Nevada Casinos Criticize NV Energy’s Proposed Rate Increase
Posted on: October 17, 2023, 08:49h.
Last updated on: October 17, 2023, 08:49h.
Nevada casinos are voicing their concerns over NV Energy’s proposal to increase their “return on equity” (ROE) rates. The casinos argue that this increase will result in higher costs for ratepayers.
NV Energy is currently constructing Greenlink Nevada, a $2.5 billion solar energy transmission infrastructure system. This initiative aims to increase the state’s reliance on renewable energy sources and reduce its carbon footprint.
Once completed, Greenlink will not only enhance the state’s electric reliability, but also transmit electricity generated from various renewable sources including solar, wind, geothermal, biomass, and natural gas.
When NV Energy initially proposed Greenlink in 2020, the company assured the public that only its investors and bondholders would fund the project.
However, NV Energy is now seeking approval from the Nevada Public Utilities Commission to increase its ROE rate from 9.4% to 10.2%. This increase is crucial for attracting more investors and raising additional capital for the company.
Casinos Express Disapproval
Leading casinos such as MGM Resorts, Caesars Entertainment, Wynn Resorts, Boyd Gaming, and Hard Rock International have submitted opinions to the utilities commission, criticizing NV Energy for potentially going back on their word.
The casinos’ attorneys argue that NV Energy must provide detailed explanations for seeking an increased ROE rate. While NV Energy claims that the increase is unrelated to Greenlink, the casinos question the company’s explanation.
In their brief, Caesars and MGM state, “Substantial evidence in the record demonstrates that the Utility’s proposed increases are not the result of prudent business management, responsible decision-making, sound fiscal strategies, or efficient operations.”
The proposed increase in ROE would generate approximately $34 million in additional revenue for NV Energy each year. The casinos, who rely heavily on electricity for their properties on the Strip, argue that NV Energy failed to take advantage of near-zero interest rates in the past and is now passing on its mismanagement to consumers.
NV Energy was acquired by Berkshire Hathaway in 2013 for $5.6 billion. The company provides electricity and gas to more than 1.5 million customers.
Greenlink will establish a renewable energy highway in Nevada, maximizing the utilization of the state’s rich renewable energy zones.
The first phase of the project, called Greenlink West, is expected to be completed by December 2026. This phase involves the construction of a 525 kV transmission line stretching about 350 miles from Yerington to Las Vegas.
Future phases, known as Greenlink North, will feature two 345 kV lines connecting Yerington to the Reno-Sparks area.