Reid-connected lobbying firm tapped to lead Nevada’s D.C. presence

East front of the U.S. Capitol Building

A prominent Washington D.C. lobbying firm led by a former top staffer to former Democratic Senate Leader Harry Reid is being tapped to take over Nevada’s federal lobbying efforts.

The $504,000, two-year lobbying contract with Cassidy & Associates is up for approval at the Tuesday meeting of the state’s Board of Examiners, which is composed of the governor and other top-ranking elected state officials.

The new lobbying contract will keep level what the state currently spends on lobbying, and also marks the first time in 12 years that Nevada will contract with a new government relations firm to represent its interests in Washington, D.C.

Like Nevada, states and local governments routinely spend hundreds of thousands of dollars to hire professional lobbyists in the nation’s capitol — a 2010 OpenSecrets report estimated that local governments spent more $83.5 million in 2009 on lobbying executive agencies and lawmakers. 

Nevada was ranked high on that 2009 list of top government spenders on federal lobbying efforts, and the state is poised to remain a top lobbying spender under the new contract. In total, the state has expended more than $2.6 million to lobby the federal government since 2007.

The contract comes as the state’s previous D.C. lobbyist, Tyler Klimas, is leaving the role after being appointed by Gov. Steve Sisolak to head the new Cannabis Compliance Board, a new marijuana regulatory state agency created in the 2019 Legislature. Previously, Klimas was a press secretary and legislative director for Gov. Brian Sandoval.

Klimas and his predecessor Ryan McGinness have long represented the state through a small lobbying firm called District Strategies, which has contracted with Nevada since 2007. Payments to the firm for lobbying have gone down over time — $280,000 a year between 2007 and 2009, $240,000 a year between 2010 and 2014 and $120,000 a year since 2015 (actual spending totals are higher, as some of the money is spent to run the office versus straight lobbying costs).

In addition to the state government of Nevada, District Strategies maintained a small list of other clients; the city of Corona, California, the Tahoe Regional Planning Agency, fire hydrant manufacturer AVK American and a subsidiary of Genting Group (a Malaysian Company that is constructing the 59-story Resorts World Las Vegas resort on the Las Vegas Strip). 

Comparatively, Cassidy & Associates has a well-established presence on Capitol Hill. According to data from OpenSecrets, in 2019 the lobbying firm was retained by 102 clients and paid nearly $11 million. 

Some of its top clients with stakes in Nevada include Newmont Gold, geothermal producer Ormat Nevada, Charter Communications, PG&E, MGM Resorts, Barrick Gold, Pahrump-based Valley Electric Association, Friends of Nevada Wildnerness, Lander County and Fulcrum Bioenergy.

The CEO of Cassidy & Associates is Kai Anderson, who spent six years working in Reid’s office and eventually rising to become his Deputy Chief of Staff for Policy, before leaving to enter the lobbying world in 2013. A spokeswoman for the agency did not return a request for comment on the proposed contract.

According to OpenSecrets, the firm lobbied primarily on defense issues in 2019 (39 clients) but also had a significant amount of lobbying activity reported in the energy and nuclear power sector (24 clients). That expertise is likely to come in handy, given Nevada’s tempestuous relationship with the U.S. Department of Energy, especially given recently renewed efforts to kickstart a federal nuclear waste repository at Yucca Mountain and an undisclosed plutonium shipment into the state last year. 

According to contract details submitted to the Board of Examiners, other firms that bid to become the state’s D.C. lobbyist included Van Scoyoc, Inc., the Porter Group (run by former Nevada Rep. Jon Porter) and Perkins, Inc. (the firm of former Assembly Speaker Richard Perkins). Contract details state that the winning vendor was “the highest scoring proposer as determined by an independently appointed evaluation committee.”

Updated at 9:20 a.m. to correct and clarify several spending figures reported by District Strategies for lobbying on behalf of the state.

Raiders reverse NV Energy departure, reach renewable electric supply deal with utility

A man waiving a Raiders flag on a sidewalk

In a major victory for NV Energy, the electric utility has filed a proposed contract with utility regulators to provide a new, reduced-rate pricing system for the Raiders’ stadium and team facilities, reversing earlier plans for the football team to operate independently of the state’s largest electric utility.

