 wmckean@lionelsawyer. com lisahickey@coloradolawyers.net 

25 Regina Nichols Robert Johnston 

Western Resource Advocates Western Resource Advocates 

26 rnichols@westernresources.org rj ohnston@pyramid.net 

27 

28 

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28 

Fred Schmidt 

Holland & Hart LLP 

fschmidt@hollandhart. com 

Gloria Smith 

Sierra Club Environmental Law 

gloria.smith@sierraclub.org 

Calvin Siemer 

Las Vegas Sands Corp. 

calvin.siemer@sands.com 

Eric Dominguez 

Caesars Entertainment Corp. 

edominguez@caesars. com 

Katarina Tesarova 

Venetian Casino Resort LLC 

katarina. tesarova@venetian.com 

Paula Eylar-Lauzon 

Boyd Gaming Corporation 

paulaeylar@boydgaming.com 

Timothy Shuba 

Goodwin Procter LLP 

tshuba@goodwinprocter. com 

Tim Lindl 

Keys, Fox & Wiedman LLP 

tlindl@kfwlaw.com 

DATED this 12th day of September, 2014. 

Derek Nelson 

Sierra Club 

derek. nelson@sierraclub. org 

Travis Ritchie 

Sierra Club Environmental Law 

travis.ritchie@sierraclub.org 

Dave Gildersleeve 

Station Casinos Inc. 

dave.gildersleeve@stationcasinos.com 

Henry Shields 

MGM Resorts Inti. 

hshields@mgmresorts. com 

Matt Reinhold 

Station Casinos LLC 

matt.heinhold@stationcasinos.com 

Stacie Michaels 

Wynn Las Vegas LLC 

stacie.michaels@wynnlasvegas.com 

Jake Schlesinger 

Keys, Fox & Wiedman LLP 

jschlesinger@kfwlaw.com 

Is/ Janice Baldarelli 

Janice Baldarelli 

Legal Assistant 

Sierra Pacific Power Company 

Nevada Power Company 

2