Sithe Global loses water rights for proposed Toquop power plant

According to the BLM’s Draft Environmental Impact Statement for the project, Toquop’s operations

would require 2,500 acre-feet of water a year. About 90 percent of the water would be used by the

power plant’s evaporative cooling system and wet-flue scrubber operations. Sithe’s plans called for

leasing 2,100 acre-feet of groundwater a year. (Page 2-4 and 2-15, Chapter 2 of the DEIS, online

at:

http://www.blm.gov/nv/st/en/fo/ely_field_office/blm_programs/energy/toquop_energy/toquop_draf

The rights to 2,100 acre-feet were granted by the Nevada State Engineer to Vidler and Lincoln

County in 2002, when Toquop was first proposed as a natural gas-fired power plant. Vidler and

Lincoln County originally applied for rights to appropriate more than 7,000 acre-feet a year, but the

state engineer denied that request in his ruling on the basis that the amount far exceeded the

The Vidler Water Co. sold its rights to a group called the Pouqot Water & Power Co.

Contact information at the end of this e-mail for the principals in Pouqot Water, a registered LLC

with the Nevada Secretary of State’s Office.

Pouqot is made up of up at least two principals from BLT Acquisition Group, an LLC formed in 1999

that touts itself as a combination “dynamic multi-faceted holding company,” international investor

and operator of a chain of dry-cleaning stores in Las Vegas. BLT owns 3,700 acres of land near

Mesquite acquired through Lincoln County Land Act auction and slated for development of two

casinos, more than 10,000 dwelling units, several hotels, golf courses, commercial real estate, all of

Under the groundwater permit issued to Vidler, the proof of completion for the permit is due by

January 2009, and the water must actually be put to use by January 2013.

forfeiting their rights, and with Sithe’s EIS and air permit still not complete, the clock was ticking.

Mesquite’s Desert Valley Times quoted Sithe spokesman Frank Maisano confirming that the

company’s water rights had been cancelled.

The bottom line, is that after holding its water leases for more than five years, Sithe now needs to

find another source of water – in a place where there isn’t any. It won’t come from the Virgin Valley

Water District, which, according to the state engineer’s ruling, strongly protested Vidler’s application

for the Toquop water rights on a number of grounds. And SNWA isn’t likely to relinquish a drop, let

alone 2,500 acre-feet, for a speculative energy project that is now headed into its eighth year of

permitting since a notice of intent was first published in 2001. (Page 11 of the 2003 EIS for Toquop,

Beyond questions of the project’s viability, there’s the implications of the lost water rights for

Toquop’s permitting. As the groups’ letter indicates, all the assessments in the EIS regarding both

water quality and quantity are no longer accurate or complete. Water effects everything from

whether the plant uses wet or dry sulfur control systems to the amount of particulates emitted from

cooling towers. If Toquop does find new water sources, any portions of the environmental analysis

associated with water will have to be redone.

Maisano insists that “negotiations are going on for additional water resources” and that Toquop “is

going forward,” according to the Mesquite newspaper.

That’s a tune Nevada has heard before from power plant developers whose projects run into big

obstacles. Sempra Energy’s failed Granite Fox project, a 1,450-megawatt coal-fired power plant

proposed near Gerlach, was effectively killed in 2005 by a combination of California’s new climate

policies, which prohibited energy purchases from out-of-state coal plants, and widespread opposition

based largely on the plant’s huge water use, 25,000 acre-feet a year.

Sempra, however, hung on and continued to say publicly the project was moving forward, first

shrinking its output by around 250 megawatts in late 2006 due to lack of available water, then

putting the development rights on the auction block. It wasn’t until 2007 that Sempra ultimately

shelved Granite Fox altogether – with no buyers coming forward and the Nevada State Engineer

considering a multi-year process to adjudicate all the water rights in the watershed where the plant

would have been built.

Contact info:

John Paul, Virgin Valley Water District president, 702-346-8471

Vidler Water Co. – Carson City, 775-885-5000

• John Hart, CEO

• Dorothy Timian-Palmer, president and COO

• Greg Bushner, VP of Water Resources Development

Pouqot Water & Power LLC

• Michael Kulwin, Las Vegas attorney, 702-387-5533

• Brent Ramenofsky, Ramenofsky Management, 702-255-0588

• Dennis Rider, Henderson, 702-433-9696

Mesquite Mayor Susan Holecheck, 702-346-5295

You can reach Charles Benjamin from WRA regarding the letter to BLM at 775-671-5690.

Tim Hay was the Nevada state consumer advocate during much of Sempra’s Granite Fox efforts and

can comment on corporate responsibility. He’s at 775-771-9007.