The Las Vegas Convention and Visitors Authority and a planned multimillion dollar hydrogen fuel plant in Clark County have both filed applications to leave NV Energy as a full service customer.
Applications filed this month show that both the LVCVA and a planned hydrogen fuel plant built by Air Liquide are seeking to leave the state’s primary electric utility, the first two of 2019 and the latest in a growing line of businesses that have filed to leave the utility as a full-service customer.
The potential departure of LVCVA — the government agency that operates Cashman Field and the Las Vegas Convention Center — and another large manufacturing plant before it ever purchases electricity from the incumbent utility is almost sure to draw sharp scrutiny and questions from NV Energy, which in recent months has taken more aggressive moves to stem the tide of departing customers.
Under Nevada law, large power users are allowed to leave NV Energy as an electric customer and purchase power from another provider, given state energy regulators find the application to be in the public interest and if the departing company pays a typically substantial “exit fee” to offset unexpected costs that would otherwise need to be paid by the utility’s other ratepayers.
After a handful of large casinos and companies — including Switch, Caesars Entertainment and MGM Resorts — filed to leave the utility in 2014, a rush of other attempted exit applications followed. At least 10 were filed by businesses and casino properties in 2018 including the Grand Sierra Resort, SLS Las Vegas, Boyd Gaming, MSG Las Vegas, a building supplies company north of Las Vegas, the under-construction Raiders stadium, Atlantis Casino Resort Spa, Fulcrum Sierra BioFuels and Station Casinos.
NV Energy spokeswoman Jennifer Schuricht said in an email that the company believes “we are the best energy partner for the LVCVA and Air Liquide, and will work closely with them to offer solutions in order to keep them as fully-bundled customers.”
In a relatively technical application letter filed on Feb. 11, the LVCVA stated that it met all requirements to grant an exit application, including required load size. The Las Vegas Review-Journal first reported the agency was considering leaving the utility.
In a brief interview, LVCVA CEO Steve Hill told The Nevada Independent that his board had approved options to engage in the exit application process as well as to consider an “NRG 2.0” electric tariff from NV Energy — a reference to the utility’s current pricing structure where customers pay slightly more on their electric bills to ensure their power comes from renewable sources.
Hill said it was possible the authority, which spends about $6 million per year on electricity, could save money and use more renewable power if it contracted with another provider, but that the agency wouldn’t make a final decision on what to do until it completed both processes and could compare potential cost savings.
“It’s a meaningful amount of money to us,” he said. “And frankly we think it’s our responsibility to do what we can to save money, to apply that money for what we’re here to do.”
If approved, the LVCVA will still contract with the utility for transmission services and will be required to meet the current Renewable Portfolio Standard, set to rise to 25 percent by 2025. But under state law, the agency is exempted from a requirement to procure and sell 10 percent of the energy it buys from its new provider and sell it back to NV Energy at the same price.
In a separate filing made on Feb. 1, Air Liquide stated that it planned to build a liquid hydrogen facility in Clark County that will transform methane into liquid hydrogen, which will then be shipped to a California fuel cell facility for use in fuel cell vehicles powered by hydrogen.
The company stated that commercial operation of the plant is scheduled to begin by the third or fourth fiscal quarter of 2021, with a planned $80 million capital investment. The Governor’s Office of Economic Development previously approved $7.9 million in tax abatements for the company’s operations in Clark County.
The application states that the plant wishes to comply with California’s low carbon energy standards and that it isn’t clear if NV Energy can “effectively assist Air Liquide in meeting such a goal.”
Both the LVCVA and Air Liquide said in their applications that they would contract with energy retailer Tenaska as their new electricity provider. Tenaska also provides electricity for other Nevada companies that have left the utility, including Boyd Gaming, the Raiders and MGM Resorts.