Station pens power deal

Jun 17, 2003 7:14 AM

Station Casinos last week signed an agreement to purchase its electricity from an affiliate of Shell Oil Co., becoming the first major Las Vegas gaming firm to buy its power from other than Nevada Power Co., Southern Nevada’s largest commercial and residential utility.

Beginning in October, Station Casinos will purchase power for nine of its locals-oriented casinos in Clark County from Coral Power, LLC, at a fixed rate. The electricity will be delivered using Nevada Power’s distribution system, and Station Casinos would still pay Nevada Power for some power delivery services.

The state Public Utilities Commission on March 31 granted Station Casinos’ request to purchase electricity on the open market. Station Casinos officials said they could obtain better rate deals with other power suppliers rather than deal with Nevada Power, which as a utility has what amounts to a monopoly on providing power to Southern Nevada.

"Station Casinos remains committed to containing energy costs," Stephen Cavallaro, the firm’s chief operating officer, said of the deal. "We are pleased that our decision to obtain electricity from Coral removes significant volatility in our energy costs and will have the further benefit of reducing our local customers’ electricity bills."

Eleven of Nevada Power’s largest power users, mostly casino companies, also have received approval to seek power deals elsewhere, although Station Casinos is the first to obtain a new power agreement.

Strip casino chains MGM Mirage and Park Place Entertainment are among those with the same PUC approvals to seek to buy their power on the open market.

Last month, the PUC also agreed to pleas by the Palms, Imperial Palace and Riviera hotels to leave the utility, although none of the hotels has announced when or where they would obtain their electricity other than from Nevada Power.