Nevada PUC Conditions Casinos’ Exit From Utility on Finding "New" Power Source Not Tied To NV Energy
December 04,2015
The Nevada PUC approved with several significant conditions applications from Wynn Las Vegas, MGM Resorts International and Las Vegas Sands to leave Nevada Power (NV Energy) in favor of competitive supply, but the conditions impose serious obstacles to making any such exit
Aside from millions in exit fees ($87 million for MGM, $24 million for Las Vegas Sands, and $16 million for Wynn), plus other nonbypassable charges, the PUC ordered that the casinos may not source their power from any assets owned or contracted to Nevada Power, due to the requirement that competitive supply be sourced from a "new" resource.
The casinos, "may source energy, capacity, or ancillary services from any generation asset not owned by Nevada Power as long as the energy, capacity, or ancillary services from such a generation asset are not subject to contractual commitments to Nevada Power that make the energy, capacity, or ancillary services unavailable for purchase," the PUC said
The casinos' supplier, "may not supply [the casinos] with the energy from a generation asset owned by Nevada Power nor with the energy from a generation asset that is under such contract to Nevada Power that any of the energy, capacity, or ancillary services from the generation asset are unavailable for purchase."
These conditions implement the statutory requirement that any competitive supplies come from a "new" resource, the PUC said. Such "new" resource must be specifically identified by each company before they exit
The Las Vegas Sun noted that the requirement for a specific "new" source impedes the use of wholesale purchases from marketers which may not source power from specific assets.
Wynn and Sands had selected Constellation for supply, MGM had selected Tenaska.