Nevada regulators published on Wednesday draft orders, under which three of the largest gambling companies operating within the state’s borders would be allowed to leave the state electricity supplier as its customers and to provide themselves with their own utility supplies. However, the three operators would have to pay a collective exit fee of $126.6 million in order to be able to do that.
Las Vegas Sands Corp., MGM Resorts International, and Wynn Resorts were the three companies that had filed exit applications. The issued draft orders proposed exit fees of $15.7 million for Wynn, $23.9 million for Las Vegas Sands, and $86.9 million for MGM. Furthermore, the operators will have to pay additional charges and fees in order for future ongoing costs to be recovered.
The state Public Utilities Commission said in a Wednesday statement that such fees need to be imposed. Otherwise, NV Energy, known to be Nevada’s utility supplier, would have to increase rates for its remaining customers, so that costs related to the exit of the three gaming companies to be recovered in a timely manner.
MGM, Wynn, and Las Vegas Sands represent quite a large portion of the electricity supplier’s demand. Having a number of properties around the state, MGM holds a 4.86% share of NV Energy’s annual energy sales, the largest one of the three companies.
All three operators pointed out that they intend to leave the utility supplier if their exit applications are approved by regulators. Caesars Entertainment Corporation, yet another gambling operator with properties in Nevada, had formerly said that it would like to leave NV Energy, but it has not filed an application yet.
MGM, Las Vegas Sands, and Wynn said that they are planning to leave the state utility on February 1, if their applications are backed by Nevada regulators. All three companies have expressed vocal criticism of NV Energy for generating huge profits over the past years and not lowering rates for customers of Nevada Power.
Nevada Power is a subsidiary of NV Energy that serves the southern part of the state. NV Energy itself was acquired by Nebraska-based Berkshire Hathaway in 2013. The three gambling operators also criticized Nevada’s main utility for taking the enormous profits generated over the past years to its parent company’s offices in Omaha.
NV Energy’s profits increased 27.7% in 2014, yet the supplier has not introduced any electricity rates breaks to its customers since it was acquired by Berkshire Hathaway.
