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Nevada passes bill to make exiting NV Energy more difficult for big customers

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Nevada passes bill to make exiting NV Energy more difficult for big customers

The Nevada Legislature late on June 3 overwhelmingly passed a measure that will make choosing alternative power providers more expensive and difficult for large energy customers.

Before the bill's passage, the wave of big customers moving to exit Berkshire Hathaway Energy subsidiary NV Energy Inc.'s service already appeared to have crested, as several energy consumers recently withdrew their applications with state regulators after striking new long-term deals with the utility company.

The Assembly passed Senate Bill 547 in a 40-1 vote June 3, and the Senate, having passed the measure unanimously June 2, enrolled it just before the legislative session adjourned until 2021. Sen. Chris Brooks, D-Las Vegas, introduced the bill May 16, which left casinos and other big electricity users little time to oppose the measure.

The bill specifies that the changes will not apply to large customers that filed exit applications with the Public Utilities Commission before May 16, and a number of pending applications accordingly will continue to be considered under existing law. Further, the bill would not apply to MGM Resorts International, Switch Inc., Wynn Resorts Ltd., Caesars Entertainment Corp. and Peppermill Hotel & Casino, all of which already exited NV Energy's service after their applications were approved.

If signed by the governor, the bill would amend a 2001 law, NRS 704B, that created a process by which large energy customers could apply to leave investor-owned utilities.

The law was created during the Western energy crisis of 2000-2001 to allow a couple of large mining companies to build their own plants during a time when power generating capacity was short and Nevada's utilities were struggling to meet load with overpriced energy contracts, Brooks said during a May 23 joint meeting of the Senate and Assembly growth and infrastructure committees. The law never was intended to allow casinos, data centers and manufacturers to leave the utilities, according to Brooks, who nevertheless stressed that those companies' efforts to find cheaper alternative energy suppliers are perfectly legal and understandable.

The law needs changing, bill's sponsor says

Brooks said the law lacks clarity with respect to which customers are eligible to obtain alternative suppliers and at what cost. As a result, he said, every application to the PUC is the subject of contentious negotiations.

"I believe this many customers leaving the grid under the current law we have is harmful to [other] consumers," Brooks said, noting that the departures increase prices for remaining customers and can put stress on utilities if companies hop back and forth between alternative suppliers and utilities.

The lawmaker said the bill will strengthen the requirements eligible customers must meet before they buy energy from nonutility power suppliers. It also will empower the PUC to establish annual limits on the amount of energy eligible customers may obtain from such suppliers, Brooks added.

Further, the bill will require independent electric suppliers to obtain licenses from the PUC and will make them subject to other state regulatory requirements, such as the need to file annual revenue reports that can be audited by the commission. Departing big energy customers will remain responsible for certain nonenergy costs they previously were paying to the electric utilities, such as for low-income energy assistance, Brooks said.

"This is not meant to completely stop a consumer from access to wholesale energy markets," Brooks said. "This is meant to set parameters, define terms and regulate businesses that are coming into our state to become providers of new electric resources ... so that a future wholesale market has some sort of guidance and guidelines."

In addition to cheaper prices, applicants often said they wanted cleaner energy. Yet, Nevada recently passed a measure sponsored by Brooks that increases the state's renewable energy requirements for NV Energy and other suppliers to 50% by 2030.

Some companies have reconsidered their earlier decisions to leave NV Energy. For instance, South Point Hotel Casino and Spa, Las Vegas Convention and Visitors Authority, Las Vegas Sands Corp., Atlantis Casino Resort Spa and Grand Sierra Resort Corp. withdrew their applications to move to alternative providers after reaching long-term deals with NV Energy. Venetian Casino Resort LLC and Golden Entertainment Inc. have made similar arrangements with the utility, according to The Nevada Independent, a nonprofit news organization that gets funding from NV Energy, casinos and other sources.

The City of Las Vegas decided to stick with NV Energy, too, after Tenaska Power Services, the power marketing affiliate of Tenaska Energy Inc., withdrew its winning bid to provide renewable energy to power the city's government services in place of incumbent NV Energy utilities Nevada Power Co. and Sierra Pacific Power Co.

And LV Stadium Events Company LLC on May 24 sought to suspend its PUC-approved move to an alternative supplier, noting that NV Energy now is offering new services that would be similar to those an independent energy supplier offered to light the Raiders NFL football team's Las Vegas Stadium, which is under construction and will be opened in mid-2020. The stadium company said it needed more time to evaluate NV Energy's offer.