Major players in the case -- including the state Bureau of Consumer Protection, the Southern Nevada Water Authority and the Public Utilities Commission staff -- all supported the purchase of the plant. The deal is expected to cost the utility $580 million to purchase and complete the plant.

Still, two sticking points stand to be the center of attention during an Aug. 25 PUC hearing on the deal. One is a reduction in the return on equity incentive the company has requested to buoy the deal. The other could be the high cost of natural gas.

Both the BCP and the Water Authority expressed concern over the Las Vegas electric company's ability to control natural gas costs at the plant.

The new plant -- which is north of Las Vegas in the Apex Industrial Park and dubbed Moapa -- will be about twice the size of a plant the company had proposed to build on the existing Harry Allen generating station site. The company must now receive regulatory approval to swap the projects in an already approved resource plan.

Dennis Peseau, an economist for the water authority, said greater gas consumption poses greater risk. He recommended that the commission order formal discussions regarding the company's hedging strategy, which is designed to limit the exposure to volatile markets.

"Given the potential greater exposure to gas prices with Moapa ... I recommend that the hedging issue be revisited," he said in his testimony.

Nevada Consumer Advocate Tim Hay, head of the BCP, also questioned the natural gas impact of the new plant. He said, however, that the final recommendation of the BCP on the matter has been delayed because of slow responses to data requests the bureau has made to the utility.

There's good reason for the concern.

In July 2002, the average cost per million British thermal units (BTUs) of natural gas was $3.04 at the benchmark Henry Hub trading location, said information provided by the Department of Energy's Energy Information Administration. A year later, that price had jumped to $4.69. At the end of July this year, the price sat at $5.77.

The long-term outlook, as provided by the administration, does not look much better.

Total U.S. natural gas consumption in 2002 was 22.6 trillion cubic feet, the EIA said. By 2025, based in large part on increased demand from electric power plants, that annual total could reach 34.2 trillion cubic feet if economic growth continues to be strong, the EIA projected.

Enron timetable set

The Federal Energy Regulatory Commission has made good on its promise to grant an expedited hearing to Nevada Power and its Reno-based sister utility Sierra Pacific Power Co. in their contract dispute with disgraced power trader Enron Corp.

At stake is more than $300 million Enron claims it is owed for contracts entered into during the Western energy crisis and later canceled by the Houston-based company. The Nevada companies claim the contracts should be abandoned because of market manipulation on the part of Enron and others.

Following a series of pre-filing dates for written testimony, the parties will begin hearings in Washington on Oct. 18. FERC has then promised an initial decision by Dec. 31.

While the utilities and other interested parties declined to comment, the fact that FERC -- which has drawn sharp criticism for failing to act on the Nevada complaints -- is unlikely to render a decision until after the presidential election is decided in November has drawn laughs around the state.

Kevin Rademacher covers utilities and finance for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at (702) 259-4069 or by e-mail at kevinr@lasvegassun.com.