By Kerry Lyman
After a wide-ranging discussion at its April 1 meeting, the Fernley City Council unanimously approved the formation of a four-member working group to evaluate financing options for Mark IV Capital’s proposed gas-fired power plant to serve the Victory Logistics industrial area.
Mark IV proposed a three-member working group to determine what it will cost to get the district up and running, what it will cost to operate over time, and how those costs would be paid for, said Bob Sweetin, energy counsel for Mark IV.
“In general terms, the (power) district is self-funded. It’s funded by the community inside the district,” Mark IV Capital Senior Vice President Rick Nelson.
Mark IV requested the working group be made up of a city representative with some electrical background, who cannot be a council member, an energy representative and a Mark IV representative. Councilman Joe Mendoza suggested adding a fire department representative as well “since it is a major infrastructure upgrade and there are the potential for hazards that need to be discussed with the fire district.”
Nelson said Mark IV would be fine with adding a fire district representative to the group. Councilman Albert Torres suggested Barry Williams, the city’s public works director, be appointed as the city representative on the board.
By the end of this month, the working group is expected to produce a narrative report that explains its financial findings, along with a supporting financial document, Sweetin said.
He said Mark IV plans to bring the working group report to the council for the first reading of an ordinance creating the power district on May 6.
“Then, because of the unique nature of forming one of these districts, there’s a four-week publishing period for the ordinance,” Sweetin said, adding that it is intended that the creation ordinance would be adopted sometime in June.
A separate ordinance to rezone the proposed power plant site from rural to industrial also advanced on April 1 and is scheduled for a second reading later this month.
Sweetin touted the benefits to the city of the power district, saying “because of the particularly large (electrical) loads we are dealing with here, the city has the opportunity through both building permit fees and franchise fees to bring in revenues that really aren’t feasible in any other industry, including gaming,” he said.
Sweetin said revenue numbers from similar projects in southern Nevada “dwarf gaming substantially.”
Mendoza asked whether the power district would be completely separate and off the NV Energy grid.
Sweetin said it will not be connected to Nevada Power initially, but it will be at some point in the future when all the necessary infrastructure is built out.
Due to extremely high demand for new power, the cost to expand power capabilities and the regulatory environment, “we expect Nevada Energy to eventually be prepared to bring power up, but eventually is five years, eight years away. There’s really no one who can put a thumb on when it’s going to happen,” Nelson said.
He added that the proposed power district can give large customers something they can’t get for five to seven years, which he said will create revenue for the city through property taxes, franchise fees and sales taxes, predicated on the ability of large businesses to come to Fernley.
“They’re coming here because of the ability to gain power years ahead of the public utility,” Nelson said. “I think it’s a great windfall for the City of Fernley to take advantage of this,”.
Councilman Albert Torres asked how the district will meet the state law requiring a certain amount of green energy as part of the overall energy being produced.
“That’s being planned into the process and will be part of subsequent discussions we’ll bring to this council,” Sweetin said.
Nelson said gas for the plant will come from the Great Basin Gas Transmission Company, a subsidiary of the Southwest Gas Company, a gas line that is already in the city but is being upgraded to give Mark IV the power it will need. He said it will take eight to 10 months to complete the gas line upgrade, but it should be in service by mid-2028.
Once the power district is developed, Nelson said there would be a separate three-member board governing the power district consisting of a member of the development community, a member from the power community and a city member that would report its activities periodically to the city. In response to a question from Councilwoman Felicity Zoberski, Nelson also said they were open to adding a fourth person to that board representing public safety.
The council voted unanimously to approve the working group, consisting of a member from the fire district, the city, Mark IV and the power community, with the board not to exceed four members.
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