MGM, Wynn - Smart Energy Decisions

Commercial, Energy Procurement, Utilities, Sourcing Renewables  -  October 4, 2016

MGM, Wynn Resorts cease purchasing utility power

Following more than a yearlong regulatory process, MGM Resorts International and Wynn Resorts have ceased purchasing power from their utility, NV Energy

The two corporations, which believe the breakup will allow them to more economically pursue renewable energy to power their operations, made the breakup official Oct. 1, the Las Vegas Sun reported. With their electric loads combined, MGM and Wynne's Las Vegas reports make up about 6% of NV Energy's customer base; the move is expected to create a significant decrease in power sales for the Berkshire Hathaway Inc. subsidiary. 

Both MGM and Wynn have signed contracts with outside power providers, Tenaska Power Services Co. and Exelon Corp., respectively, according to the filings, but will maintain use of NV Energy wires for electricity deliveries.The Nevada utility commission in 2015 granted approval for MGM and Wynn, alongside 

The Nevada utility commission in 2015 granted approval for MGM and Wynn, alongside Las Vegas Sands Corp.,  to stop buying electricity from NV Energy if they paid combined exit fees of about $127 million. According to the newspaper, that total shook out to about $87 million for MGM and $15 million for Wynne. 

Sands Las Vegas ultimately chose not to terminate their power sales with the utility, likely due to the millions in fees assessed by the utility commission associated with their departure. The Sun reported that Las Vegas Sands "instead supported and helped fund the Energy Choice Initiative, a ballot measure to restructure Nevada's electricity market. It would create an open market and end NV Energy’s monopoly on power supply by the early 2020s."

Power and utility industry observers have for years argued that the evolving needs of large electricity customers would drive them to leave utilities that can't meet them, particularly as distributed energy technologies advance and demand for renewable energy sources continues to grow. The news puts a face on the threat such actions may pose to utility revenues.

Earlier in the year, it was reported that another Nevada casino — the Peppermill Resort Spa Casino in Reno — is also asking state regulators for permission to stop buying power from the company, and Las Vegas-based data center company Switch has filed suit against NV Energy and the Nevada Public Utilities Commission alleging deceptive trade practices, fraud, civil conspiracy, conspiracy to commit fraud, negligence and gross negligence related to the PUC's decision to reject Switch's request to stop buying power from the utility.  

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