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Nevada PUC Set To Consider $125 Million in Exit Fees to Casinos To Take Competitive Supply

November 30, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

The Public Utilities Commission of Nevada is currently considering requests by three Las Vegas casino companies to exit NV Energy’s bundled retail electric service and instead purchase energy from alternative suppliers.

The PUCN said in a news release that, "[t]o protect remaining NV Energy customers from paying higher rates," draft orders in the three pending cases before the commission recommend that, upon exiting, the companies must pay upfront impact fees totaling $126.571 million ($23.906 million for Las Vegas Sands Corp.; $15.738 million for Wynn Las Vegas; and $86.927 million for MGM Resorts), plus recurring fees and charges to recover certain ongoing costs that cannot currently be quantified.

"These fees are necessary because NV Energy’s remaining ratepayers would otherwise be forced to pay increased rates to allow recovery of costs already incurred to provide reliable electric service to the casinos," the PUCN said in a news release

The draft orders, proposed by Commissioner Alaina Burtenshaw, will be considered at the three-member commission’s Dec. 2 meeting

The PUCN said in a news release that, "The impact fees reflect the casinos’ share of long-term costs that are currently embedded in NV Energy’s rates. NV Energy has incurred significant costs constructing facilities and acquiring energy resources to meet the casinos’ current and future electricity demands. The impact fees ensure that the casinos remain obligated to pay for the portion of NV Energy’s costs that they have caused. Additionally, the impact fees prevent the casinos from avoiding payment of their proportionate share of costs associated with Nevada’s legislatively mandated energy policies, such as the Renewable Energy Program Rate (REPR), Temporary Renewable Energy Development charge (TRED), Energy Efficiency Program Rate (EEPR), Energy Efficiency Implementation Rate (EEIR), long-term renewable energy power purchase contracts required by the state’s Renewable Portfolio Standard, and Senate Bill 123 costs, which include coal plant decommissioning and site remediation costs."

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