NV Energy has been the main power supplier for the top casino operators in Las Vegas including the Las Vegas Sands Corp, Station Casinos, MGM Resorts and Wynn Resorts. MGM and Wynn received permission from the utilities commission back in January 2016 to part ways to NV Energy and since then, employees from both companies have been working hard to make a seamless transition from NV Energy to a new power supplier.
Both Wynn Resorts and MGM Resorts have ended their relationship with NV Energy from September 30 and are now looking for an alternate power provider. Both casino providers decided that it was in their best interest to buy energy on the open market as it would help bring down their costs. Electricity is one of the biggest overhead costs for casino resorts. Wynn Resorts director of energy procurement Erik Hansen stated that for the casino, nothing will change in terms of functionality and reliability at the front end, but overall the company will end up saving money as it was always cheaper to buy power wholesale.
Although Wynn and MGM have stopped purchasing energy from NV Energy, they will continue to use NV Energy for backup services and receiving power through the grid. During the early 2000s, MGM Mirage, Fashion Show mall and Station Casinos all sought permission to part ways with NV Energy but in the end decided to stay. Las Vegas Sands Corp also wanted to terminate its partnership with NV Energy but abandoned that plan and ended up supporting and funding the Energy Choice Initiative, which was a ballot to restructure the electricity market in Nevada. This initiative will create an open power market by 2020 and end NV Energy’s monopoly on the energy market in the state.
NV Energy is expected to lose around 6 percent of its customer base with the departure of MGM and Wynn Resorts. Since this is a significant decrease in NV Energy’s overall sales, the utility commission required Wynn Resorts to pay around $15 million and MGM Resorts around $87 million in impact fees in order to safeguard ratepayers from absorbing the costs of the two exits. The Public Utilities Commission will also monitor recurring charges for the next six years to continue to protect the interest of ratepayers.
Even though MGM and Wynn Resorts have to pay such high costs to exit NV Energy, both companies believe that it will be good for business in the long run as wholesale prices of energy are lower and natural gas is cheaper.
In a statement, Cindy Ortega, senior vice president and chief sustainability officer at MGM said “It’s part of being able to control what your supply looks like and be able to take advantage of opportunities without have a third-party as an intermediary. Innovation and technological advancement is faster than regulations and monopolies can usually move.”
MGM is also looking at the option of partnering with large scale solar companies and the possibility of using energy-storage batteries.