Las Vegas to consider leaving NV Energy

The city of Las Vegas is considering leaving NV Energy for an alternative power provider, setting the stage for it to potentially join a recent exodus from the utility monopoly.

Next week, the City Council will consider approving a letter of intent to negotiate an energy purchasing agreement with Texas-based Tenaska Power Services Co., city documents show.

In that same meeting March 6, policymakers will decide whether to authorize City Manager Scott Adams to negotiate an energy purchasing agreement with NV Energy as current agreements expire this year.

City spokesman Jace Radke said Thursday that efforts to cut energy costs do not disregard the possibility of retaining NV Energy.

“Discussions are ongoing,” Radke said in an email.

The strategy mirrors the Las Vegas Convention and Visitors Authority’s decision this month to approve a search for a better energy deal, through NV Energy or a different provider.

It’s believed the city would be the first municipality in Nevada to explore leaving NV Energy under the state statute that makes it possible to buy energy off the open market. The state Public Utilities Commission declined to confirm Thursday.

If the City Council greenlights both negotiations, the agreements for retail services would return to the council for review and possible action.

Leaving NV Energy requires approval from the PUC, which has levied hefty exit fees on companies that have left. The commission and NV Energy seek the fees because they claim companies that leave the utility increase costs to existing customers. Radke said the city had not filed any paperwork with the PUC.

MGM Resorts International, which left NV Energy in 2016, paid $86.9 million in exit fees, and Caesars Entertainment Corp. was assigned $47.5 million in exit fees in 2018.

According to city documents, Tenaska would provide nonfinancial support to the city in the exit process. Its power delivery to city parks, facilities and streetlights would begin only after the PUC approved the city’s exit from NV Energy.

“We believe we are the best energy partner for the City of Las Vegas, and will continue to work closely with them to offer solutions in order to keep them as a fully-bundled customer,” NV Energy spokeswoman Jennifer Schuricht said in a statement Thursday.

Last year, 10 companies began efforts to leave NV Energy, more than in the previous five years combined. In 2019, others have joined, including The Cosmopolitan of Las Vegas and the convention authority.

In June, the City Council directed staff to evaluate options for continuing to receive 100 percent of its energy from renewable resources while further cutting costs. After evaluating proposals, staff circled Tenaska as the leading offer, according to a staff report.

The city’s ongoing renewable energy use has led to cost savings of more than $5 million annually, the report said.

Contact Shea Johnson at sjohnson@reviewjournal.com or 702-383-0272. Follow @Shea_LVRJ on Twitter.