For the second consecutive meeting, the Fernley City Council postponed action on a proposed ordinance creating the Fernley Power District, with a majority of council members saying they want to review an independent consultant’s analysis before adopting the framework that could govern electric service for future large industrial users.
The ordinance, first introduced May 20, was continued in June and again July 15, when the council voted 3-1 to postpone a second reading until Aug. 5. Councilman Ryan Hanan cast the lone dissenting vote in favor of moving forward. Councilmembers Albert Torres, Joe Mendoza and Felicity Zoberski supported the delay. Mayor Neal McIntyre, who strongly advocated for adopting the ordinance, votes only in the event of a tie.
The proposed power district is intended to support a large natural gas-fired power plant planned by Mark IV Capital to serve major industrial customers in the Victory Logistics District. During the meeting, representatives of Mark IV argued that adopting the ordinance would provide the certainty needed for customers to sign long-term power contracts and allow the project to move forward.
Council members who supported delaying the vote emphasized they were not rejecting the project. Instead, they said the city should first review an independent analysis from Raftelis, the utility consulting firm hired to evaluate the proposal.
The request for additional review came relatively late in the process. The council created the power district working group April 1, with a City of Fernley representative, Barry Williams, as well as North Lyon County Fire Department Capt. Kuntz, serving alongside representatives of Mark IV Capital and Stella Power. The working group was expected to develop recommendations and a draft ordinance for council consideration.
The council unanimously approved the ordinance’s first reading May 20. City staff then brought forward a contract with Raftelis on June 3 to provide an independent review of the proposal. Raftelis estimated its work would take four to six weeks, contributing to the ordinance’s postponement in June and again in July while the analysis is completed.
The council’s caution reflects the size of the decision. During the meeting, attorney Bob Sweetin, representing Mark IV Capital, argued that if the district ultimately expands to its projected capacity, the proposed 1% franchise fee could generate an estimated $68 million to $83 million annually for the city, compared with Fernley’s current general fund budget of approximately $13.4 million.
Those figures are projections presented by the developer and are among the financial and operational assumptions Raftelis has been hired to review. The timing of that review has now become central to the council’s decision, even though the independent analysis was commissioned after the ordinance had already advanced through its first reading.
Mendoza made the motion to continue the ordinance until the consultant’s report is complete and any necessary revisions can be considered before adoption.
The discussion ultimately centered on two competing viewpoints. Supporters of delaying the ordinance argued the city should independently verify the project’s assumptions before establishing the district. Supporters of immediate adoption countered that investors need certainty now and that the ordinance could be amended later as the project develops.
Throughout the discussion, council members questioned the proposed governance structure, financial assumptions, projected electric rates and whether additional safeguards should be incorporated before the ordinance is adopted, many of the same issues Raftelis has been hired to evaluate.
Torres said he appreciated the additional information presented during the meeting but remained concerned about ensuring the city fully understood the proposal before taking action.
“We have to do our due diligence,” Torres said, noting that Fernley must balance industrial growth with maintaining the quality of life residents expect.
Zoberski said she believed it was premature to adopt the ordinance before reviewing the consultant’s findings.
“It feels a little premature to be making a decision on an ordinance before we have a look at the report from the working group,” she said.
Supporters of the project countered that the consultant’s work should not delay adoption because the district’s governing framework can be amended later if necessary.
Sweetin argued the city’s power district working group was created to study operational and technical issues, not the legality or structure of the ordinance itself.
“The power district working group is looking at proper operations, proper deployment, proper electrical service rules,” Sweetin said. “What they are not analyzing is the ordinance, the legality of the ordinance or the franchise fees related to the ordinance.”
Rick Nelson, senior vice president of Mark IV Capital, told the council the company has spent years developing the project and that prolonged uncertainty could jeopardize contracts with prospective customers.
“When customers do not sign contracts, billions in private infrastructure investment does not occur,” Nelson said.
Nelson argued the proposed 1% franchise fee was intentionally designed to keep Fernley competitive with other locations pursuing similar industrial projects.
“A higher franchise fee early on does not produce more money for the city,” he said. “It produces less development and far less revenue. The 1% rate is the key that unlocks the entire benefit.”
Mark IV estimates the proposed franchise fee could generate between $126 million and $157 million during the project’s first six years, while also producing substantial property tax, personal property tax and permit fee revenue. Company representatives said those projections depend on attracting multiple large industrial customers that require significant electrical capacity.
Hanan said he believes the project represents a rare economic opportunity for Fernley and argued the council could modify the ordinance in the future if needed.
“In five to 10 years that may give the city the wealth to start its own police department and fire department,” Hanan said. “I see this as an amazing opportunity.”
McIntyre also urged the council to move forward, calling the project transformational for Fernley.
“I think this is an amazing project that will really financially help the city of Fernley,” the mayor said. “Let’s get these people in here. Let’s get it started. As it moves along, let’s look at it again.”
Sweetin likewise emphasized that the ordinance establishes a framework that can be amended over time as the district evolves.
Council members, however, maintained that reviewing an independent analysis before adopting the ordinance would better position the city to make informed decisions on a project with potentially significant long-term impacts.
The ordinance is scheduled to return to the City Council on Aug. 5.
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