In a pair of filings made last week with the Public Utilities Commission, NV Energy laid out a proposed contract and new pricing structure with the under-construction Allegiant Stadium, plus Raiders administrative and practice facilities, that would commit the team to a discounted, long-term energy arrangement with the utility, based on recently proposed solar and battery storage generation projects. Notably, the proposed pricing structure would also be available to the handful of businesses that have won PUC approval to leave the utility but are not yet receiving electric service from another provider.

Although the proposed contract and pricing system — dubbed “MPE,” for “Market Price Energy tariff” — still require PUC approval before moving forward, the filings pull back the curtain on NV Energy’s attempts to prevent an exodus from the utility of the Raiders and other large, under-construction projects.

The Raiders initially filed to leave NV Energy as a customer and instead power the team’s $1.9 billion stadium with electricity procured through an alternative supplier in September 2018 — following in the footsteps of several large Nevada businesses, including MGM Resorts, Wynn Resorts and others who filed and received permission to depart the utility as a full-service customer. 

“NV Energy is honored to be the energy supplier for the Raiders and their new home at Allegiant Stadium,” utility spokeswoman Jennifer Schuricht said in an email. “The company filed with the Public Utilities Commission of Nevada the energy supply agreement as well as a new tariff that would allow us to provide new service options to new companies, like the Raiders, that are locating in Nevada.”

Those companies and more than a dozen others had used a portion of state law, often referred to as “704B” after its chapter in the Nevada Revised Statutes, to depart the utility and purchase power from other providers, but only after filing an application with utility regulators and usually paying a seven-figure “impact fee” to minimize the effect on other customers of NV Energy. Nevada lawmakers substantially overhauled the 704B process during the 2019 Legislature, but exempted more than a dozen companies with pending applications from having to follow the new, more complex system for departing the utility.

The Raiders won approval from the Public Utilities Commission to contract with an outside electric provider in late January, but the team — through an affiliated business — had filed paperwork in May requesting delays in compliance requirements, hinting that the team was reconsidering leaving the utility. The stadium is expected to be completed by July 31, 2020.

The contract, as written and submitted to the Public Utilities Commission, would provide “market-based” electric rates to the Raiders’ stadium and practice facility in Henderson for a period of 25 years, depending on whether the commission approves the pending tariff structure and other pending power purchase agreements.

The proposed “MPE” pricing structure works like this: NV Energy would offer two “energy supply” periods, the first in place until proposed renewable power purchase agreements would be approved and constructed (estimated for the late third or early fourth quarter of 2023). 

In the short term, the utility would provide electricity either from energy procured from the wholesale market and “based upon market index pricing” or from excess capacity from the utility’s current generation fleet, with the utility promising to procure and retire “Green-e Credits” in an amount equal to the Raiders’ overall electric consumption (Green-e is an environmental standards service that verifies clean energy sales).

This so-called short-term supply plan also includes a “best-price guarantee” for transmission costs, in essence a cost comparison between this proposed plan and the costs of the utility’s distribution-only customers, with contractual language allowing the team to receive credits and the chance to reassess rates if their transmission costs are higher than distribution-only costs.

But once the renewable energy generating facilities are constructed, the “MPE” pricing structure transitions into a fixed, flat per-megawatt energy cost (the price is redacted in documents filed with the PUC).

“The fixed price is calculated by modeling the forecasted electric consumption of the Raiders Facilities overlaid upon prices the Company will pay under power purchase agreements for renewable solar and collocated battery energy storage facilities recently executed and proposed for Commission approval by (NV Energy),” the company wrote in the filing.

The flat price in the long-term energy supply plan also includes the cost of natural gas transportation and for the cost of providing portfolio credits — an accounting term typically used to measure compliance with a Renewable Portfolio Standard — to account for “100 percent of the Raiders Facilities electric consumption.”

Both the short and long term energy supply plans pluck out surcharges that appear on most power bills, including rates for renewable energy programs, economic development, some public programs, the Base Tariff General Rate (surcharges to cover utility costs) and the Base Tariff Energy Rate (cost of fuel or purchased electricity).

In an attached white paper, the utility stated that the discounted electric prices for the Raiders and other applicable customers would benefit from the arrangement by providing “more stable planning assumptions,” and that it would build upon “Nevada’s continued leadership position in renewable energy, consistent with legislative policy and economic development objectives.”

“These resources serve as the foundation of a generation portfolio which provides for affordable and predictable customer bills, and shields customers from fuel and market volatility for decades into the future,” the utility wrote in the filing.

