The Nevada System of Higher Education is considering a long-term contract with NV Energy in which the utility would pay the system at least $1.5 million to stay on as bundled customer.
The deal is intended to be a part of NV Energy’s optional pricing program rate, which is expected to be in place by 2022 if approved by the Public Utilities Commission of Nevada. The rate option is open to customers who use large amounts of energy, like government entities and large companies, and would replace their variable energy rate with a fixed rate based on costs from renewable resources.
NV Energy’s goal is to provide a rate “competitive with market options available to such customers,” it said in PUC filings.
If the rate option is approved by the PUC, NV Energy would pay the NSHE’s board an annual payment of $500,000 in 2019, 2020 and 2021, before moving the system to the OPPR plan. According to a briefing paper from the board of regents, the project is estimated to save the NSHE, which oversees eight institutions in the state, about $380,000 on annual energy costs statewide. Costs would likely increase in the northern end of the state and decrease in the south, according to the paper.
If the PUC does not approve the new rate option, NV Energy would pay the board $500,000 in both 2022 and 2023 in addition to the $1.5 million it had already paid over the previous three years.
NV Energy has made similar long-term deals over the past year, including a five-year agreement with the Clark County School District in which the utility would pay $1.5 million annually for at least three years to keep the district as a customer.
These partnerships come after NV Energy faced a growing list of companies working to leave the utility. Six companies left NV Energy between 2005 and 2018, and 10 companies began making moves to leave the utility in 2018. Some of those have since reversed their decision to leave, including Allegiant Stadium and South Point.
The NSHE board of regents will consider this contract at board meetings Thursday and Friday.