Laughlin Buzz

Apr 14, 2017

Out-of-State electric companies lambasted for another Mohave Station postponement

Out-of-State electric companies lambasted
for another Mohave Station postponement

LA DWP, Edison snubbed Public Utilities Commission of Nevada on 2015 law requiring listing of surplus assets to be sold for economic development

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LAUGHLIN – The owners of the former Mohave Generating Station were blasted on April 11 at the Laughlin Town Advisory Board meeting for yet another postponement of announcing a buyer for 80 percent of the 4-square-mile site in the middle of town.

Representatives of Southern California Edison, Nevada Energy, and sales agent CBRE of Las Vegas – but not the Los Angeles City Department of Water and Power -- spoke to a large audience at the Clark County Regional Government Center in Laughlin to give their excuses for once again failing to meet their publically-announced deadlines, saying there were no buyers. They did cite the first week in May for their next “progress” report.

Notably, the utilities have pushed a sale deep into the Nevada Legislature’s biennial session when it is difficult, if not impossible, to get bills introduced.

The non-sale ties directly into proposed SB-347 that would correct not having any penalty for violating a 2015 Nevada law that required in-state and out-of-state electric companies (no matter what facilities they used to generate and transmit the power) to give the Public Utilities Commission of Nevada a list, by category, of the status of each such asset if it is more than 50 acres.

Those which are surplus – vacant, such as the former MGS, and not in an active reserve status – are required to get with the Governor’s Office of Economic Development to actively sell the property within 3 years. No utility submitted such a list, GOED confirmed with the PUCN. One estimate puts the number of such parcels throughout Nevada at 1,400, although it is impossible to obtain a full count until they do.

When the 2015 law was passed the owners told the State Legislature and Laughlin residents they would have an on-site representative living in the community, and that the sale would be all of the site, except the switch station, the Nevada Power Company (NV Energy) Laughlin substation, and the high-voltage transmission lines. No mention was made of setting aside 100 acres for LA DWP. While the owners have not denied the 100 acres could possibly be used for a future natural gas-fired generating station, at the LTAB meeting the board was told that no type of a generating facility had been determined. A natural gas pipeline ends at the 100 acres that sits next to the switchyard and high-voltage transmission lines. Such a plant would irrepairably damage any mixed-use, master-planned retirement community compatible to the existing neighboring residential and commercial development in Upper Laughlin.

The 100-acre not-for-sale property also defies a fall 2015 town hall held by Dr. Joe Hardy, Laughlin’s state senator (District 12), in which residents by margins of at least 7-1 voted to place gas generating power stations on either side of the Needles Highway at Mile Post 4 on the Laughlin Southland’s 9,000 acres that extend to the California border. That would put a gas-fired plant about 7 road miles from the LA DWP proposed plant that also would be about one-half mile west of Casino Drive.
Bob Stein of Edison’s government affairs office, Keith Spencer of CBRE, and Cynthia Alejandre of Neveda Energy’s government affairs office, said the sale announcement went to more than 750 potential buyers, starting Oct. 11, 2016, and “the co-owners have not received any acceptable offers”. While the owners did reject an offer for a 2,000-acre solar project, saying they understood the community did not want a solar farm in the middle of town, they neglected to mention that LA DWP has demanded the 100-acre site that is too small for a commercial-style solar field.
They told the Laughlin audience the unidentified purchasing prospects claimed the site is too big “for anticipated absorption”, has higher construction costs compared “to nearby markets”, and there are other sites with existing improvements still available.

Board Member Bruce Henry asked why an initial asking price was not disclosed in October 2016 when the offering started but was only released last week. He received “possibly” reasons and a statement that the $15 million is slightly less than the assessed value. The Clark County Assessor’s Office lists the 2017-18 value as approximately $10 million.

The buyer must pay a non-refundable 10% cash deposit and the plant owners would not give prospects a firm escrow closing date, in days, months or even years. 

It is well-known that the last 2 small parcels the owners sold took 3 to 4 years to close escrow. Three different regulatory bodies also would have had to give their approval to the sale of the 2,100 acres.
Continuing to recover their millions of dollars (which should be concluded this year) of costs to demolish or “decommission” the site, and potential flood problems for homebuilders also were cited.
Board Chair James “Jim” Maniaci said he testified in Las Vegas on SB-347 as an economic development bill designed to integrate the fallow lands and buildings in many Nevada communities. 

By selling them to private developers the lands, buildings, and lines would be put on the property tax rolls, and removed from each utilities rate base from its rate-paying customers. But nothing can be done until the utilities are forced to sell off the surplus property. Until then, he said, the property will continue to be included in the formula state utility commissions use to approve the rates charged by the utilities to their customers, even though the surplus does not contribute to generating or distributing power.

The plant opened in the early 1970s, producing 1,500 megawatts for customers in the LA, Phoenix, and southern Nevada areas, using coal pumped some 275 miles from the Navajo and Hopi Indian Reservations in northeastern Arizona. On Dec. 31, 2005, it ceased commercial power production under a federal court order that had given the owners 6 years to install air pollution control equipment.


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