Update on Power Plant Expansion0

Posted by Thomas Miller, CCIM

Anybody driving east of Reno has seen the large construction equipment working on Sierra Pacific Power plants’ Tracy facility lately. This plant is a large supplier of power for the area. In addition to this plants resources, SPPCO buys power through the grid to satisfy the needs of the growing Truckee Meadows. 

The new addition to the Tracy is scheduled to come on line in mid 2008. At a cost of $421 Million. At that point, SPPCO figures to be able to supply Northern Nevada with all of its needs from this facility exclusively. This is good news and it’s the first time this has happened in history.

But the other side of the coin is that to sustain that self-sufficiency, the plant will need to be expanded by this same amount every two years. And that’s with the slowdown in homebuilding. Since the plant is gas fired; SPPCO will now be even more dependent on the natural gas market, however. But at least,  the power company will not be as reliant on the wholesale grid to buy needed power. And I assume the plant will have the option to but off the grid or produce at capacity, should natural gas pricing rise too far.

All of this is encouraging to me, since our power company is often vilified as a necessary evil, with the need to raise electrical use rates being a common mantra coming from the management. It’s good to see at least some of the revenue being redirected back into added infrastructure to help serve the community and add flexibility to their electrical generation operations.

My son returned from a tour in beautiful downtown Baghdad recently and with Saddam’s rule, power was on for a few hours daily. Now, with the insurgents constantly tearing up the infrastructure, it’s not on at all on some days. Think about that a little when you walk into a dark room and flip the switch. Even on the hottest of days.

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About the Author

Thomas Miller, CCIM

Thomas Miller, CCIM is the president and broker of Miller Industrial Properties in Reno, Nevada. He has worked in industrial real estate since 1991, with 15 years of previous experience designing and building industrial warehousing and manufacturing facilities in the northern Nevada market. Contact Tom at tom@mipnv.com or 775-742-9891.

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