Proposed orders uphold exit fees for Las Vegas gaming companies

CARSON CITY — Draft orders that will be considered by the Public Utilities Commission on Wednesday reject arguments by three Las Vegas gaming companies that they should be able to pay lower fees to leave Nevada Power as retail customers.

The proposed orders prepared by Commissioner Alaina Burtenshaw, which could be changed, would uphold an earlier decision by the commission requiring the Las Vegas Sands Corp., MGM Resorts International and Wynn Resorts to collectively pay more than $100 million to leave the utility and seek cheaper electricity sources on the wholesale market.

But the proposed orders would clarify what constitutes "new electric resources" that could be bought by the hotel-casino companies should they choose to leave Nevada Power on Feb. 1 as planned.

The fees previously approved by the commission total $86.9 million for MGM, $15.7 million for Wynn and $23.9 million for the Sands, plus recurring fees and charges to recover certain costs that cannot currently be quantified. The exit fees were imposed by the commission to protect remaining Nevada Power customers. Nevada Power is part of NV Energy.

The Sands request for reconsideration of the Dec. 2 order argued that the high fees "effectively denied" its exit application.

But the draft order rejects arguments from all three companies for changes to the exit fee requirements.

The departure of the companies would be the first in many years. The hotel-casinos relied on a 2001 law approved by the Legislature allowing companies to leave as utility customers to lessen pressures on electricity rates during an energy crisis. The circumstances behind its passage no longer exist. Instead, energy prices are increasingly competitive, including natural gas. Large companies that exit are expected to be able to negotiate their own favorable rates for power.

The Review-Journal is owned by a limited liability company controlled by the Adelson family, majority owners of Las Vegas Sands.

— Contact Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Find him on Twitter: @seanw801