The benefits section also references a heavily-redacted “customer margin benefit,” included in the pricing for the short and long-term energy supply periods. Although details of this benefit are redacted, the utility states it will share this amount with other customers as part of a 50-50 split.

The “MPE” pricing structure is only available to companies with more than one megawatt of annual load, and who have won approval from the PUC to depart the utility without having been assessed an impact fee — or who win direct approval from the commission to take electric service through the new pricing system. The program isn’t available to customers who receive fully bundled electric service or are being served by an alternative electric provider.

As part of the contract, NV Energy agrees to “not pursue, recommend, support or advocate” before the commission any “impact fee” assessed against the Raiders for departing for normal utility service. The contract also includes provisions requiring the Raiders to remain with NV Energy as a full-service customer, with a limited ability to use “behind-the-meter” generation if it is only used by facilities that are not interconnected with the utility’s electric grid, do not reduce the organization’s electric load by more than 1 percent and “does not diminish the perception that NV Energy is the Raiders Facilities electricity provider.”

Those conditions mean that the pool of companies that could take advantage of the new system is relatively small — of the 14 entities that have filed exit applications since mid-2018, only three (hydrogen fuel plant Air Liquide, MSG Las Vegas and Fulcrum Sierra BioFuels) could presumably fit all of the requirements for the new pricing plan.

The pricing plan can be viewed in some ways as a replacement for the utility’s previously proposed alternative pricing mechanism — the Optional Pricing Program Rate (OPPR) — which it withdrew in the face of criticism from utility staff and the state’s Bureau of Consumer Protection, both of which expressed fears that it would unfairly benefit an arbitrary class of electric customers.

Cosmopolitan files to leave NV Energy's electric service

Photo of The Cosmopolitan Las Vegas

Yet another major casino on the Las Vegas Strip has filed an application to leave NV Energy’s electric service.

The 3,033-room Cosmopolitan of Las Vegas hotel and casino filed an application with state energy regulators last week to leave NV Energy’s electric service and to purchase power on the open market; the third such business or entity to do so in 2019.

The Cosmopolitan is the latest Nevada business to take advantage of a state law that allows large power users to file applications to leave the state’s incumbent electric utility and purchase power on the open market, usually in return for a multi-million dollar exit fee to offset any unexpected costs that would need to be paid by other customers.

In a statement, a spokesperson for the business said the company was "exploring the option of departing from NV Energy in 2019, a decision that will allow the resort to procure renewable energy resources to power some or all of its operation in its continued commitment to sustainability."

It also comes as NV Energy has taken increasingly aggressive moves to block the flow of large customers departing from the utility’s electric service and as lawmakers mull amending the process set out in law that allows customers to depart the utility’s service.

The Las Vegas Convention and Visitors Authority and a planned multimillion dollar hydrogen fuel plant in Southern Nevada filed to leave the utility’s electric service earlier in February — the first two businesses to do so this year. At least 10 companies filed to leave the utility’s electric service last year, including the Grand Sierra Resort, SLS Las Vegas, Boyd Gaming, MSG Las Vegas, a building supplies company north of Las Vegas, the under-construction Raiders stadium, Atlantis Casino Resort Spa, Fulcrum Sierra BioFuels and Station Casinos.

Another handful of large casinos and companies — including Switch, Caesars Entertainment and MGM Resorts — filed to leave the utility in 2014.

In its application, attorneys for The Cosmopolitan provided few reasons for the exit application but said the company met all requirements for an exit, which must be approved by the three-member Public Utilities Commission of Nevada and usually takes several months of hearings and filings.

Attorneys for the company said they met requirements for a successful exit application, including annual power load, and said they were in negotiations with Exelon Generation to serve as the company’s new electric provider in a five-year contract, with an estimated start date of Jan. 1, 2020.

The casino’s application also said it would fulfill a portion of state law requiring it to procure an extra 10 percent of electricity and sell it at cost to NV Energy, and promised to pay for any system impact studies or facility studies in case additional transmission capacity is needed.

Attorneys for the Cosmopolitan said that granting the application would be an overall benefit to the public.

“Approval of Cosmopolitan’s Application will not cause NV Energy to experience any increased costs as a result of the proposed transaction, remaining customers will not see any increase in rates as a result of the proposed transaction, there is no reason why the transaction would impair system reliability or NV Energy’s ability to continue to provide service to its customers, and the energy that Cosmopolitan will procure from its provider will meet the requirements of (state law) adding energy to the state,” attorneys wrote in the application.