Switch stays with NV Energy, drawn by renewable power

CARSON CITY —€” The data storage company Switch will stay with NV Energy and not seek to leave to find its own electricity on the open market, the utility company reported Tuesday.

The agreement, filed with the Nevada Public Utilities Commission on Friday, will allow Switch‘s expanding business in Southern Nevada to be served with 100 percent renewable energy. Switch will remain a customer of NV Energy. The agreement has been signed by Switch, NV Energy and the PUC regulatory staff.

As part of the settlement, which requires PUC approval, Switch‘s growing energy load will be served from a new 100-megawatt solar photovoltaic project to be constructed by First Solar, north of Las Vegas. The new solar facility, to go into commercial operation in late 2016 and be named Switch Station, will deliver renewable energy to the NV Energy transmission and distribution grid.

Switch will pay a premium for 100 percent green energy under what is termed the NV Green Energy Rider tariff. In addition, Switch will receive service under NV Energy‘€™s High Load Factor tariff schedule, which was developed and approved by the PUC in 2014. This rate schedule recognizes the unique attributes of companies such as Switch that run their facilities at steady, higher demands through the course of the day and more importantly all night.

"My goal for a number of years has been to move Switch, and the customers we serve through our full service data and technology centers in Nevada, to 100 percent green, renewable energy," said Rob Roy, Switch founder and CEO. "Unfortunately, that program was not made available under the previous management at NV Energy. It is the primary reason we chose to look last year at options outside the NV Energy system.

"While we may have been able to find energy in the market at a better price, I am pleased with what NV Energy has delivered as a solution to our needs," he said. "We are especially pleased to be creating added value for NV Energy’s other customers by our monetization of the energy credits from the new Switch station. The money we are paying for this renewable energy will flow back to and directly benefit all Southern Nevada customers of NV Energy."

"Rob Roy and his team at Switch have built a world-class technology and innovation business that we are proud to partner with," said Paul Caudill, NV Energy President and CEO. "Our discussions about how best to serve Switch‘€™s exciting, growing business with clean, renewable energy began last year. It is important to note that the new grid-tied Switch Station will be constructed and operated at costs that are being recognized industrywide as among the lowest seen in the United States."

Switch was the first large Nevada company in recent years to seek to leave Nevada Power, doing business as NV Energy, and seek its own electricity on the wholesale market. The PUC however, in a vote in June, rejected the exit application even with a $27 million "exit" fee to cover the utility‘s infrastructure costs to provide the company with its energy needs.

It is unclear what the Switch decision will mean for other companies who have filed applications to leave the utility.

Three major gaming companies, Wynn Las Vegas, MGM Resorts International and the Las Vegas Sands Corp., have also filed applications to leave Nevada Power and seek their own energy supplies on the open market. A fourth company, Caesars, has filed a notice to leave as well.

The applications are on hold while the PUC devises a new formula to ensure there is a formula in place to protect existing customers who remain with the utility. The gaming companies consume about 370 megawatts of electricity at the time of year that Nevada’s Power electricity demand is at its highest level, known as "coincident peak." This peak level is important for the utility because it has to plan for the amount of electricity needed at peak demand.

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