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Strategies & Market Trends : IPPs and Merchant Energy Co.s -- Ignore unavailable to you. Want to Upgrade?

To: majaman1978 who wrote (864)	1/3/2003 9:05:42 AM
From: NDBFREE	Respond to of 3358

Major Casino Companies File Intent to Opt Out of Nevada Power Las Vegas Review-Journal - January 1, 2003 John G. Edwards Jan. 1--Nine large power users removed any doubt Tuesday that they still want to exit the Nevada Power Co. system and buy electricity from competitors. The power users, including some of the largest Strip casinos, filed applications with the Public Utilities Commission. They want permission to leave the regulated utility by July 1 and will need peak power supplies of 294 megawatts in total. While Nevada Power would lose sales if the applications are approved, the utility also would be responsible for providing less power. It would need to purchase less power on the sometimes volatile wholesale market and could rely on its own power plants for a larger part of the power it sells to retail customers. "This transaction should improve system reliability and the ability of (Nevada Power) to provide electric service to its remaining customers," attorney Martha Ashcraft stated in an application for MGM Mirage. MGM Mirage has the largest peak load, 110 megawatts, followed by Park Place with a peak load of 81 megawatts. Others include Monte Carlo, Station Casinos, Coast Casinos, Carl Icahn's casinos, the Sahara, Fashion Show mall and Potlatch Corp. All of the applicants stated that they want the ability to negotiate with Reliant Resources, Sempra Energy or Shell Oil. MGM Mirage and the Monte Carlo want the opportunity to buy power from a unit of Pinnacle West Capital Corp., as well as the other three suppliers. All of the potential suppliers control power generating capacity in Southern Nevada or are building power plants. The applications disclose that Coral Power, which is affiliated with Shell, is negotiating to build power generation facilities in Southern Nevada, but the applications provide no details about the Shell project proposal. The large power users will benefit from being able to take competitive offers from more than one provider, said Steven Boss, president of Nevada Energy Buyers Network. He represents seven of the applicants. Several of the applicants earlier obtained PUC approval to exit the system last year but allowed the deadline to pass without leaving. Boss explained that his clients finalized operational issues only shortly before the deadline. In addition, prices in the power market became volatile, he said. "The process should go much more smoothly this time," Boss said. The applicants can wait for market conditions to moderate if prices spike after they obtain state regulatory approval. "We'll have more time to time the market a little bit," he said.