Managing the power load of a Las Vegas casino might seem a daunting task. MGM Resorts International, which operates several iconic properties on the city’s famous strip along with other hospitality and entertainment venues worldwide, took matters into its own hands a few years ago as it tried to control its energy costs and also adhere to more sustainable business practices.
Henry Shields, executive director of Finance and Analysis, MGM Corporate Sustainability Division, talked about how the company took control of its own power in remarks April 24 at POWER magazine’s ELECTRIC POWER Conference + Exhibition at the Mirage Events Center in Las Vegas, Nevada.
Shields, in a keynote address titled “MGM’s Path to Renewable Energy,” said the Mirage “is a property that’s important to me personally. This is where I began my career.” He said the company’s commitment to sustainable operations “places a particular emphasis on energy. It represents an opportunity for improvement and innovation in energy, certainly in incorporating more renewable power.
“We now are in the power business,” Shields said. MGM is a customer in the interstate wholesale market for electricity, with its Las Vegas properties served by Tenaska Power Systems with power delivered to the NV Energy system.
Sustainability a Priority
Said Shields: “Sustainability is really the vision. We want to operate all our resorts in a manner that doesn’t take away from future generations. Sustainability itself at MGM Resorts is part of a principle of corporate responsibility.”
Shields said about half the hotel rooms on the Las Vegas Strip are maintained by MGM. The company has 83,000 employees globally, with about 50,000 working in Las Vegas. He said a move toward sustainability required thinking about “how we would significantly change not only how we manage but also how we buy electricity.”
He said the objective was to reduce controllable emissions and advance a large-scale change in operations, with concentration on three primary areas:
- Sustainable design and construction.
- Responsible operating practices.
- Climate leadership.
“Take the Mirage,” Shields said, noting the building opened in 1989. MGM acquired the property in 2000. “Buildings like this need be constantly renovated, remodeled, and re-invented,” and he said the company approached its power project in the same manner.
Shields noted six projects over the past decade, including City Center in Las Vegas—which includes the Aria resort, which opened in 2009, along with other hotels and retail shops—that showcase MGM’s sustainable design and construction. He said the company invested $8 billion in the six developments, which also include the MGM National Harbor in Oxon Hill, Maryland, near Washington, D.C.
A combined heat-and-power (CHP) plant supplies about 30% of the power to the Aria campus, according to Shields. The 8.2-MW system uses natural gas to generate electricity through two twin turbines, along with capturing waste heat to warm water for hotel use.
MGM also has a large rooftop solar array at the Mandalay Bay property. Solar power has become a prime contributor to the city’s electricity; city officials in late 2016 said all Las Vegas government buildings, along with other city properties, were being powered by solar and other clean energy.
Shields said MGM has embraced energy conservation, what he called “doing more with less. We want to control our own density. How do we procure energy in a responsible manner? We entered the wholesale market because we want to control how we use renewable energy.”
He said the company’s conversation efforts include “upgrading to LED lightbulbs. Or it can be more intricate, with the energy management systems in these buildings becoming more efficient. And then more efficient design when we build new buildings.”
Over a period of 18 months, from May 2015 to October 2016, MGM moved away from local utility NV Energy as it took control of its own energy procurement.
“We completed our action in 2016,” he said. “It was labeled as a utility exit, but that’s a misnomer,” he said, noting properties remain connected to the transmission and distribution grid. He said the company’s move to control its own power had several challenges.
“We’re not an energy company, so there were many unknowns we had to work through,” he said. “We looked at how our exit would impact other [NV Energy] customers.” The company paid an $82 million impact fee to ensure there was no impact to other NV Energy ratepayers.
MGM in April 2018 signed a power purchase agreement with Chicago-based Invenergy, North America’s largest independent renewable energy company. Invenergy will build a 100-MW solar PV plant in Clark County, Nevada, with 300,000 solar panels on 700 acres, to supply power for MGM. The plant will provide about 90% of the daytime load of MGM’s Las Vegas properties. It is scheduled to be commissioned in December 2020.
“We had an ideal window for MGM to enter the Nevada renewable energy market,” Shields said. “It was an expensive process, but it created an opportunity for innovative thinking and a greater platform for a prioritization of energy management.”
—Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).