If the price is right three of the largest casino operators in Las Vegas won't be getting their power from Warren Buffet's electricity utility.
NV Energy, owned by Buffett's Berkshire Hathaway Inc., provides the juice for Wynn Las Vegas, MGM Resorts International and Las Vegas Sands Corp. The three have already won initial regulatory approval to discontinue the services of the Nevada utility. Conditions were laid out by the Nevada Public Utilities Commission (NPUC) in draft orders published on Wednesday that would enable the gaming companies to find a cheaper source of electricity. The change would cost the three almost $127 million in impact fees.
The NPUC said in a statement, "These fees are necessary because NV Energy's remaining ratepayers would otherwise be forced to pay increased rates to allow recovery of costs already incurred to provide reliable electric service to the casinos," according to a Bloomberg report.
If the conditions are met and the three mega-consumers of electricity stop using NV Energy, Buffet's utility empire would take a hit. Over the past decade and a half, the 85-year-old billionaire investor has been growing Berkshire's energy investments by steadily acquiring power companies, renewable energy projects and pipelines. Buffet said he plans to keep investing in the business that consistently provides a way for billions of dollars to be invested at reasonable rates of return.
According to Wynn spokesman Michael Weaver, the casino is studying the NPUC's order. According to the regulators statement, in order to leave Buffet's utility the conditions would require Wynn to pay $15.7 million, Las Vegas Sands would have to ante up $23.9 million, and MGM would have to let go of $86.9 million. A December 2 vote by the commission on the draft orders is scheduled. All three casinos would also be responsible for paying charges and recurring fees after they leave.
A 2001 law permitting large customers to purchase electricity from a third party, as long as the NPUC approves and exit fees are paid, enables the casinos requests to exit NV Energy. Since that time, gas and solar plants have been built by NV Energy and it is now almost completely self-sustainable. Rates have increased due to the costs of those facilities.
Switch, a data storage company in Nevada, tested the law in November 2014 when it petitioned the commission to opt out of NV Energy to purchase 100 percent renewable power only to have the request denied. However, in July, Buffet's utility announced a plan that would grant Switch's request by paying a premium.