June 22, 2016 - 4:00 pm
CARSON CITY — The Nevada Public Utilities Commission has determined that MGM Resorts International and Wynn Resorts have complied with requirements permitting them to leave as retail customers of Nevada Power and obtain their own electricity on the wholesale market.
The companies now have 20 days to indicate to the PUC whether they intend to proceed with their exits, and if so, announce the date of their departures.
There are some additional compliance requirements, but the two hotel-casinos would provide that information if and when they actually exit.
Clark Dumont, senior vice president of corporate communications for the MGM, said a final decision on the exit will come by July 11.
“We are a thoughtful company, and we want to make sure we take all aspects of such a decision into consideration,” he said.
The MGM had previously indicated that if the decision is to exit that it will occur around Oct. 1.
The exit applications, filed last year by the two companies, would be the first to occur in years under a law enacted by the 2001 Legislature.
Both companies will have to pay exit fees to Nevada Power for the right to leave. The fees approved by the commission total $86.9 million for MGM and $15.7 million for Wynn. The PUC in December approved the exit applications with fees meant to protect remaining Nevada Power customers. Nevada Power is part of NV Energy.
Both companies in previous filings had indicated they do intend to leave as customers of Nevada Power.
In a letter to the commission filed earlier this year, John McManus, MGM executive vice president, said the company will proceed to exit as a customer.
“It is our objective to reduce MGM’s environmental impact by decreasing the use of energy and aggressively pursuing renewable energy sources,” he said in the letter to the PUC. “Our imperative is heightened by increasing customer demand for environmentally sustainable destinations.
“After careful thought and analysis over many months, we have concluded our objectives are best met by purchasing the energy required to operate our resorts, and serve our customers and guests, from a source other than NV Energy,” the letter said.
MGM operates several major hotels and casinos in Las Vegas, including Aria, Bellagio, Circus Circus, Excalibur, Luxor, Mandalay Bay, the MGM Grand, The Mirage, Monte Carlo, New York-New York and Signature at MGM Grand.
MGM, with its multiple properties, is the largest of Nevada Power’s annual energy sales, at 4.86 percent.
The original intent of the 2001 law was to lessen pressures on electricity rates during an energy crisis that was occurring at the time. Those circumstances no longer exist. Large companies that exit now are expected to be able to negotiate their own favorable rates for power.
The Las Vegas Sands Corp. also filed an exit application that was approved by the PUC, but the company opted not to go forward.
The first application to leave in recent years was filed by the data storage company Switch, but the commission rejected the proposal. Switch later struck a deal with Nevada Power to remain for at least the next three years. Its exit fee was estimated at $27 million.
Contact Sean Whaley at firstname.lastname@example.org or 775-461-3820. Find him on Twitter: @seanw801.