LAS VEGAS (AP) — Data center company Switch can leave NV Energy’s monopoly and buy its own power from other sources, more than two years after it first moved to break free from the company and just as a Switch-led campaign to bring “energy choice” to all Nevadans gains momentum.
The Public Utilities Commission of Nevada voted 3-0 on Thursday to allow Switch to leave as a retail customer if it pays a $27 million exit fee aimed at softening the blow of its departure to the broader customer base and covering the cost of investments NV Energy made assuming that Switch would continue as a customer. Switch lost a fight to reduce the figure.
“We’re thankful that we’re finally back where we had hoped we would have been 2 ½ years ago,” Switch vice president Sam Castor said at a hearing on Thursday. “We’re glad that we’re finally done with this.”
NV Energy didn’t oppose the move and declined to comment after the vote.
Electricity is the biggest operating cost for Switch, which houses remote servers for major technology companies and must keep the centers cool around the clock. It advertises its physical proximity to California but its distance from that state’s high energy costs.
Switch has said it wanted to leave NV Energy because the company wasn’t helping it reach its goal of using 100 percent renewable energy at its data centers. The PUC denied Switch’s effort to leave outright in 2015, instead approving an arrangement that allowed the company to buy renewable energy through NV Energy.
Other large companies including Wynn Resorts and MGM Resorts International pulled out from the utility company on condition they pay multimillion-dollar exit fees. Switch sued the PUC this summer, arguing the casino companies had an easier time exiting than Switch did and alleging that Switch took a $30 million dollar hit because it had to pay NV Energy a premium price for renewable energy.
Switch initially included three PUC commissioners as plaintiffs, but dropped them from the lawsuit in November.
The data center company says it’s now constructing two solar farms to power its operations and is leading the charge for the Energy Choice Initiative, a ballot measure aimed at breaking up NV Energy’s monopoly and making it easier for customers to shop for other electricity providers. The measure passed with 72 percent of the vote in November, and will become part of the state constitution if it passes a second statewide vote in 2018.
Lawmakers are expected to debate bills this spring that lay the groundwork for the more open energy market that the ballot measure envisions.
“Nevada is now poised to develop the plan to implement a forward-looking energy policy that embraces today’s energy producing technologies, supports sustainability and ends the monopoly that is no longer in the best interest of the people of our state,” Switch founder Rob Roy wrote in a statement after the November vote.
Opponents of the ballot measure say it could end regulations that keep energy prices under control. They point to California’s experience with deregulation, which led to an energy crisis and price spikes in 2000.
Proponents of the Energy Choice Initiative say stronger protections are now in place that would prevent a repeat of California’s crisis.