Nevada taxpayers’ attorney Public Citizen and MGM Resorts International and Caesars Enterprise Services on Monday urged the Federal Energy Regulatory Commission to deny a request by two Berkshire Hathaway Energy utilities for incentives to build the approximately $2.5 billion Greenlink Nevada transmission project.
They argue that the proposed incentives for Nevada Power and Sierra Pacific Power, subsidiaries of NV Energy, which is owned by Berkshire Hathaway, would unnecessarily increase consumer costs. The The Nevada Public Utilities Commission requested FERC should be aware of how the proposed incentives could affect customer rates.
“Berkshire Hathaway’s extraordinarily strong capitalization and liquidity puts the company in a unique position to successfully mitigate risk for Greenlink without having to force captive customers to pay incentive tariffs,” Public Citizen says.
Overview of the dive:
The debate on possible incentives for the construction of 525 kV Greenlink Project comes as the United States is about to deep-build its transmission system to better access wind and solar generation areas. At the same time, FERC commissioners discussed the need to protect taxpayers from transmission costs and the agency is considering modifying incentives it provides to stimulate the development of transmission.
The Nevada PUC approved the western portion of the Greenlink project in 2021, but deferred final approval of its northern segment. Later that year, with support from NV Energy, the Nevada Legislature ordered the entire project to be built by the end of 2028.
NV Energy Utilities June 30 asked FERC to approve three incentives for the Greenlink project: the ability to recover all prudently incurred costs if the project is abandoned or canceled for reasons beyond NV Energy’s control; the deferral of pre-commercial costs through the creation of a regulatory asset; and, the possibility of including all “construction work in progress”, called CWIP, in their rate base instead of waiting for a rate case after the construction of the project to recover its costs.
The Nevada Consumer Protection Bureauor BCP, argues that the incentives will drive up rates and that the utilities have not explained why they need the incentives to build a project mandated by state law.
In addition, NV Energy President and CEO Douglas Cannon told the Nevada Legislature that the utility company would provide all financing for the project and utility customers would pay nothing until ” at least five or six years,” BCP said in arguing against the proposed CWIP incentive.
“The companies have demonstrated, through their aggressive and relentless efforts to gain approval to build Greenlink Nevada, that the unprecedented capital investment of $2.5 billion and the return that NV Energy will earn on the investment was incentive enough for NV Energy to actively champion Greenlink Nevada for years,” MGM Resorts said.
Further, Berkshire Hathaway’s “superior” financial resources make the proposed incentives unnecessary, unfair and unreasonable, Public Citizen said.
When Berkshire Hathaway applied to FERC for approval to buy NV Energy’s utilities in 2013, the company said Nevada customers would benefit from the parent company’s financial strength, according to Public Citizen.
“If the whole point of allowing a massive conglomerate like Berkshire Hathaway to control much smaller utilities like Nevada Power and Sierra Pacific was to allow them to tap into Warren Buffett’s pile of money and credit, then it wouldn’t. is not only unseemly but contrary to the public interest to now ask working families to pay new subsidies to Buffett’s empire on their already stretched monthly bills,” Public Citizen said.