Sponsorship deals create friction between NV Energy, consumer group

Nevada’s consumer advocate agency and its largest electric utility are fighting over sponsorship deals made by the utility and what information should be shared about them.

NV Energy and the Bureau of Consumer Protection have spent this week going back and forth in filings made to the Public Utilities Commission over costs related to sponsorships the utility incurred in 2022 and information about what those sponsorships covered.

A filing made Monday by the BCP with testimony from David Chairez, the regulatory manager for the bureau, stated that NV Energy sought to recover costs from customers for tens of thousands of dollars spent on sponsorship deals with major events and sports teams which included perks such as free merchandise, Zamboni rides and season tickets as well as VIP tickets. This testimony was quickly pulled from the PUC website on Monday and a redacted version was posted on Thursday.

The reason the testimony was pulled was because it included statements that NV Energy considered confidential about its request to recover $197,500 in sponsorship costs in 2022 in regards to perks provided to the utility for sponsorship costs.

The Las Vegas Review-Journal was able to view the original testimony and the sponsorship costs called into question were:

— $75,000 to the Las Vegas Aviators and the Las Vegas Ballpark and NV Energy got the perks of multiple season tickets and a event that included 100 tickets. The BCP said the total sponsorship costs to these organizations was $125,000.

— $62,500 to the Henderson Silver Knights, Dollar Loan Center and America First Center and NV Energy got the perks of multiple season tickets, Zamboni rides and autographed merchandise. The BCP said the total sponsorship costs to these organizations was $62,500, a claim that is disputed by NV Energy.

— $50,000 to the Raiders and Allegiant Stadium which were said to include the perks of VIP Club tickets, parking passes, player appearances and merchandise credits. The BCP said the total sponsorship costs to these organizations was $250,000.

— $10,000 to the Clark County Fair and Rodeo, which the BCP said was the total sponsorship costs for this event.

No specific details about the perks such as the amount of season tickets granted were included in Chairez’s original testimony. The sponsorship expenses the BCP is seeking to stop NV Energy from recovering from its customers is just a portion of its total sponsorships, with other portions of those costs to be covered by the utility itself.

NV Energy disputed they were seeking to recover sponsorship costs related to perks from customers but rather those costs it seeks to recover are related to its PowerShift programs, which is a set of programs designed to reduce customers’ energy costs.

“To be clear, NV Energy is not requesting recovery for the cost of sponsorships we have done with the Las Vegas Raiders, the Stanley Cup Champion Vegas Golden Knights organization, or the Las Vegas Aviators which have been called into question, nor are we asking for customers to pay for tickets to attend sponsored events,” NV Energy’s Media Relations Manager Meghin Delaney said in a emailed statement. “Tickets to sponsored events and allowances for merchandise or other sponsor benefits are paid for by the company itself – not customers.”

In general utilities are allowed to recover sponsorship and advertising costs from customers if those costs are for the public benefit that promote cost-saving programs or charitable donations while costs associated with promoting the brand or public perception of a utility should be paid entirely by that utility, said Tyson Slocum, the energy program director for the national consumer advocacy group Public Citizen. He said it’s not uncommon for utilities to try to get customers to pay for general sponsorship costs.

“Of course if you are a utility you’re going to try and recover as much as you can from ratepayers,” Slocum said.

Chairez called into question the prudence of advertising the PowerShift programs at events that can be attended by people that don’t live in Southern Nevada and aren’t NV Energy customers as well as the effectiveness of educating the public on cost saving programs through sponsorships of events.

“What percentage of (NV Energy’s Southern Nevada) 886,143 residential customers in 2022 attended a Henderson Silver Knights Game?” Chairez said. “In this regard, it is important to note that a family of four attending a hockey game is only one customer.”

Slocum agreed that there are better ways to promote the PowerShift Program than sponsoring local teams and events.

“It doesn’t seem very effective, since the utility has direct access to its customers,” he said. “They have a variety of free communication methods with customers, they can send information along with bills or send out emails or texts.”

Confidentiality concerns

NV Energy stated the BCP revealed confidential information on those sponsorship deals in the testimony.

“The BCP does not have the authority to unilaterally determine whether material is confidential or not, publicly disclose the material, and subsequently announce its objection to confidentiality designations,” NV Energy wrote in a motion to redact Chairez’s testimony.

The company said that a protective agreement entered into by NV Energy and the BCP outlines that if the BCP wants to reveal confidential information in public testimony to the PUC, it must first notify the company. NV Energy said it wasn’t notified prior to Chairez’s original testimony being posted on Monday.

Slocum said that it is common for utility companies to make any information that could be seen negatively in the public eye confidential. But he said that information on sponsorships should be public since it doesn’t include trade secrets or information about the state of the utility’s infrastructure.

“If this is money ratepayers have initially funded with the triple-A baseball team or other teams then there is no justification that this information should be privileged,” he said.

Nevada’s consumer advocate Ernest Figueroa defended the information shared in the original testimony and said in a PUC filing the BCP “strongly disagrees” with NV Energy’s claims the BCP breached confidentiality.

“The BCP timely filed Mr. Chairez’s testimony without redactions on July 24, 2023 believing that the entirety of the testimony was confidential as it was Mr. Chairez’s expert opinion and, therefore, BCP’s work product,” wrote Nevada’s consumer advocate, Ernest Figueroa.

The BCP did post a redacted version of Chairez’s testimony, although it requested the PUC to rule that the BCP didn’t breach confidentiality and refile Chairez’s testimony.

Contact Sean Hemmersmeier at shemmersmeier@reviewjournal.com. or @seanhemmers34 on Twitter.