Utility, government settling

Government officials on Tuesday announced a record $90 million settlement with Nevada Power Co. over alleged air pollution and pollution record-keeping violations at three coal-fired power plant units northeast of Las Vegas.

“This is, without any question, the largest air quality enforcement action we have taken to date,” said Mike Elges, chief of the Bureau of Air Pollution Control. The bureau is part of the Nevada Division of Environmental Protection. Others signing the agreement were the U.S. Department of Justice and the U.S. Environmental Protection Agency.

The settlement “shows that our regulatory programs and our oversight works, and we take enforcement action when it’s called for,” said state Environmental Protection Division spokesman Dante Pistone.

Under the agreement, Nevada Power will spend $84.2 million upgrading pollution reduction equipment at three units at the Reid Gardner Generating Station, a coal-fired power plant 50 miles northeast of Las Vegas. The three units can generate 300 megawatts of electricity. A fourth 350-megawatt unit was not cited by environmental officials, but Nevada Power said it would install an advanced combustion system that will eliminate 1,000 tons of nitrogen oxide pollution yearly.

Also as part of the settlement, the utility will provide $4 million in money for energy conservation projects for the Clark County School District over seven years. Nevada Power will pay a fine of $1.1 million of which $770,000 will go to a state fund for air quality regulation.

Roberto Denis, senior vice president of Nevada Power parent Sierra Pacific Resources, said he was pleased with the agreement that allows the company “to put the past behind us.”

Denis said improvements will reduce nitrogen oxide pollution. “Clark County has a regional haze problem. A lot of it is caused by nitrogen oxide,” he said.

“It’s not in our interest to have regional haze or dirty air,” because of its impact on tourism, Denis said. “We thrive off tourism ourselves,” he said, referring to power sales to casinos.

The three units are expected to continue operating until 2012 when the proposed Ely Energy Center is scheduled to be operating. But Denis said Nevada Power will recover the $84 million spent on the pollution equipment within two years because the equipment enables the utility to use coal, rather than expensive natural gas, to generate power.

The Public Utilities Commission has determined that the pollution control equipment is a prudent expenditure. So Nevada Power will seek to recover the money spent on the equipment through higher rates.

Elges said the case dates from 2004 when his staff noticed signs that Nevada Power workers were not reporting and monitoring pollution as required. The state agency reviewed records going back five years and documented 56 violations, according to the state.

Officials also found the Reid Gardner plant was exceeding the allowed amount of visible pollution allowed.

Nevada Power did not admit to any liability for the issues.

In a statement, EPA regional administrator Wayne Nastri lauded the Nevada Division of Environmental Protection’s work.

“NDEP’s strong lead on this case helped propel us to today’s settlement,” Nastri said.

In another statement, Gov. Jim Gibbons said: “I applaud NDEP for its determination in carrying out this enforcement action, and its dedicated efforts to protect the state’s air quality.”