Three Gaming Companies to pay $131 Million to Leave Nevada Power

Three Casinos in Las Vegas are under siege. The casinos have a dilemma due to the application of intent to leave Nevada Power. The exit would be detrimental to the earnings of the power company. The three seek to buy power from a free market where forces of demand and supply determine the price. The Casinos claim higher prices for power than it is on the open market. Also, the companies have stated that the prices charged should be discounted. The three have already tendered applications for the exit. To date, the applications remain pending awaiting an amicable solution between the parties.

Energy balance has been a vital problem in Nevada since 2000. At the time, Nevada energy was under pressure to maintain the major clients. It was a measure to ensure that the prices were fair for all sizes of companies, and individuals. When the demand and supply of energy is not managed well, it serves a big headache to the people responsible. It should be clear where the excess energy shall be taken, or where to get the deficit. It is a concept that requires continuous monitoring and commendable analysis skills.

In 2001, the Nevada legislature passed a law that charges a fee to all that intend to leave the agreement. The charge serves two purposes. Firstly, it discourages firms from exiting the services of Nevada power. Secondly, the payment protects the remaining customer base, and is used to guarantee the continuity of services. MGM Resorts is the largest among the three companies. It is estimated that MGM Resorts alone will pay a fee of $90 million to exit Nevada Public Utility Commission. Las Vegas Sands Corp. will pay $24 million, while Wynn Resorts is required to pay $16.7 million. Dropping the three companies would cause a surplus of 4.86 percent over the next few years. Additionally, it is a shortage of revenue to Nevada power. A decline in revenue increases costs compared to the income generated.

The legislation on exit by companies was stimulated by the exit by Switch, a data storage company. The application sent to the Nevada Public Utilities Commission was declined. A deal was later signed to continue services for at least three years. It exited the agreement, three years later, at a cost of $27 million. Control is essential lest the commission runs short of companies to manage. In fact, most companies working for profit would not mind going for cheap services, and ignore quality at the expense of the clients served.

The commission is reviewing the applications, and it is estimated that it would be at least three weeks before an announcement is made. The Commission is working in the interest of the other consumers. When many firms exit Nevada power, it means that the remaining ones will be required to pay a higher utility fee. Therefore, charging high fines for exit helps cut cost that would have been borne by the remaining customers. The policy is purely meant to protect the loyal customers. The case is made worse as the majority of the loyal customers are small firms. The departures raise the utility fees to a level that will be unbearable, thus the desire to leave by the others too.
The commission has a solar project that allows residents to sign up, and take advantage. However, the call to increase the cap to allow many people to benefit was turned down by the Legislature. The Commission continues to work to ensure that more people have solar powered energy. The excess energy generated goes to Nevada power. In return, the residents receive credit on utilities from the commission.

Analysts have reiterated that the objective of the 2001 Legislation was to relieve the Nevada energy of pressure. It was during the energy crisis that legislation was fundamental. However, the circumstances have since changed, and the legislation is not much welcome. It is argued that there are more fundamental issues in society to legislate.

The Nevada commission is a public utility that carefully looks into the interest of the public. Taxpayers make returns every year and expect benefits from the government. Therefore, the act by Nevada to legislate against possible utility increases is at the interest of the general population. The residents of Nevada appreciate the move by the commission to guard against the foreseen cost increases. It is by charging high fees that could help reduce the power bill increases that would occur when the firms pulled out. The commission continues to fulfill its duties as an authority, works tirelessly to ensure a good life for the residents of Nevada.

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