In 2003, the most recent year for which we found this data readily available, the annual electricity cost for a resort hotel room was over $1,500, with another $500 in fuel costs. The Las Vegas Strip is host to over 62,000 hotel rooms. (The tab for power to a single-family home in Southern Nevada today is a yearly $1,854.48, assuming the use of 1,141 kilowatt hours of energy per month.)
Strip casinos often treat energy costs as proprietary information, which is why you won’t see it as a line item on a quarterly report, let alone discussed with the press. Even when a casino achieves a significant cost reduction through the use of new technology, say, they usually don’t talk about the savings in dollars and cents. For instance, one of the more energy-conscious casino companies, MGM Resorts International, would be no more specific than this: "Over the past five years MGM Resorts has deployed energy conservation initiatives that have saved a cumulative total of 213M kilowatt hours (kWh)," writes corporate spokeswoman Yvette Monet. "This amount of energy is equivalent to the annual usage of more than 18,000 average U.S. homes."
(According to National Public Radio’s "Planet Money," the average American – and Nevadan -- pays 12 cents per kilowatt hour and her household uses 908 kilowatt hours of electricity each month. Idaho’s cost [eight cents] is lowest, due to the use of hydroelectric power, while Hawaii, reliant upon crude oil, trails the nation at 33 cents an hour.)
In 2000, MGM allocated $33 million for energy costs and $39 million the year after that – and this was long before the absorption of Mandalay Resort Group, let alone the construction of CityCenter, with its three hotels, two condo towers and Aria casino. After MGM took over Mandalay Resort Group, it covered the roof of the Mandalay Bay convention center with 20 acres of solar panels – and even that only accounts for 20 percent of the resort’s energy consumption.
According to NV Energy, the energy consumption of a casino megaresort equals that of 3,000 homes or a major hospital campus. As then-Mandalay Resort Group President Glen Schaeffer told the Seattle Times, "We are in the bright-lights business … there’s no escaping rising prices." It was this rising cost back in the early 2000s that was responsible for the first generation of "resort fees" being introduced, when Station Casinos and other prominent hotel chains landed themselves in some legal hot water for adding a nightly fuel surcharge (of $3.50).
The industry has taken some steps, like the installation of "smart" thermostats that monitor room temperature, to save on its power bills. MGM Grand has long used energy-saving fluorescent bulbs in its hotel rooms. Said Lights for America sales rep Don Gold, "A 100-watt fluorescent bulb is brighter [than a 100-watt incandescent bulb], yet only uses 25 watts. So the 75 percent savings in energy and dollars is a considerable amount in hotel-casinos that are 24/7." Yet the casinos want players down on the gaming floor, where it costs 154 watts of power to spin a video poker machine. And a jackpot also means a jacked-up power usage. Multiply that by the number of slot machines on the gaming floor and what’s being saved in the rooms is more than being outspent in the casino.
Back at the beginning of this century, NV Energy spokeswoman Sonya Headen indulged in some wishful thinking regarding future energy austerity on the Strip. "One of the hotels will stop using their water fountains, another their volcanoe, others will help by running their backup generators. It’s the last resort." (Pardon the pun.) Well, it’s been 14 years and we haven’t seen any fountains squelched and The Mirage’s volcano show is bigger than ever.
In 2007, the Environmental Protection Administration recommended cogeneration – the combined production of power and heat from a single source – as an "excellent solution for controlling energy costs while improving the reliability of power supply for your resort hotel or casino." It estimated that the cost of installing a cogeneration system could be recouped in five years. Only 16 500-room hotels and casinos were using CHP at the time of the study. "Many of these systems were installed during the late 1980s and are continuing to operate reliably and efficiently today."
One of them – and the first in Las Vegas – was The Rio All-Suite Hotel & Casino – installed by Harrah’s Entertainment in 2004. The EPA didn’t disclose The Rio’s annual energy bill but said it was saving $1.5 million a year through the use of CHP, although it met less than 40 percent of the casino’s annual electricity requirements (but covered the majority of hot water and fuel).
Going one step farther, Seneca Niagara Falls Casino, in New York State, installed a CHP system that covered 73 percent of electricity in peak hours and 100 percent of thermal needs during the summer months. It was projected to recover its cost in four years. Closer to home, it took less than half a year for Rampart Casino to recoup the outlay for replacing 468 185-watt, halide lights in its parking garage with 80-watt compact-fluorescent bulbs.
In addition to a $30,000 annual savings, NV Energy reported, "Moving to energy-efficient CFLs eliminated the humming noise and excessive heat created by the aging metal halide fixtures, reduced maintenance needs and resulted in a better spread of light." It also nabbed Rampart a $15,000 rebate. So while Las Vegas is known for its lights, there’s copious money to be made here by keeping up with the latest in energy-saving and self-generation energy technology.
Vegas resorts caught a break on May 5, when NV Energy proposed a four-percent rate cut. Company President Paul Cadill could have been speaking for his casino clients when he said, "This is good news for our customers as we head into the summer peak season, when we all use more electricity due to hotter weather … Our team has been able to capture, and is passing on, savings resulting from effective management of our power plants and lower natural gas prices, which we purchase in the market." Still, your question is timely, as just prior to this Caesars Entertainment joined the ranks of Wynn Resorts, The gaming company would make four major casino companies, including Wynn Las Vegas, MGM Resorts International, and Las Vegas Sands Corp., along with non-gaming data-storage company Switch, in a bid to win permission from the Nevada Public Utility Commission to exit as retail customers of Nevada Power, in the belief that they can purchase their own electricity cheaper on the wholesale market, even at the cost of paying multi-million dollar "exit" fees—a clear indication that power bills are still a significant concern for these heavy users.
