The Venetian on the Las Vegas Strip. (L.E. Baskow/Las Vegas Review-Journal) @Left_Eye_Images
Las Vegas Sands Corp. was among the first companies to consider leaving NV Energy for an alternative power provider in 2015. Sands ultimately decided to stay with NVEnergy, but not without a lengthy, costly fight.
Since then, more than 20 companies have filed applications to use an alternative power provider, and five companies have successfully left, wishing to pursue options with more renewables and lower rates.
This week, NV Energy and Sands announced a long-term partnership, but details remain confidential.
Rose McKinney-James, a former commissioner with the Public Utilities Commission, said news of the deal was “a surprising turn of events, but in an environment like this one with so much at stake, decisions have to be made that adjust for whatever makes sense.”
Other companies may follow Sands’ lead and choose to stay with the monopoly utility instead of finding an alternate provider, she said.
“It sounds like the utility has found a way to negotiate with some of its larger customers and found a path to achieve the goals its customers are looking for,” McKinney-James said. “I think that’s a good thing.”
NV Energy spokeswoman Jennifer Schuricht and Sands spokesman Ron Reese declined to offer additional details on the agreement, but McKinney-James, who is also a board member of MGM Resorts International, said it sounds like the terms are favorable for Sands.
“Sands is a sophisticated business. I doubt they’d enter into an agreement that wasn’t in their best interest,” she said. “You have to give credit to both companies for being willing to work together for a common solution.”
But the two companies haven’t always seen eye-to-eye.
Sands and NV Energy were on opposing sides of a ballot initiative in last year’s general election that aimed to create a competitive, open energy market in Nevada. NV Energy spent $63 million to defeat Question 3, and Sands donated more than $20 million to a campaign working to get it passed. Schuricht said Question 3 did not have any impact on the timing of the partnership.
Since the measure’s failure in November, NV Energy has announced plans for $100 million in rate cuts. NV Energy also hopes to roll out a new rate option for government entities and large commercial customers that is both cheaper and solar-based, according to documents filed with the PUC.
A near departure
Sands did not lay out its reasons for wanting to leave NVEnergy in documents filed with the PUC in 2015, but local economist John Restrepo said most companies look to leave NV Energy to cut their costs. Others, like Wynn Resorts Ltd., have said they left to pursue more renewable energy options.
Sands decided to stay with NV Energy in 2016 after the Nevada PUC said the company would have to pay a $23.9 million exit fee. NV Energy and the PUC seek a fee because they say companies that exit the utility place increased costs on remaining customers.
Schuricht said the partnership with Sands will not have any impact on other NV Energy ratepayers.
George Markantonis, president and chief operating officer at The Venetian, said the company will work with NV Energy on environmental initiatives.
“The team at NV Energy took a significant amount of time to listen to our concerns, understand our future business needs and sustainability goals,” Markantonis said Monday in a statement from the companies.
Kevin O’Donnell, a financial analyst with North Carolina-based Nova Energy Consultants, said an increasing number of companies are moving toward renewable energy deals and becoming carbon-neutral.
He said the agreement between NV Energy and Sands is probably going to be “some type of renewable project somewhere close to their site.”
Reese did not respond to a request for comment on whether a renewable project near Sands’ properties is on the horizon. Schuricht declined to offer additional details.
The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson. Las Vegas Sands operates The Venetian and Palazzo.
Contact Bailey Schulz at email@example.com or 702-383-0233. Follow @bailey_schulz on Twitter.
No changes for MSG Sphere
A spokesperson from the Madison Square Garden Company, which is building the MSG Sphere venue along with Las Vegas Sands Corp., did not provide comment for this story, but PUC filings give the impression it will not follow Sands’ lead in penning deals with NV Energy.
At a March PUC hearing, the company said it would negotiate a potential energy purchasing agreement with Tenaska Power Services Co., and filings with the commission say the company has “no intention of taking service directly from generation assets that are owned by or contractually committed to NV Energy.”