For the better part of the last decade, Senate Majority Leader Harry Reid has gone out of his way — and dipped into federal funds — to help get a massive, cross-state transmission line built in his home state of Nevada.
On Thursday Reid will attend the opening of the 235-mile line, which at the beginning of this year started carrying large amounts of electricity produced from renewable sources rather than coal, just as Reid envisioned seven years ago.
In at least three different instances, Reid ensured that federal legislation moved the project forward, including helping get a $343 million loan guarantee approved from the Energy Department’s politically beleaguered program. Reid also brought to the negotiating table — sometimes reluctantly — two Nevada energy companies, NV Energy and LS Power, to make sure they worked together on the project after he had come out against their previous plans to build new coal-fired power plants.
The completion of the “ON Line” (officially the One Nevada Transmission Line) is a testament to the unparalled might of the most powerful member of the Senate. Reid shepherded the project to fruition with little public discussion of it in Washington, even though much of the action that made it happen took place inside the Beltway.
“He inserted his influence as the majority leader to put those two private parties together and try to find whatever federal funding was available, and encouraged the right people to fund it,” said Chris Miller, who was Reid’s top energy and environment policy adviser for more than seven years, including almost the entire time this project was in the works. Miller left Reid’s office a year ago to join AJW, a Washington lobbying and consulting firm.
While Reid isn’t a sitting member on any committee, he does retain the right to exercise authority as a former senior member of the Appropriations Committee, one of the most powerful Senate panels.
“When you have the fact that you’re the majority leader and a senior member of the Appropriations Committee, you have a lot of negotiating power,” said Frank Maisano, a senior principal at Bracewell & Giuliani, whose clients include many fossil-fuel companies but also some renewable-energy firms. “Those two things together have given him lots of ability to do what he needs to do to gain leverage for projects.”
In a statement, Reid praised the project: “Construction of this transmission line created hundreds of jobs for Nevadans, thanks to the public-private partnership that was made possible by the Recovery Act. This vital project will deliver hundreds of megawatts of clean renewable energy to the grid. Completion of the ON Line transmission project is an important step towards unlocking Nevada’s vast clean energy potential and strengthening our state’s electric grid for the future.”
The Nevada Democrat’s first act of explicit help came from within the 2009 Recovery Act, which injected $840 billion into the economy amid the worst recession since the 1930s.
Reid ensured that the Western Area Power Administration, a power-marketing agency within the Energy Department, gained borrowing authority from the Treasury Department. Tucked away on page 27 of the more than 400-page stimulus bill, this authority ensured the transmission project could receive a loan guarantee to help its financing.
According to two former Reid aides, officials at the Energy Department ultimately decided the transmission project would be better off getting a loan guarantee from its program, which was funded with $2.4 billion worth of stimulus money.
In February 2011, the Energy Department finalized its $343 million loan guarantee for the project. It was the only transmission line out of about two dozen projects (including the infamous and now bankrupt solar manufacturer Solyndra) that received loan guarantees from the stimulus program. A former Energy Department official said the project received no special treatment and was handled the same as others, regardless of Reid’s involvement.
“To the best of my knowledge, there was no particular or special or unusual request or influenced interest in this project from any source,” said the official, who would speak only on the condition of anonymity.
Nonetheless, Miller pointed to letters Reid had written encouraging the administration to expedite loan guarantees, including one for the transmission-line project, as well as calls made between Reid and former Energy Secretary Steven Chu.
“He definitely had conversations with Chu and I, with congressional affairs urging them to complete action/make a decision on the [transmission project] application, though those were usually in the context of other, larger issues,” Miller said.
Then in the summer of 2010, Reid found another opportunity to help the project from Capitol Hill. The line is 235 miles long now, but LS Power has development rights to make it twice that length and reach into Idaho. When concerns arose about the transmission line’s potential impact on sage-grouse habitat and a historic Japanese-American internment camp in Idaho, Reid inserted language into the summer jobs bill of 2010 that directed the Interior Department to change the line’s route to avoid both these areas. If and when LS Power builds out the northern part of the line, the path will in essence be preapproved.
“This is a great example of a small state like Nevada where he can cast a big shadow of influence,” said John Wallin, the former executive director of the Nevada Wilderness Project. Wallin, who now works at the Conservation Lands Foundation, said that the loan-guarantee money was significant “because a little state like Nevada doesn’t often get the first bite at that stimulus apple. He didn’t just get the money appropriated, he got it appropriated in a specific connection so you can draw the line back to his coal opposition.”
Indeed, Reid’s push for the ON Line started in earnest in 2007, when he penned a sharply worded letter to executives of four electric companies, including LS Power and NV Energy, saying he would “use every means at my disposal” to prevent construction of three coal-fired power plants planned by utilities in Nevada. In that four-page letter, Reid said Nevada must “not commit our valuable and finite financial resources to technologies or energy sources that will pollute the air, increase the risks of global warming, and likely be far more expensive in the future than currently estimated.”
The letter — signaling a new environmental push by Reid focused on global warming and renewable energy — was a driving force behind the companies’ decisions not to build the coal plants and laid the foundation for Reid’s efforts on the transmission line.
“Meeting Nevada’s demand for electricity, including the building of transmission lines to rural areas with significant renewable potential, is no easy task,” Reid wrote in the July 24, 2007, letter.
He then started to lay the groundwork to ensure that a north-south transmission line, which energy companies have been trying to build out for decades, came to fruition — but with renewable energy as a big customer. This involved getting LS Power and NV Energy to work together, despite their different business models — one is regulated and the other is not.
“It was a shotgun wedding that Reid orchestrated between the two companies to build the transmission line,” Miller said.
An executive at NV Energy didn’t go quite so far, but he indicated that the support from Reid — and the entire Nevada delegation — was important to the project. LS Power did not respond to a request for comment.
“We don’t just go to one delegation member because they happen to be the Senate majority leader,” said Tony Sanchez, senior vice president for government and community affairs at NV Energy. Noting that Nevada’s delegation includes both Democrats and Republicans, Sanchez added: “To do anything you need a bipartisan approach.”
Sanchez, whose company’s original plan was to move coal-generated power through the ON Line, said what really made this project possible was the rise of renewable energy in the West.
“You can draw the direct line between Senator Reid’s involvement and his advocacy for the development of renewables,” Sanchez said. “And you can see how he would have been involved.”
Nevada, in fact, ranked second in the nation for both geothermal and solar energy in 2011, according to the Energy Information Administration. A renewable portfolio standard first enacted in 1997 but significantly increased several times throughout the decade of the 2000s requires 25 percent of Nevada’s electricity to come from renewable sources by 2025. In 2012, 16 percent of the state’s net electricity sources were renewable, according to EIA.
So what came first, renewables or Reid, who was first elected to the Senate in 1986 and became majority leader in 2007? It appears they have risen in tandem.