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NV Energy to pay Nev. county $1.1M/year to remain the utility's customer

In keeping with a recent trend of paying local government agencies in Nevada to remain bundled service customers, NV Energy Inc. has agreed to pay Clark County $1.1 million per year to dissuade the county from choosing an independent energy supplier.

The Clark County Board of Commissioners on Aug. 6 unanimously agreed to authorize its chairman to sign a customer services agreement under which NV Energy subsidiary Nevada Power Co. will provide incentives for the local government to remain a full-service electric customer of the utility.

Pursuant to the agreement, Clark County, which is home to many hotels and casinos that are located on the Las Vegas Strip but fall outside the city limits, would continue to buy energy from the utility for a five-year period.

In a rate case to be filed June 1, 2020, NV Energy will ask the PUC for approval of a $120 million reduction in revenues to benefit customers, according to the agreement. If the case results in revenue reductions greater than $120 million, the utility and county said the incentives for 2022 and 2023 will be reduced by an amount equal to the benefit the customer receives from reduced retail rates beyond the requested rate cut.

Should the PUC sign off on the deal, the agreement with Clark County would follow similar contracts the utility has entered into with the Clark County School District; the City of Henderson, Nev.; and the Las Vegas Convention and Visitors Authority. The terms of NV Energy's agreement with the school district include the payment of $1.5 million, while the city is getting $250,000 and the convention authority is receiving $650,000, according to The Nevada Independent, a nonprofit news organization that has disclosed it received $200,000 from NV Energy.

The City of Las Vegas previously moved to buy power from an independent supplier but ultimately decided to work with NV Energy after the independent supplier, Tenaska Power Services, declined to continue negotiations.

NV Energy has been fighting to keep both existing and potential large energy customers from seeking alternative suppliers. Nevada Power recently lost a petition to require a liquid hydrogen manufacturer to pay an $11.25 million impact fee in order to take service from an independent electricity supplier.

However, the Nevada Legislature in June approved a measure to make choosing alternative suppliers more expensive and difficult for customers who in recent years have taken advantage of a 2001 law — NRS 704B — that allows large energy customers to obtain new energy supplies.

In addition to its agreements with local government agencies, NV Energy has made similar long-term deals with several other customers, including individual hotels and casinos, but the financial terms of those agreements have not been disclosed, according to The Nevada Independent.

As part of their deal, NV Energy and Clark County also agreed to negotiate an optional pricing program tariff under which the utility would set energy rates based on new large-scale solar projects for which the Berkshire Hathaway Energy subsidiary has secured power purchase agreements in order to meet the state's new renewable portfolio standard of 50% by 2030 and to meet the utility's own objectives.