04 Apr NV Energy to request $100M in rate cuts from PUC
NV Energy plans next year to request that the Nevada Public Utilities Commission cut rates by more than $100 million, the monopoly utility’s chief executive said Wednesday after a competitor withdrew its proposal to provide power to Las Vegas.
Speaking in front of the Las Vegas City Council, NV Energy President and CEO Doug Cannon said the company would be filing a general rate case to the PUC in 2020, requesting the rate cuts. Cannon also committed to continuing to work with the city on an optional pricing program to lower energy costs and keep the city a leader in environmental and sustainability fields.
The promises came as Texas-based Tenaska Power Services, which is viewed as a direct competitor for city services, pulled its application earlier in the morning. The announcement drew loud applause from a large contingent of NV Energy union members and other stakeholders who wore blue and green shirts.
David Brown, a consultant representing Tenaska on behalf of Land Development Associates, said “it became evident yesterday” that the company would be “better served” walking away, but he did not offer specifics. He said Tenaska’s proposal was competitive.
The pledge by NV Energy to reduce costs and the withdrawal by Tenaska ends a precarious period for the utility after city leaders considered joining a growing number of entities that have chosen to buy electricity from other companies.
Twenty Nevadan entities have taken steps to leave the utility for another energy provider since 2005, with various entities searching for lower costs and more renewable resources.
A year after NV Energy successfully spent more than $63 million to preserve its monopoly in Nevada by defeating a 2018 ballot measure known as Question 3, three entities — energy company Air Liquide Hydrogen Energy, the Las Vegas Convention and Visitors Authority and The Cosmopolitan of Las Vegas — have formally submitted documents to begin the process of departing.
Leaving NV Energy comes with a hefty price tag that the Public Utilities Commission and NV Energy say is meant to negate any negative impacts on remaining ratepayers. MGM Resorts International, which left NV Energy in 2016, paid $86.9 million in exit fees, and Caesars Entertainment Corp. was assigned $47.5 million in exit fees in 2018.
On Wednesday, city officials said the competition was fueled by its desire to lower costs, even as officials reaffirmed their commitment to NV Energy and the partnership that has lasted more than 100 years.
“I think what we have all felt over these years is that you’re family. We know this is home, home for us,” newly re-elected Mayor Carolyn Goodman said. “But as we pull together all the time and do the best we can do, it will only make us stronger and make us more reputable in building a world-class city.”
Las Vegas already has applied for the next version of NV Energy’s renewable energy rate option, NV Energy Optional Pricing Program Rate, expected to offer more than a million megawatt hours of renewable energy resources at reduced costs to large commercial customers including casinos and governments.
City Manager Scott Adams said the intent is to continue working with NV Energy through the PUC process on the new program to achieve a better deal on energy costs.
The city is one of the largest in the world to claim operations fully powered by renewable energy, according to Tom Perrigo, the city’s executive director of community development.
It has been achieved, he noted, through strategic investments over the past decade, leading to a reduction in annual energy costs from $15 million in 2008 to $8.4 million in fiscal year 2017.
NV Energy’s first version of its renewable energy rate option, announced in 2015, has been part of that strategy and costs the city $228,000 yearly, according to Perrigo.
“But that was the first step in what is a much broader journey, a much broader partnership,” Cannon said.
Contact Shea Johnson at email@example.com or 702-383-0272. Follow @Shea_LVRJ on Twitter.