Wednesday, Aug. 19, 2015 | 7:30 p.m.
Three casino companies looking to purchase and create power without NV Energy will have to pay millions to do so, according to filings with the Public Utilities Commission.
The PUC’s regulatory operations staff submitted its exit fee estimates Tuesday for MGM Resorts International, Las Vegas Sands and Wynn Resorts. The three fees would total more than $128 million with MGM paying $88.2 million, Las Vegas Sands paying $23.9 million and Wynn paying $16.6 million.
The fee is a way to protect NV Energy’s remaining ratepayers from having to pay more in lieu of an exit by some of the power company’s most lucrative customers.
The three casinos are 7 percent of the utility’s customer base. The exit fees weigh the cost of new power plants, maintenance, commodity prices, fees and other factors the utility had previously forecasted with the casinos as part of its customer base.
The regulatory staff, which acts separately from the three-member commission, listed as significant cost factors for the utility the $750 million renovation four years ago to the Harry Allen natural gas plant, new solar projects and the acquisition of existing power facilities.
The casinos want to leave the utility in an effort to capitalize on the nation’s low natural gas prices and growing customer demand for Las Vegas Strip facilities powered by renewable energy.
They are harnessing a 2001 law — dubbed as 704b — that says large-scale consumers can leave if they bring new generation to the grid, receive PUC approve and pay an exit fee.
The law passed at a time when the power company purchased most of its electricity from other companies and subjected itself to the volatile spot market that saw constant fluctuations in price. Now the company owns a majority of power plants and has stabilized costs for ratepayers. The utility has also transitioned from power predominantly powered by coal to one that runs on 60 percent natural gas and nearly 20 percent renewables.
The casinos' push follows the failed effort by Las Vegas tech company Switch to power its data centers with 100 percent renewable energy.
Switch fought the utility company for nearly eight months until the PUC denied its exit from the utility. Switch and NV Energy ultimately reached a deal in July that guarantees the tech company — for a premium price — emission-free energy with unlimited access to a 100-megawatt solar array and the power company’s other renewable sources.
While the PUC’s decision was a blow for Switch, it signaled that NV Energy was willing to cater to company demands for renewable energy and willing to make concessions with its most valuable customers.
The casino companies and NV Energy will submit responses to the regulatory staff’s suggestions within the next month.
The three commissioners will hold hearings in October before they vote to approve the proposed casino exits.
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