NV Energy, Inc. (NYSE: NVEC) is an investor-owned holding corporation that owns five primary, wholly-owned subsidiaries. The company's main operations include the generation, transmission and distribution of electric energy, providing power to Las Vegas and surrounding Clark County, and to northern Nevada and the Lake Tahoe area of California. Natural gas service is also provided in the Reno/Sparks area of Nevada. As NV Energy's main costumers include the gaming/recreation industry, customer usage patterns are highly dependent upon macroeconomic factors.
NV Energy is majorly comprised of utilities operations, which operates under three business segments: NPC electric, SPPC electric and SPPC natural gas. Electric service is provided by NPC to Las Vegas and the surrounding Clark County, whereas SPPC provides electric service to northern Nevada, as well as natural gas service in the Reno-Sparks area. These segment's revenues and operating income is subject to fluctuations throughout the year due to the impacts that seasonal weather, rate changes and customer usage patterns have on demand for electric energy and services. NPC for example is a summer peaking utility, experiencing its highest retail energy sales in response to increased demand for air conditioning. SPPC’s electric system peak also occurs in the summer, with a slightly lower peak demand in the winter. SPPC’s gas business typically peaks in the winter months due to heating demands.
Business growth in recent years has began to center toward Renewable Energy. For example, NV Energy signed a power purchase agreement (PPA) with Us Geothermal Inc (GTH) for an undisclosed amount in June 2011. The 25-year PPA allows for NV Energy to purchase an annual average of up to 19.9 net megawatts of clean, renewable energy from the San Emidio Geothermal project in Washoe County, Nevada, owned by U.S. Geothermal. With revenues growing at -8.5% and 1.6% last year, it has become more and more important for NV Energy to diversify its sources of power.
NVE does not compete with any other parties in its business of electricity generation, as the company operates under franchise agreements in their respective operating areas. Only commercial customers with an average annual load of 1 MW or more may file a letter of intent and application to acquire electric energy from another provider.
In NVE's gas business though, SPPC’s natural gas LDC business is subject to competition from other suppliers and other forms of energy available to its customers. These alternative energy sources include Solar Power, Wind Energy and Geothermal energy. Key makers include: