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Valley Electric Association won't be giving a $1.5 million rebate to the members this month; last December, rebates averaged $50 per customer.

Chief Executive Officer Tom Husted made that announcement at the VEA annual ambassadors dinner Friday night.

Husted said the cooperative also signed a contract to look into a gas-fired power plant in Nye County and is looking to expand the membership of the board of directors. More than 200 people attended the annual meeting at the Pahrump Nugget Hotel and Gambling Hall.

Increased revenues, increased customer growth and diversifying the power supply enabled Valley Electric to have profit margins of $5 million to $6 million in 2007, Husted said.

However, in light of the $25 million expansion project the cooperative will be embarking upon to expand transmission lines, the board of directors voted not to hand out rebates this year, he said.

"The capital that we have to put forward in this system within the next 12, 18 to 24 months is going to exceed what our (profit) margins are. So we felt it was in our best interest at this point in time to not make a retirement in patronage and to not do a rebate," Husted said.

The new transmission lines and substations will provide redundancy in the system to prevent a repeat of Jan. 13, 2007, what Husted called a date that will live in the minds of all their employees for a long time.

On that date, more than 19,000 customers in the Pahrump area were without power for 15 hours or more after vandals shot out a 238-kilovolt power line between Good Springs and Sandy Valley. That line eventually snapped in the cold.

A new Charleston Park substation expected to open this month will carry a price tag of $2.5 million, he said. That was double what it would have cost two years ago because of increased cost of materials.

In other business, Valley Electric Association signed a contract with Sempre Energy and the Royal Bank of Scotland to look at the possibility of a gas-fired power plant in Nye County, Husted said. That power plant would also be available to serve the needs of customers in Arizona, he said.

Husted noted the proposed power plant in Ely will now be a gas generation plant, instead of coal.

The ambassadors bylaw committee recommended two additional director positions for Pahrump and a new district in Clark County, he said.

"District One, which is Pahrump, currently has 93 percent of all membership," Husted said. Pahrump has 15,428 of the 16,537 members in the cooperative, according to VEA statistics.

A separate district for Sandy Valley, Mountain Springs and Trout Canyon would comprise 744 members, or 4.5 percent of the cooperative.

Four directors currently serve on the VEA board from Fish Lake Valley, Beatty, Amargosa Valley and Pahrump.

Directors would also serve four year terms under the proposed bylaw changes, instead of two years, Husted said.

"How long does it take to get up to speed in a business like this? Two years," he said.

Dave Sweetman, a customer from Fish Lake Valley who has wind turbines and solar panels, asked if VEA could take advantage of a proposal by Nevada Power Company to build 215 miles of transmission line to connect northern and southern Nevada. Husted said VEA has proposed spending $3.2 million to upgrade service in Fish Lake Valley in 2008.

Husted also said cooperative officials signed a contract with Powerex Corporation last summer, a wholly-owned subsidiary of British Columbia Hydro, that he said will give VEA rate stability for 64 percent of the cost of doing business in 2008. VEA uses hydroelectric power for 18 percent of its supply, the rest comes from gas-fired power plants.

"This year sales are up 5.3 percent and that's year-to-date over '06. So with sales up, revenues are up. Your cooperative does $50 million in total revenues in business each year. Our revenues are up 6 percent year-to-date, or $2.4 million over last year," Husted said.

"We hear a lot about how things are slowing down and they are slowing down. We slowed down to 4 percent. That is still double the national average," he said.

Valley Electric hired the Portland, Ore. law firm of Davison Van Cleve to help in dealing with power contracts, Husted said. That firm is more experienced in dealing with those matters, saving the cooperative money, he said.

Valley Electric also joined the Arizona Electric Power Cooperative, giving VEA "a whole new world of buyers and sellers" to deal with.

"So if we needed additional power for an hour, instead of being stuck with one company and one market, we now have multiple companies we could do business with, whether we're buying or selling," Husted said.

Nevada utilities joined in the first-ever meeting together this year, convened by Gov. Jim Gibbons, he said.

"All the utilities, they have the same needs. So why are we being islands?" Husted asked. "It's all about relationships, whether it's with your neighboring utilities or whether it's with your members."

VEA customer Lewis Beaver asked why the $15 facility charge levied after the closure of the Bullfrog Mine in Beatty in 1999 was never repealed.

Husted said he wasn't here back then, but said the Bullfrog Mine was a huge customer, that subsidized the rest of the cooperative.

"Whether you use electricity or not, the co-op has expense. We have lines that go to serve you," he said. "If you all go home tonight, shut off the breakers to your home, you wouldn't use any electricity. But our cost, whether you use any (power) or not, are still there."