Caesars, MGM Raise Questions About Unfair Power Bills

Don’t make ratepayers foot the bill for power grid company improvement projects. This is the call companies like Caesars and MGM have been making to the state of Nevada in response to rate hikes on power bills instituted by Nevada’s NV Energy. According to lawyers representing the casinos, NV Energy’s impending rate hikes will see consumers (the casinos) pay more than $30 million more per year in order to fund a project known as Greenlink. NV Energy refutes these claims but is hesitating from directly answering the calls for transparency coming from the casinos.

A Red-Hot Debate Ensues

The aforementioned Greenlink project is not necessarily what Las Vegas casino owners are concerned about, but rather how that project is being funded. The project, which is valued at $2.5 billion involves the construction of infrastructure that would make energy generated from the state’s growing number of solar farms viable on a large scale. In other words, Greenlink will carry the electricity from the solar farms to the consumers at large.

Year’s ago, NV Energy promised customers that the Greenlink project would not result in any rate

increases. As you might expect, casinos loved the sound of this project because it meant that current rates would remain stagnant while future rates had the potential to fall thanks to the influx of solar energy to Nevada’s grid. Now, lawyers argue, NV Energy is going back on its word and is increasing rates substantially.

At the crux of the issue is a filing with the Nevada Public Utilities Commission NV Energy made in June. This filing said, in part, that “annual revenue requirement for general rates charged to all classes of electric customers.” Rather than the already-approved 9.4% ROE approved by the state, NV Energy is asking for the approval of a 10.2% rate. This increased mark-up would result in customers paying out more than $30 million.

Capital Expenditures Cited by NV Energy

NV Energy responded to the claims made by Nevada’s casinos quickly by saying the rate increase is due to different factors, with “capital expenditures” being only one of them. In fact, NV Energy went as far to say that these capital expenditures encompass much more than Greenlink alone. “Immaterial” is the word NV Energy used to describe the allegations being made by the state’s casinos.

Before the Public Utilities Commission can approve the ROE increase asked for by NV, the casinos are asking that the exact needs for the increase be explained. So far, NV Energy has denied all allegations levied against them but has not done much in the way of answering the concerns being raised.

If NV Energy can prove to the casinos (and the public) that their ROE increase request is, in fact, legitimate and not simply due to needing increased funding for infrastructure projects, everyone would be able to sleep a little more easily.

Being a monopoly and the only energy provider in the state of Nevada, it is safe to say that the casino giants are up against giants themselves with this battle. On its face this may not seem like an issue worthy of a casino gambler’s attention, but the simple fact of the matter is that increased electricity rates to cool and power Las Vegas casinos will trickle down. This means increased room rates, larger dinner bills, and so on. With that in mind, this is an incredibly important issue for the state with, by far, the most casinos in the US.

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