DEARBORN, Mich.-The largest proposed tires-to-energy project in the U.S. faces an uncertain future following the rejection of its power supply contract. Construction of the 53-megawatt tire-fueled power plant in Moapa, Nev., was expected to begin at the end of last year. But on Dec. 7, the Nevada Public Service Commission nixed Nevada Power's 30-year contract to buy electricity from the CMS Generation Co. plant, citing excessive costs.
A CMS spokesman said the Dearborn-based company was surprised by the commission's decision, and hasn't decided what course of action to take.
CMS, working through the Moapa Energy Limited Partnership, last year acquired the Moapa project plus two smaller, operating tires-to-energy plants in Westley, Calif., and Sterling, Conn., from the defunct Oxford Energy Co.
The original power supply contract between Nevada Power and Oxford's Moapa project terminated when the contract went into default in 1989. CMS negotiated a new 30-year contract that was submitted to the NPSC for approval in early 1993.
Under the contract, Nevada Power agreed to pay Moapa $58.50 per megawatt hour-a figure the commission said is 40 percent higher than current costs.
The commission said the contract contained ``significant'' front-loading that requires Nevada Power to pay the Moapa plant more for power in the contract's early years than later.
The commission also claimed there was evidence of a potential future problem with the supply of scrap tires needed to fuel the plant. With the increasing use of tires in regional cement plants and road paving projects, the Moapa project could have difficulty securing a low-cost supply of tires, the commission said.
CMS has disputed the commission's claim about excessive cost and claims there is an ample supply of tire fuel. The plant would burn about 19 million whole scrap tires annually, collected from a wide region, including California and Texas.
With a 53-megawatt output, the plant could provide energy for 11,700 homes. Nevada Power, which services southern Nevada, said it negotiated the contract to meet future load requirements.
But rejection of the contract doesn't affect the company's ability to meet current requirements, a spokesman said, and at this time, the company is not planning to renegotiate the contract.