Nevada Casinos Lambaste NV Energy for Proposed Rate Hike
Posted on: October 17, 2023, 08:49h.
Last updated on: October 17, 2023, 06:46h.
In briefs filed with the state’s Public Utilities Commission, Nevada casinos criticized NV Energy for proposing increased “return on equity” (ROE) rates, a proposal that would cost ratepayers.
NV Energy is building a $2.5 billion solar energy transmission infrastructure system called Greenlink Nevada. The initiative will move the state closer to a future powered by 100% renewable energy and reduce Nevada’s carbon footprint.
When NV Energy, owned by Warren Buffett’s Berkshire Hathaway, proposed Greenlink in 2020, the company assured the public that only its investors and bondholders would bankroll the project.
“Nevada’s job market and the economy will immediately see benefits of this initiative while customers will not see rate impacts for Greenlink Nevada before 2025 at the earliest,” NV Energy said in a project overview 2021.
However, NV Energy is now seeking approval from the Nevada Public Utilities Commission to increase its ROE rate from the agreed rate of 9.4% to 10.2%. In the energy industry, ROE refers to the return shareholders receive on their investment in an electric utility. Higher ROE rates attract more investors, raising more capital for the electric company.
Casinos Scold NV Energy
In opinions submitted to the state utilities commission, MGM Resorts, Caesars Entertainment, Wynn Resorts, Boyd Gaming, and Hard Rock International, among others, criticized NV Energy for seemingly going back on their word.
Attorneys representing the casinos said NV Energy must better detail why it’s seeking an increased ROE rate. NV Energy officials claim the petition to increase the rate isn’t linked to Greenlink but is to fund other projects.
“Greenlink is a sizeable project but by far not the only project,” NV Energy said in its brief.
The proposed ROE increase would generate approximately $34 million annually in additional revenue for NV Energy. The casinos, which require and consume massive amounts of electricity for their Strip properties, contend that NV Energy failed to take advantage of near-zero interest rates only a few years ago. They are now trying to pass along their mismanagement to consumers.
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,” Caesars and MGM’s joint brief read.
NV Energy was acquired by Berkshire Hathaway in 2013 for $5.6 billion. NV Energy provides electricity and gas to more than 1.5 million customers.
Completion of the project’s first phase — Greenlink West running from Yerington to Las Vegas — is set for December 2026. Greenlink West includes a 525 kV line running south about 350 miles from Yerington to Las Vegas.
Two 345 kV lines will also run from Yerington to the Reno-Sparks area in a future phase called Greenlink North.
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