It is a stunning about-face but not a surprising one.
This week, Las Vegas Sands Corp. announced it signed a long-term contract to make NV Energy the energy provider for The Venetian Resort, one of Las Vegas’ most popular casinos.
George Markantonis, president and COO of The Venetian, said in a statement that the property is happy with the long-term deal.
“The Venetian looks forward to a long partnership with NV Energy as we work together to continue our leadership in renewable energy and environmental sustainability for the benefit of the millions of visitors who experience our properties each year and our community as a whole,” Said George Markantonis, president and COO of The Venetian.
The decision is a radical shift from where Sands stood over the past few years. The company invested millions in support of Question 3, an amendment that would’ve opened a retail energy market in Nevada.
Their efforts, along with those of other energy-choice groups, ultimately failed as NV Energy used a combination of PR-friendly solar projects and more than $60 million in funding to sink the amendment.
Energy Choice Advocate Says NV Energy Is Scrambling to Retain Customers
Dave Chase, manager of the Yes on 3 campaign that fought for energy choice in Nevada, said that deal between The Venetian and NV Energy makes sense for both parties.
“NV Energy is cutting deals all over town with big companies to keep them from leaving. They figured out it’s worth it to give huge discounts to these big companies to solidify their political position and prevent another run at retail choice.”
The fear of companies leaving NV Energy is real, as evidenced by the news earlier this month forthcoming resort-casino Drew Las Vegas wants to leave its contract with NV Energy. The Raiders announced earlier this year they were leaving, too, and were able to do so without paying a hefty exit fee.
The latter’s departure spurred NV Energy to threaten rate hikes if they weren’t repaid for the low exit fees companies paid to leave their contracts.
Move Makes Financial Sense for Sands, Venetian
From a financial perspective, Chase said Sands spent $23 million trying to beat NV Energy in the Question 3 campaign. Leaving NV Energy would cost them roughly $20 million for an exit fee. Rather than rack up their spending in addition to paying higher rates, Sands decided to save money.
“Look at it from Sands’ perspective: You’re overpaying for energy and you just spent $23 million trying to defeat NV Energy. Your option now to lower your energy bill is to pay another $20 million (or so) in an exit fee to buy from the wholesale market. Instead, NVE offers a big discount to stay. It’s an easy call for them,” Chase said.
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