Las Vegas Convention Center operator considers leaving NV Energy

Las Vegas Convention Center operator considers leaving NV Energy

A design rendering, released recently, shows how the Las Vegas Convention Center expansion is expected to look on completion. (tvsdesign/Design Las Vegas)

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The Las Vegas Convention and Visitors Authority is looking for a better energy deal.

The authority’s board Tuesday unanimously approved permitting CEO Steve Hill to investigate ways to reduce energy costs, either through NV Energy or a different provider.

Hill said last week that the company hopes to save money and use more renewable resources through an alternative energy plan.

Exit fee

The LVCVA’s departure from NV Energy would include the 3.2 million-square-foot Las Vegas Convention Center and its $935 million, 1.4 million-square-foot expansion, scheduled to be completed by January 2021.

Hill said that because NV Energy has already accounted for the convention center’s expansion in its planning, the LVCVA will not dispute an exit fee, a sum of money that the Public Utilities Commission and NV Energy seeks because they claim companies that exit the utility place increased costs on remaining customers.

Other companies’ exits have come with large price tags; MGM Resorts, which left NV Energy in 2016, paid $86.9 million in exit fees, and Caesars Entertainment was assigned $47.5 million in exit fees in 2018.

The PUC determines the exit fees on a case-by-case basis to make sure entities’ departures aren’t “contrary to public interest,” according to filings. PUC filings show the commission looks at factors like estimated energy load and how much it contributes to NV Energy’s annual energy sales.

At least one company has explored leaving NV Energy and then decided against it because it considered the exit fee to be excessive.

Impact

It’s hard to say what the convention center’s departure would look like for NV Energy, especially because the authority has already agreed to pay an exit fee, according to local economist John Restrepo.

“They’re looking for price stability and controlling their own destiny,” said the principal of Las Vegas-based RCG Economics. “It’s no different than the big casinos (that left).”

In 2018, 10 companies took action to leave NV Energy, including casino companies Station Casinos Inc., Boyd Gaming Corp., Atlantis Casino Resort Spa, South Point, Grand Sierra Resort and SLS Las Vegas. Others, like MGM Resorts International, Caesars Entertainment Corp. and Wynn Resorts Ltd., are already using alternative providers.

“An interesting pattern has developed along these large users deciding to pay an exit fee and move on,” Restrepo said. “It seems more a decision philosophically, with most of these guys moving to clean energy. … What I don’t know is the long-term effects on NV Energy and the rest of their customers.”

Guy Snow, president of Solar NV, a local chapter of the American Solar Energy Society nonprofit solar advocacy group, believes an exit fee will keep consumers from seeing any effects if the LVCVA does leave NV Energy.

Snow said he’s unsure why the LVCVA would want to depart from the utility.

“I’m not sure what their thought process is there,” he said. “I don’t see large savings. I get this feeling that in the long run, it’s not going to be extraordinary.”

NV Energy still an option

The board also gave Hill approval to negotiate a new energy plan with NV Energy. The LVCVA hopes the talks would let the authority reduce energy costs and use more renewable resources.

NV Energy spokeswoman Jennifer Schuricht said Friday the company will work with the LVCVA “to offer solutions in order to keep them as a fully bundled customer.”

Hill said he will circle back with the board in about five months after the plans are investigated and reviewed by the PUC.

Approval to investigate both options were approved unanimously by the board in a 12-0 vote with two absent.

Contact Bailey Schulz at bschulz@reviewjournal.com or 702-383-0233. Follow @bailey_schulz on Twitter.

A first

The Las Vegas Convention and Visitors Authority is on track to be the first governmental entity to file to leave NV Energy through Nevada Revised Statute 704B.

It “isn’t a for-profit entity, but they are responsible to the taxpayers,” said John Restrepo, principal of Las Vegas-based RCG Economics. “They’re looking for ways they can save money and get reliable service.”

Only select governmental entities and a nongovernmental commercial or industrial end-user with an average annual load of at least 1 megawatt are eligible to leave through this statute.

The LVCVA, which operates the Las Vegas Convention Center and promotes tourism in the region and is funded largely by hotel room taxes, claims it meets that requirement.

After leaving, these entities often still pay transmission and distribution fees to NV Energy.

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