The Lunch Table: More than Just Casinos in Southern Nevada

Southern Nevada, where I vacationed recently during my kids’ spring break, provides a stroll (actually, 75 MPH drive) through U.S. electric power generation history.

First, there’s Hoover Dam, the nearly 80-year-old testament to the endurance of the energy infrastructure, which still pumps out about 4.2 TWh of electricity a year (roughly .1 percent of U.S. demand) and has a capacity of over 2000 MW. Amazingly, it was built in five years and is the oft-cited example of a public-works project.

It’s hard to imagine the government building anything of Hoover-Dam scale so quickly nowadays. Consider the Weatherization Assistance Program, intended, like a modern-day Hoover Dam, to put people back to work through a government-sponsored energy project. I’ve always liked Van Jones description of the program as the ideal way to convince people to “put down their hand guns and pick up a caulking gun.”

The Stimulus Package, ARRA, gave the program a $5 billion shot in the arm, but spending was delayed for over a year as officials ironed out regulations designed to ensure caulkers were paid fair wages.

On the other hand, current labor regulations would likely have prevented most if not all of the approximately 50 mysterious Hoover Dam worker deaths. While the contractor attributed the deaths to pneumonia, some historians have speculated that the workers died of carbon monoxide poisoning from engine fumes in the diversion tunnels, where temperatures periodically reached 140 degrees Fahrenheit. (Many more workers died during construction, but the 50 “pneumonia” deaths seem to be the most controversial.)

Wikipedia’s picture is more spectacular than mine, and shows the diversion tunnels in use:

Next we passed the remnants of the Mohave coal power plant. Driving by, I knew it was a power plant because what other large structure in the middle of the desert has transmission lines leading to it? I discounted my husband’s speculation that it was a coal plant since it didn’t have a smokestack. This YouTube video confirmed he was right (start at 1:30 unless you like long lead-ins):

Mohave, a nearly 1,600 MW coal plant built in the early 1970s, has been shuttered since 2005. Some hope Mohave symbolizes the future of coal in the U.S., as it was closed in part because the costs of meeting stricter environmental regulations became prohibitively high.

Finally, about 40 miles south of Las Vegas, we passed the El Dorado combined-cycle natural gas plant. Twelve years ago,before theCalifornia electricity crises, this plant was at the vanguard of the electricity sector as it was built and operated by a non-utility or merchant generator who sold power into the competitive wholesale electricity market in California, earning substantial profits as the crisis pushed prices higher.

Now, it’s basically a run-of-the-mill efficient 500 MW natural gas plant, except that it butts up against a field of solar photovoltaic panels. The first phase of the Copper Mountain solar plant has about 50 MW capacity, but more panels are planned. President Obama visited several weeks ago, signaling its hoped-for prominence in the future of electricity generation.

So, here’s the $64,000 question. If the desert in Southern Nevada is a microcosm of the U.S. electricity sector, what will it look like in 10 years? Field after field of solar panels to replace retiring fossil fuel plants? (Nevada is just starting to get wind turbines, and here’s an article that describes some of the trials associated with the first project.) Or, is 10 years effectively the blink of an eye in an industry where plants routinely last for more than half a century and where permitting and siting new plants can take many years? If I had to put money on one of the two scenarios, I’d go with the latter. I would be happy to be proven wrong.

About Catherine Wolfram

Catherine Wolfram is the Cora Jane Flood Professor of Business Administration at the Haas School of Business, Co-Director of the Energy Institute at Haas, and a Faculty Director of The E2e Project. Her research analyzes the impact of environmental regulation on energy markets and the effects of electricity industry privatization and restructuring around the world. She is currently implementing several randomized control trials to evaluate energy efficiency programs.
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