Casino companies would pay $131M to leave Nevada Power
CARSON CITY — Nevada Public Utilities Commission staff has estimated that it would cost three major Las Vegas gaming companies nearly $131 million to “exit” Nevada Power Co. as customers and buy their electricity on the open market.
MGM Resorts, Wynn Resorts and Las Vegas Sands Corp. have applications pending with the commission to leave, as provided for under a 2001 measure passed by the Nevada Legislature.
MGM Resorts, the largest of the three, would have to pay just under $90 million to exit Nevada Power as a customer.
The total load that the gaming company would move from bundled retail service represents 4.86 percent over a six-year period of Nevada Power’s annual energy sales, and “therefore, materially impacts (Nevada Power’s) future revenue and increases costs to remaining … customers,” staff said in the analysis.
For Wynn Resorts, the cost is $16.7 million. For Las Vegas Sands Corp., it’s $24 million.
Exit fees are meant to protect remaining customers for the investments made by Nevada Power in recent years to provide electricity to the companies as part of its customer base.
The first application to leave in recent years, filed by the data storage company Switch, was rejected by the commission. Switch later struck a deal with Nevada Power to remain for at least the next three years. Its exit fee was estimated at $27 million.
It will take several weeks for the commission to decide on the applications.
There are concerns that the departure of these large companies could mean higher rates for average utility customers who have no option to leave. Residential customers can opt to participate in the rooftop-solar program under a net metering law. But an effort to raise the cap to allow more people to take advantage of the program was rejected by the Legislature. The cap is projected to be hit by Sunday.
The commission is working on an alternative net metering rate to allow rooftop solar to continue in Nevada. Net metering allows rooftop solar customers to receive a credit from the utility for the excess energy they produce.
The intent of the 2001 measure to exit Nevada Power was originally to alleviate pressure on Nevada Power and Sierra Pacific, now part of NV Energy, during an energy crisis. The circumstances behind its passage no longer exist.
Contact Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Find him on Twitter: @seanw801
