Gaming alert | Vegas Casinos can leave Buffett’s NV energy for a price

Three of Las Vegas’s largest casino operators can buy electricity from a source other than Warren Buffett’s utility, but must pay multimillion-dollar exit fees if they want to do so, state regulators ruled.
MGM Resorts International, Las Vegas Sands Corp. and Wynn Las Vegas won final approval Wednesday to stop buying power from NV Energy, a Nevada utility owned by Buffett’s Berkshire Hathaway Inc. The decision by the state’s Public Utilities Commission was unanimous, Peter Kostes, a spokesman, said in an e-mail. The casinos must pay combined impact fees of almost USD127 million to NV Energy.
The threat of three electricity-hungry customers leaving the utility posed a challenge to a business Buffett purchased just two years ago. But the size of the impact fees may help him avoid that outcome. While the casinos said that they’d be willing to pay to leave during the hearings for their request, they disputed the amount.
Las Vegas Sands’s bill would be $23.9 million; Wynn’s would be $15.7 million; and MGM’s $86.9 million, according to a statement by the regulator last week. The casinos also would have to pay undetermined recurring fees and charges after they exit.
“We’re disappointed in the PUC’s order and their apparent desire to put out-of-state big money interests ahead of Nevada ratepayers and their families,” Ron Reese, a spokesman for Las Vegas Sands, said by phone. MGM hasn’t decided whether to switch providers, Clark Dumont, a spokesman, said in an e-mail. Michael Weaver, a spokesman for Wynn Las Vegas, didn’t return a phone call.
Jennifer Schuricht, a spokeswoman for NV Energy, said the company will “support” large customers to make decisions in the best interest of their business.
The casinos can ask to leave NV Energy because of a 2001 law that permits large customers to buy electricity from a third party as long as they pay an exit fee and get approval from the utilities commission. When the measure passed, Nevada got most of its electricity on the open market and was trying to encourage new generation in the state.
Since then, NV Energy has built gas and solar plants and now supplies most of its own power. The added cost of those facilities has pushed rates higher. Mark Chediak and Jim Polson, Bloomberg