The Weekend Wonk: The Utility Death Spiral has Begun
May 30, 2016
Caution – Earthquake in Progress.
Nevada Power is likely doing a lot of soul searching.
Last week, two of the biggest Las Vegas casino companies — MGM Resorts and Wynn – filed to leave Nevada Power and set off to buy wholesale electricity on their own. MGM has particularly strong renewable energy goals, and this move signals that the company thinks it can procure clean electrons cheaper than the utility.
As more large corporations make similar moves, will it lead to a financial disaster for utilities? This week, we’ll discuss the implications with Cory Honeyman, the associate director of GTM’s US solar research practice, who has been following the commercial customer class closely.
A big deal, as the discussion points out – this is a big deal because MGM alone accounts for 5 percent of Nevada Power demand – and MGM was willing to pay an 87 million dollar penalty to get off reliance on the utility.