ML - Vegas Magazine

2013 - Issue 8 - December

Vegas Magazine - Niche Media - There is a place beyond the crowds, beyond the ropes, where dreams are realized and success is celebrated. You are invited.

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" WHEN WARREN BUFFETT SAYS NEVADA'S A GOOD BET... IT'S A GOOD BET." —SENATOR HARRY REID commitment to the environment generally want to do business with other corporations that have that commitment." Despite the city's reputation as the world capital of excess, she says, the presence of green energy producers and consumers is making Las Vegas a global leader in sustainability. Based on her experience here, she recently consulted on Heart of Doha, a massive program to revitalize Qatar's capital city ahead of the 2022 World Cup. Meanwhile, NV Energy, the utility that supplies the Strip (and most of the rest of the state) with the electricity to power all those slot machines, neon signs, and air conditioners, is going green, too. The company has inked a deal to be acquired by MidAmerican Energy Holdings, whose majority owner is Warren Buffett's Berkshire Hathaway, by the first quarter of 2014. The agreement has been valued at about $10 billion, and if state and federal regulators allow it to go forward, it will make MidAmerican the largest utility owner in the country. The deal has attracted the attention of renewable energy advocates because MidAmerican, through its MidAmerican Renewables subsidiary, has made some very large investments in solar and wind energy. As Buffett boasted in his most recent annual letter to Berkshire shareholders, "We now account for six percent of the 126 country's wind generation capacity…. When we complete three projects now under construction, we will own about 14 percent of US solar-generation capacity." When the NV Energy deal was announced, Buffett declared that he was pleased to make a long-term investment in Nevada's economy. Soon after, Senator Harry Reid, a longtime green-energy advocate, offered, "When he says Nevada's a good bet… it's a good bet." E veryone wins, right? That depends on whom you ask. Few will dispute that NV Energy's purchase by a financially strong company with a robust interest in renewable energy is good news, especially the people who run Nevada's renewable industry. Likewise, no one objects to the company's plan to close its coal-burning operations. But the lingering question is: Who will pay for a greener Nevada and how much? NV Energy's biggest customers on the Strip are worried that the answers will be: them and a lot. Some good news on this front came in a November settlement agreement that negated plans for a $2 billion "merger premium" to be passed on to customers in the form of higher rates. Instead, $20 million will be credited to customers (about $13 per Las Vegas household) within 30 days of the sale. The merger deal is on track to be approved by the Nevada Public Utilities Commission by December 20. (Neither Buffett, MidAmerican CEO Greg Abel, nor NV Energy CEO Michael Yackira is saying anything publicly now. Spokesmen for both companies said the executives would not comment while regulators were reviewing the deal.) NV Energy also intends to become greener over the next few years for reasons only partly related to the MidAmerican deal. In February, a bill was introduced in the State Senate, SB 123, requiring that NV Energy accelerate the planned closing of its coal-burning electric plants over the next 10 years, replacing them with a combination of natural gas and renewable energy. The proposal—which NV Energy supported—would also limit the Public Utilities Commission's ability to block rate increases stemming from the conversion. Currently, NV Energy's customers in Northern Nevada have the option of paying a higher rate to receive half or all of their energy from renewable sources. In giving up on coal, NV Energy—which as recently as 2009 was talking about building more coal-burning plants—was both bowing to the inevitable and finding a way to profit from it. The political climate in Nevada supports more green energy. Existing state law—the Renewable Portfolio Standard—already required that NV Energy use eligible renewable energy resources to supply a minimum percentage of the total electricity it sells: 18 percent this year, going up to 25 percent by 2025. (The company is currently exceeding those requirements.) Senator Reid and others have also pressed NV Energy to speed up plans to close its notoriously dirty 557-megawatt Reid Gardner coal plant, about 50 miles north of Las Vegas. But while there was political pressure on NV Energy, it also saw opportunity. Early this year, Yackira started talking with MidAmerican's Abel. Any potential buyer would be concerned about the continuing headache of wrangling with regulators—not to mention Nevada's senior senator—over the company's coal operations. SB 123 would not only put an end to that; it would clear the way for NV Energy to build new facilities, increasing its value to a potential acquirer while passing on the cost to its rate payers with mini- PHOTOGRAPHY COURTESY OF MGM RESORTS INTERNATIONAL (MANDALAY BAY); LITTLENY/SHUTTERSTOCK.COM (STRIP) The roof of Mandalay Bay Convention Center, with a rendering of the solar panels expected to supply nearly 20 percent of the resort's power. VEGASMAGAZINE.COM 124-129_V_Feat_Energy_Dec13.indd 126 11/20/13 5:14 PM

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