Dec 31st Issue
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Feature Stories - Jun 4th, 2008
 Powering Change Addressing the Disconnect Between Developers and Nevada Power by Dennis Hetherington From dream to reality, the process of planning, constructing and opening a new building – whether it be a billion dollar mega-resort on the Strip, a tract home, or a neighborhood convenience store – there is one constant. In order to open, the new structure must have electricity. Developers, contractors, builders and do-it-yourselfers face a multitude of hoops to jump through as their project progresses. First of all, they need permits from the political subdivision in which they are to be located. Getting those permits and passing the required inspections has been known to make grown men cry and drive applicants to drink. And if the government permit-issuing agencies don’t get you, Nevada Power might. From start to finish, Nevada Power’s basic design process includes ten-steps, starting with project initiation at the company’s new development center (NDC) and progressing up to and through the final step, meter set. For major projects, especially those that might involve extension or alterations to a transmission line or substantial sub-station work, the “major project process” kicks in under a different group of Nevada Power personnel. Nevada Power’s NDC is centrally located on West Sahara Avenue where all builders and developers must go to initiate a new project, regardless of whether it is commercial or residential, large or small. The NDC serves as the first point of contact to ensure timely communications regarding utility costs, timelines and specific utility service alternatives. The mission of the center is: “Be responsive to customer growth by performing the right service, on time, the first time.”
Powerful Problems
“The process for design and releasing for construction in a timely manner is very cumbersome,” says Brad Schnepf, president of Marnell Properties and the only developer who would even agree to comment about Nevada Power on the record. “It takes forever to get on their construction schedule . . . we’ve had buildings where we had to wait for months.” Schnepf, who probably understands the Nevada Power processes as well as any developer or contractor because he worked for the company several years, attributes most of the problems to the processes in place at the power company, not to its personnel. “There are people at Nevada Power who would truly like to do things better and expedite things, but they are held back by internal processes, paperwork etc.,” he explains, while commending Arnold Lopez, economic development and major accounts, for being a very good resource. “He’s a fabulous guy. He listens, sympathizes, empathizes and is very results oriented. He gets it.” Nevada Power serves more than 807,000 electric customers in Las Vegas, North Las Vegas, Henderson, other communities (and the unincorporated areas) of Clark County as well as a small portion of Nye county. Its 1,700 employees service a territory encompassing approximately 4,500 square miles, including the Las Vegas Strip which it calls the “brightest few miles of road in the world”. Nevada Power’s website also claims it faces the “challenge of a phenomenal four percent growth rate, one of the highest of any electric utility in the country.” Construction in Southern Nevada, however, has fallen off drastically in the past 18 months, creating a breathing spell, so to speak, from the frantic pace that had been the norm for so many years. Has this slowdown improved the timeliness of getting electricity to a new project? “No,” according to Schnepf, who says he has seen no improvement on the commercial side, and is unsure of the residential side. He says Marnell Properties has been waiting for five months to get a transformer removed from the site of a convenience store that was torn down five months ago. “Nevada Power has the skills,” says another major developer who wishes to remain anonymous because “we are at the mercy of Nevada Power.” He attributes problems he sees at the utility to an atmosphere in which there is no climate of customer service. “They need to work with the public … we’re not the enemy,” he says, noting that on the commercial side, the power company’s staff doesn’t act like it’s part of the team. Instead, he claims, at Nevada Power it’s “my way or the highway”.
Understanding the Issues
Shank, who has been with Nevada Power for 29 years, admits the utility hasn’t worked with the development community as much as it should, but thinks the program it is starting through its partnership with NAIOP will go a long way to fix some of the problems encountered by developers. “I think we’ll certainly educate them on how things work on our end.” Education into the building process is necessary in many aspects, from obtaining permits to initiating the project with Nevada Power and other utilities. To initiate a project with Nevada Power – the discovery/pre-planning stage – new development customers must provide the electric utility with a project information sheet, assessor’s parcel number, site plan, building square feet and loads. Although it is but two pages long, the project information sheet could intimidate the uninformed. For example, it asks the question, “Are you aware of any of the following conflicts (which may delay construction)?” • Environmental • Street/Highway • SNWA (Southern Nevada Water Authority) • Federal Land Issues • Railroad (UPRR) • FCC • BIA/Tribal Land • High Pressure Gas Lines • Overhead Utilities • Right of Way/Easement Residential or commercial developers can go to Nevada Power’s website and check on the progress of their project, from the time they first walk in the door until they get the meter set, points out Shank. “I want to believe we’ve done a lot over the last three years to improve things,” he adds, noting that Nevada Power has done more than 2,000 projects a year. He says the company conducted a survey earlier this year, starting with top builders and developers in southern Nevada, and sought their views and asked them to rate the company on how it has been doing. “There is a gap….but I expect by the end of the year, that gap will be narrowed considerably by the activities we are doing with NAIOP,” he anticipates. Three years ago, Nevada Power heard that it was taking too long for its crews to pull wire and energize on new projects. “We had a challenge in finding qualified linemen to fill our vacancies, but we knew we had to cut our turnaround time, which in early 2005 was eight to nine weeks,” Shank explains. “Our goal was to get it down to no more than four weeks.” He says that by hiring contract crews – some 45 linemen – the company has actually exceeded its goal and reduced the time for pulling wire and energizing down to just three weeks. He also points out that improvements have been made in the design phase and that the company supplemented its regular design work force with 10 to 15 contract designers. Nevada Power, of course, isn’t the only utility developers and contractors have to work with on a new construction project. There is also Southwest Gas, the Las Vegas Valley Water District, various sewer districts as well as the possibility of phone companies, cable companies, security companies and others. So, how does Nevada Power compare to those other utilities when a construction project is underway? “Our experience with the other utilities has been very good,” says Schnepf. “Most of them are very responsive and Southwest Gas is Johnny on the spot.” Nevada Power is the biggest block, says another developer. “If you have a problem, tough luck … there is nothing you can do about it.” He also insists Nevada Power should be more proactive in working with developers to bring more power to them. “Everyone needs more power, but they never bring it … time after time, it’s the same story – they run out of power.”
Communication is Key
Shank says a lot of developers use engineering firms and consultants to represent them, especially during the design phase. After it moves into the actual construction phase, there is more interface with the general contractor and subcontractors. With so many players, there can be some miscommunication, especially since the contractors are under so much pressure from the developers. He also notes high turnover recently among construction superintendents in the field and that Nevada Power needs to educate the new superintendents on its needs and how its processes work. While acknowledging that internal communication at Nevada Power among the various departments involved in a project needs to improve, Shank calls for developers and contractors to alert his people immediately of any issues out in the field. Unfortunately, there has not been the level of communication needed between Nevada Power and developers. “What we don’t want to see happen is a project where things go back and forth and issues don’t get resolved,” Shank says. “Then, all of a sudden we have a huge time crunch.” He explains that every project is assigned a coordinator and that Nevada Power has no concerns if a developer or contractor feels they have to “ratchet a problem up the chain of command.” It seems to boil down to relationship building, with communication, education and a dedication to getting the job done right. “We want the developers and contractors to be engaged and to understand our processes,” maintains Shank. “The better they understand what we do, the more efficiently they can get their jobs done.” Developers and contractors don’t dispute that, but insist that Nevada Power has a responsibility as well, to learn and understand the needs of its customers. Delays in projects, for whatever reason, are costly to all parties – the developers, the contractors and even Nevada Power. After all, a meter that is not running is not producing revenue. And Nevada Power, like all investor-owned utilities, is in business to make money.
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