Third Private Gas Plant for Data Centers Seeks Nevada Approval as Pipeline Expansion Advances

Nevada utility regulators are set to weigh whether to approve a third private methane gas-fired power plant dedicated to data center use, as NV Energy struggles to keep pace with surging demand in the region. Switch, a major data center developer in Nevada, is seeking approval for a 510-megawatt natural gas-fired power plant at the former Sierra Biofuels Refinery in the Tahoe-Reno Industrial Center, according to filings with the Public Utilities Commission of Nevada. The 20-acre project was initially proposed in June by Nexus Fulcrum LLC, but Switch disclosed in September that it was the "ultimate owner" of the project.

The proposal comes as a planned gas pipeline expansion in northern Nevada could increase the amount of natural gas flowing into the region by as much as five times. NV Energy told regulators that rapid growth at and near the Tahoe Reno Industrial Center has outpaced available regional generation capacity, noting in filings that "the existing system has limits." Data center operators looking to expand energy capacity in regions with grid constraints are increasingly proposing their own private on-site power plants — so-called "behind-the-meter" systems — mostly powered by natural gas. Unlike the two temporary gas-fired power plants approved by utility regulators last month, the lifespan of Switch's project would be 30 years or more and would be supplied by a gas pipeline expansion proposed by Southwest Gas Corporation subsidiary Great Basin Gas Transmission Company.

If constructed, the power plant could produce as much as 2 million metric tons of carbon dioxide annually, according to the project application — equivalent to the CO2 produced by roughly 453,000 gasoline-powered passenger vehicles driven for one year. In written testimony to the PUCN, Zoë Harrold, on behalf of Nevadans for Clean Affordable Reliable Energy, said the facility's projected emissions would exceed all utility-owned fossil-fueled power plants in Nevada except the North Valmy coal-powered plant. "At the upper end, the Project's emissions would effectively eliminate the progress made to reduce electric sector emissions in Nevada since 2015," Harrold said in her testimony. Nevada passed its renewable energy standard in 2020, mandating that energy providers utilize 50% renewable energy by 2030, but private on-site power plants are not required to follow the standard because they are not traditional energy providers like NV Energy. Harrold added that emissions from the Switch plant and the two previously approved facilities are expected to contribute to the long-term increase of CO2 driving climate change, and extensive scientific research shows that long-term exposure to fine particulate matter is associated with heart disease, stroke, respiratory illness, asthma, and premature death.

More high-emissions gas-fired power plants are likely being planned in northern Nevada amid the massive expansion of a methane gas pipeline in the region. Switch's proposed plant is one of a dozen new delivery points tied to a pipeline expansion planned by Great Basin Gas Transmission Company, which is in the early stages of a federal environmental review to build about 230 miles of new or expanded pipeline across Churchill, Humboldt, Lyon, Pershing, Storey and Washoe counties. Great Basin said the project includes an expansion to the Tahoe-Reno Industrial Center and is needed "to meet growing natural gas demand in northern Nevada," with the expansion capable of supplying an estimated 5,000 megawatts of new gas-powered electricity generation. According to pre-filings with the Federal Energy Regulatory Commission, the pipeline expansion includes plans for 12 new delivery points in Churchill, Storey and Lyon counties. Great Basin did not disclose who has signed agreements to move natural gas through the pipeline to the new delivery points or for what purpose the gas will be used, telling FERC that the information is "privileged and under non-disclosure agreements." However, filings to the PUCN confirmed that Switch's planned plant is one of the 12 new delivery points that will be supplied gas from the Great Basin Pipeline expansion. "Natural gas will be supplied to the site from an interconnection with a new lateral to the Great Basin Pipeline system," according to an environmental statement submitted to regulators by Nexus Fulcrum.

In February, Nevada Governor Joe Lombardo sent a letter of support to FERC saying the gas pipeline expansion would support "future economic development, including data centers." Southwest Gas Corp. contributed $250,000 to the Lombardo-supporting Nevada Way PAC on September 30. NV Energy projects that its overall electricity demand could double by 2030 due to an explosion of artificial intelligence and data center growth in Nevada. Great Basin expects the expansion to enter service in November 2028, though the project still requires formal FERC approval before construction can proceed. If approved by state utility regulators, the Switch gas-fired power plant would still need to acquire additional state permits and approvals, including an air quality permit for construction from the Nevada Division of Environmental Protection. The project is expected to use as much as 15 acre-feet of water during construction and 145 acre-feet per year during operation. Other gas pipeline expansions are also being pushed in the West as power-hungry data centers outpace available supply, including a September FERC filing by an Oklahoma-based company that owns one of the largest gas pipeline networks in the Northwest to build a new pipeline between two existing gas transmission lines in Idaho and Nevada.