Las Vegas Goes Green? Strip Casinos Leaving Nevada Power Grid

Las Vegas, Sin City, City of Lights, whatever you want to call it, it doesn’t seem like the most environmentally friendly place. The sheer amount of excess that Las Vegas offers, whether it be with gambling, alcohol, general debauchery, or the sheer amount of electric wattage, Las Vegas doesn’t seem like a place that would be willing to go green.

And yet it is. Several Las Vegas Strip Casinos are getting off the Nevada power grid. Las Vegas casinos associated with both MGM Resorts International and Wynn Resorts Ltd., left the power grid as of yesterday. Adding more intrigue to this interesting strategy is that the Nevada utility that the casinos are abandoning is owned by billionaire investor Warren Buffett, a move that will cause a significant financial blow to Buffett’s service provider.

Both groups of Las Vegas casinos submitted applications with the state’s regulators requesting removal from Nevada Energy. The utility is owned by Berkshire Hathaway Inc., which is, in turn, owned by Warren Buffett. According to the terms of the departure, as described by filings with the Nevada Public Utilities Commission, MGM Resorts International will pay $86.9 million to get out from under the power grid’s influence, and Wynn Resorts Ltd. will pay $13.5 million, giving Buffett’s power utility about $100 million in total. That might seem like a lot, but it was also reported that the Las Vegas casinos in question utilized close to 6 percent of all the power used in Nevada.

As to their desire to leave the Nevada power grid, MGM Executive Vice President John McManus explained their intentions in a letter when they filed.

“It is our objective to reduce MGM’s environmental impact by decreasing the use of energy and aggressively pursuing renewable energy sources.”

The renewable energy sources the Las Vegas Strip casinos are examining are primarily solar powered, something that Nevada Energy has been fighting. Rooftop solar developers have long been attempting to install major solar energy collectors on the top of various Las Vegas casinos. Sunlight is one thing that Las Vegas has in abundance, for free, so why not take advantage of it? What the rooftop developers wanted to do in Las Vegas casinos is take advantage of the law that allows personal individuals in Nevada to utilize solar panels on their homes and sell the excess back to the power grid. Nevada Energy finally coalesced, however, as part of the bargain they said that they wanted “exit fees,” and in terms of Las Vegas casinos, those exit fees are close to a $100 million.

The move seems like a win-win. The casinos will make their own power using vast solar arrays on their roofs. The excess they create will be sold to the power grid and re-utilized by other customers, and the environmental impact will be substantial. Though Nevada Energy was at first skeptical, it now seems as if they’re coming around, despite the massive amount of revenue they’re going to be denied, stating that they will continue to work with the Las Vegas casinos as they transition out of the system.

The law that the Las Vegas Strip casinos are taking advantage of was created in 2001. It allows customers to buy electricity from a third party as long as they pay an exit fee and get permission from the utilities commission. When that law was passed, most of Nevada got the majority of its power on the open market. At the time, the state was hoping to stimulate new energy production in the state. Warren Buffett purchased Nevada Energy three years ago, and at this point, Nevada energy has built many solar and gas plants and generates most of its own power.

[Feature Image by Ethan Miller/Getty Images]