80°F
weather icon Clear

Data center Switch files lawsuit against Nevada PUC

Updated April 9, 2019 - 5:26 pm

Switch has filed a lawsuit against the Public Utilities Commission of Nevada, alleging the agency is retaliating against the data center company for leaving NV Energy and supporting the November ballot’s Question 3, which would have opened the state’s energy market to competition.

The lawsuit comes after the PUC regulatory operations staff filed a petition on March 22 contending that Switch operates as a utility and should be regulated by the commission.

“The advisory petition has no merit and would not have been filed had Switch ‘played ball’ with the PUCN and its relationship with NV Energy,” Switch said in the lawsuit.

Hitting a nerve

Switch left NV Energy in 2017 in search of a provider that would allow it to power its Southern Nevada data center facilities with 100 percent renewables. Since then, other major entities such as Caesars Entertainment and the MSG Sphere Las Vegas have left or started the process of leaving.

Even after it unbundled from NV Energy, Switch continued to advocate for alternative energy options in Nevada through Question 3 — also known as the Energy Choice Initiative — by investing $12.4 million into a pro-Question 3 PAC.

Meanwhile, NV Energy invested more than $62 million into the Coalition to Defeat Question 3 PAC, and the PUC issued a report in April 2018 saying that Question 3, if passed, would increase power bills for most Nevadans for roughly a decade. The campaign supporting the initiative called the report “one-sided” and said it was meant to protect NV Energy’s monopoly.

The PUC said in the initiative’s final report it “removes the authority of the PUCN.” The question was defeated in the November election.

“Switch has — and continues to — hit a nerve within the PUCN,” the company said in the lawsuit, which was filed Monday. The PUCN has a “desire to penalize Switch and to teach Switch a lesson.”

Switch also said in the lawsuit — which names the PUC, its regulatory operations staff and PUC staff counsel Tamara Cordova as defendants — that it has criticized the commission’s operations and its “too-cozy relationship” with NV Energy, which in turn marked it as “hostile” to the commission and its staff.

Spokespeople for Switch, the PUC and NV Energy said they don’t provide comment on pending litigation.

Defining a utility

The commission staff’s petition contended that Switch acts as a public utility because it said the data center company is re-selling electricity at a marked-up price. If Switch is deemed to be operating as a utility, it would be regulated by the PUC much like NV Energy and Southwest Gas Corp. Switch would be subject to investigations and rulemaking and would have to receive approval before any rate changes.

“Switch’s customers are not being protected as intended by the Legislature with respect to the rates they are being charged,” the commission staff said in the petition. “It is the staff’s understanding and belief that Switch is making a profit off of the electricity that it is re-selling its customers.”

Switch argued that it is not a utility because it sells uptime — the amount of time that a server stays up and running — not power, as the PUC staff claims in its filings.

And while the commission staff said Switch provides services to the public at large, Switch said its services aren’t available to general electric power consumers. Instead, it offers business-to-business technology licenses.

“The Nevada Legislature did not give the PUCN the power to regulate data enters,” Switch said in the lawsuit. “The PUCN and its regulatory staff are seeking to act well outside the lane approved by the Nevada Legislature.”

Switch said the petition was full of “false and defamatory statements” made to hurt Switch and its relations with customers and investors.

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

Don't miss the big stories. Like us on Facebook.
Politics Videos
Tomi Lahren Speaks at UNLV - VIDEO
Fox News contributor and UNLV alumna Tomi Lahren returned to campus Wednesday night for a speech, titled “Stay Triggered,” that drew an auditorium of supporters as well as a group of protesters outside. (James Schaeffer/Las Vegas Review-Journal)
Bernie Sanders released from Las Vegas hospital - VIDEO
Sen. Bernie Sanders, I-Vt., issues a statement after he was released from Desert Springs Hospital Medical Center on Friday, Oct. 4, 2019, after suffering a heart attack earlier in the week. (Bernie Sanders via Twitter)
Democratic presidential candidates speak on impeachment - VIDEO
Democratic presidential candidates attending the March for Our Lives/Giffords Gun Safety Forum in Las Vegas comment on possible impeachment proceedings. (Las Vegas Review-Journal)
Joe Biden Las Vegas Rally Highlights - Video
2020 presidential candidate, Joe Biden, came to Las Vegas to talk guns, climate change and the Ukranian-Trump scandal. Biden was interrupted by a protestor who sat amongst supporters at the rally and continued with his speech. (Angus Kelly & James Schaeffer / Las Vegas Review-Journal)
Joe Biden comments on Trump and his campaign efforts in Nevada - Video
After an impeachment inquiry was opened on Donald Trump, Joe Biden talks with Review-Journal politics reporter Rory Appleton about Trump and his campaign in Nevada. (Angus Kelly & James Schaeffer / Las Vegas Review-Journal)
Bernie Sanders Unveils Affordable Housing Plan - Video
Bernie Sanders sits down with the Las Vegas Review-Journal to talk about his new affordable housing plan he unveiled at Plumbers & Pipefitters.
Jim Marchant talks gun control and Dreamers - Video
Republican Candidate for District 4 Jim Marchant talks about gun control and immigration policies. (Las Vegas Review-Journal)
Hurricanes, Gender, and Science in the Press
Imagine if the mainstream media’s current hurricane-sized obsession with scientific accuracy applied to gender.
Cory Booker on college tuition and minimum wage
Cory Booker talks on the RJ Politics podcast about college debt, informing workers about their rights and livable wages.
Nevada Politics Today: Teacher raises - VIDEO
Jason Goudie, the chief financial officer for the Clark County School District, talks about teacher pay and raises. (Las Vegas Review-Journal)
Media's Double Standard On Incitement And Trump - Video
Over the weekend, an Elizabeth Warren-supporting socialist who opposed gun violence used a rifle to commit a mass murder in Dayton, Ohio. The media has downplayed that aspect of the tragedy.
Project Our Care Tour Kicks Off In Las Vegas
U.S. Rep. Dina Titus joined health care advocates and local residents as part of Protect Our Care’s nationwide bus tour kick off in Las Vegas on Monday, August 5, 2019. (Mat Luschek / Review-Journal)
Bernie Sanders talks about guns, response to El Paso shooting
Sen. Bernie Sanders spoke about his response and continued policy ideas about guns and gun control to the Review-Journal after a panel of other topics. (Rachel Aston/Las Vegas Review-Journal)
Pete Buttigieg On Gun Control And Climate Change - Video
Pete Buttigieg talks about his campaign for the 2020 election and how Nevada is a vision of what the future can be.
Beto O'Rourke speaks in Las Vegas
Presidential candidate Beto O'Rourke spoke to supporters at the East Las Vegas Community Center in Las Vegas, Thursday, Aug. 2, 2019. (Las Vegas Review-Journal)
THE LATEST