Nevada PUC approves 2 gas plants for data centers

Nevada utility regulators have approved two private methane gas power plants proposed to serve data center projects at and near the Tahoe Reno Industrial Center in Storey County, clearing a key hurdle for a developer that says demand for electricity has outpaced NV Energy’s ability to provide service for new projects.

The Public Utilities Commission of Nevada approved the request during a special meeting in Carson City, allowing Tract Capital Management and its subsidiary Fleet Data Centers to move ahead, subject to additional environmental and local permitting. Regulators said the projects still require review by the Nevada Division of Environmental Protection and approvals from Storey County.

"No permit will be issued without proper state agency oversight, and I think that’s important to reiterate", said PUCN Commissioner Randy Brown.

Fleet’s Peru Ridge and South Valley plants are the first methane gas-powered electricity supply approved specifically for data center use in Nevada. Once built, the two plants are expected to generate more than 360-megawatts of electricity, which the company said is enough to serve the equivalent of 396,000 homes.

In filings, Fleet said it expects the plants to run for between two and three years, "until NV Energy can deliver permanent utility service to the site."

A spokesperson with Tract Capital Management said the ruling "allows these important projects to move forward with reliable on-site power generation that will come at zero cost to Nevada residents."

Public opposition at hearing

The vote followed nearly three hours of public comment marked by strong opposition from Nevadans who raised concerns about air pollution, climate impacts, and possible effects on the state’s air, water, and quality of life.

After the vote, some speakers said they believed their concerns had not been heard.

"I thought you were supposed to represent the people and the utilities, and it feels like everyone here is trying to tell you that we aren’t being heard", said Elizabeth Bree Kasper, a frequent participant in PUNC hearings. "My follow-up public comment is trying to ask how we can follow up, and the response from everyone here is that there is no follow-up; that we need to just take it."

PUCN Chair Hayley Williamson said commissioners are limited by statute in the evidence they can weigh when deciding whether a project serves the public interest.

PUCN Commissioner Tammy Cordova echoed that point.

"It does show something that the community is very interested in, but I think I would be failing in my responsibility if I somehow held this applicant to a different standard or a different set of laws than all of those other applications that the commission has prosecuted over the years", Cordova said.

She also said she did "appreciate the comments of everyone who came out today and has taken an interest in our proceedings."

PUCN general counsel Garrett Weir told attendees that public comments cannot be treated as evidence in the commission’s vote and said residents should contact the Nevada Attorney General’s Bureau of Consumer Protections, which he said "have an obligation to advocate for the public interest" in utility cases of public concern.

"It is tragic that folks show up with expectations that aren’t realistic about what the public comment can actually achieve", Weir said.

"The representation in Nevada before the Public Utilities Commission is generally through intervention by the Bureau of Consumer Protection", said Weir. "In the case that most of the public comments were made on today, the Bureau of Consumer Protection didn’t participate."

Challenge from clean energy advocates

Western Resource Advocates, representing Nevadans for Clean Affordable Reliable Energy (NCARE), intervened before the commission in a hearing on July 30 to challenge the proposal. The group argued that approving the projects would bypass Nevada’s renewable energy portfolio standard, which requires power providers to use 50% renewable energy by 2030.

Fleet has argued that its methane gas plants do not fall under that standard because it is not technically an energy provider like NV Energy.

According to PUCN filings cited in the case, NCARE said the size and capacity of the private gas plants would nearly rival utility-scale methane gas plants across the U.S., where about 80% of gas power plants average about 500 megawatts or less.

An analysis by NCARE found that, if built to specifications, the new plants would burn about three times as much methane gas as NV Energy’s entire Northern Nevada residential and commercial customer base in 2025, or enough gas to supply about 652,000 homes. The same analysis said that if the plants had been operating in 2025, Nevada’s emissions would have increased by nearly 12%.

John Sadler, the communications director for the Nevada Office of the Attorney General, said the Bureau of Consumer Protections sometimes intervenes in utility cases but that officials believed NCARE - the only organization that intervened in opposition - could represent community concerns effectively.

Sadler also sharply criticized the commission’s decision.

"The PUCN ‘failed to account for evidence that was placed directly before them. The commissioners’ disregard for that evidence, while issuing a ruling that favored the applicants, represents a genuine failure of their public duty,’" Sadler said.

He added: "The PUCN’s current attempt at damage control is disingenuous. Telling today’s public commenters that their concerns weren’t part of the evidentiary record is simply false - NCARE introduced that same evidence, and in fact amplified those very issues during the due process hearing", Sadler said.

Western Resource Advocates said it is considering what comes next and, as an intervening party, has the right to appeal the commission’s decision.

"We’re disappointed in today’s outcome and will be exploring next steps", said George Cavros, senior attorney at WRA. "Western Resource Advocates represented Nevadans for Clean Affordable Reliable Energy in these cases to give everyday Nevadans a voice as a party to these proceedings, and to ensure the Commission applied transparent and meaningful analysis under the Utility Environmental Protection Act."

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