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RENO GAZETTE-JOURNAL
Sempra Energy halts Gerlach project study
Susan Voyles (SVOYLES@RGJ.COM)
March 8, 2006

Sempra Energy has stopped work on a federally required environmental study for its coal-fired power project near Gerlach, prompting opponents to question whether the project has a future.

Gail Givens, U.S. Bureau of Land Management field manager in Winnemucca, said Tuesday that Sempra notified his office late last week to stop work on the federal environmental impact statement. It is required because a short stretch of railroad tracks would cross federal lands to the proposed plant site.

"We are planning to put it on hold for three to six months at their request," Givens said of Sempra's project, called Granite Fox. "It is a cost reimbursable project. Any time staff is working on it, Sempra is paying for it."

Givens said the environmental studies usually cost between $1 million and $3 million. For a 1,200 megawatt power plant, he suspects the cost would be on the high side because of the impacts to the air, groundwater, wildlife and many other issues.

A special-use permit for the plant in Washoe County has not been filed and would await completion of the environmental study. A state permit required for air quality was rejected in July as incomplete and a new application has not yet been filed.

"There are no live applications for the Granite Fox project anywhere," said Chris Ralph, a senior environmental planner with the Washoe District Health Department.

Sempra spokesman Doug Kline in San Diego said the company is holding back on all of the permits while "reconfiguring the project design, based on talks with potential partners and potential customers."

"Obviously, the design of the project is integral to any application," he said.

Kline said new regulations coming in California to forbid importing coal-fired power is the biggest reason for changing the plant design. The policy forbids investor-owned utilities from signing long-term contracts for power that pollutes more than natural-gas fired plants.

"It's definitely a setback," said Nevada Assemblyman Pete Goicoechea, R-Eureka, whose district includes Gerlach. "At a minimum, it's being downsized. At maximum, it might go away."

Goicoechea said he was told by a Sempra lobbyist that the company needs to line up a long-term contract for at least 600 megawatts of power. Without that, he said Sempra would have a hard time raising $2.5 billion to build it.

"I think the project is dead or dying," said David Rumsey, who's converting the Parker Ranch to a nature preserve 10 miles from the project site. "It's going to be very difficult for them to resuscitate this project without the California demand."

Another major issue is that the water the power plant would consume is needed for the future growth of Reno and Sparks, said Jon Wellinghoff, of the Nevada Clean Energy Coalition, formed to fight the project.

"There's no way Washoe County has the luxury anymore to have a fossil-fuel plant site in the county with the water issues we now have. It's too important for the county's economic health to allow water to be blown up in the air in a cooling tower."

In November, Sempra announced that it was scaling back the project from 1,450 megawatts to 1,200 megawatts because of water. After initial studies, the sustainable water rights sought dropped from 16,000 acre-feet to 12,000 acre-feet a year.

A proposed regional amendment for the Truckee Meadows calls for up to 140,000 acres for growth for the next 100 years. But regional and county officials say available, known water sources in Washoe County are not enough to supply growth already approved.