Energy woes may not hurt casinos much

Friday, March 30, 2001 | 11:12 a.m.

A gaming analyst says the financial impact of higher utility bills in California won't be as dramatic on Las Vegas casinos as earlier anticipated.

David Anders, a gaming and lodging research analyst for New York-based Merrill Lynch, said not every consumer would be paying the highest rates.

"Earlier this week, the California Public Utilities Commission approved an across-the-board rate increase on electricity in the state," Anders said in his report. "This action will boost rates by as much as 42 percent for some Southern California Edison customers and up to 46 percent for some served by Pacific Gas & Electric Co.

"Given that Southern Californians represent 25 percent of total Las Vegas visitation, we initially believed that this dramatic increase would significantly hurt some of the city's most important customers. However, upon further review of the facts, we are not convinced that the increase, in absolute dollar terms, will be as dramatic as we thought."

Anders explained that the tiered system of rate increases means that the biggest electricity users will pay the steepest rates. That means the impact won't be as great on the average consumer.