Warren Buffett vs. Sheldon Adelson Over Nevada’s Energy

in Business/Local News

Sheldon Adelson and his company Las Vegas Sands have funneled more than $20 million into supporting a constitutional amendment which would allow Nevada customers to choose their own power providers.

 

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By DARIUS DIXON and ERIC WOLFF 10/27/2018 06:43 AM EDT

Warren Buffett's Nevada energy utility is clobbering Republican megadonor Sheldon Adelson in a power struggle over the fate of the state's electricity supply.

The Omaha investor and the Las Vegas gambling magnate are on opposite sides of a Nevada ballot measure that could rattle the electric power industry: Buffett's Berkshire Hathaway owns NV Energy, a government-regulated monopoly that ranks as the state's largest utility. And Adelson is bankrolling a campaign to break up the company and take control of where his power-hungry casinos buy electricity.

The fight has drawn more political money than Nevada's fiercely contested Senate race, while scrambling political partnerships in the state: Allies of former Senate Democratic leader Harry Reid are working with Adelson, while local environmentalists have joined forces with Buffett's utility.

Adelson and his company Las Vegas Sands have funneled more than $20 million into supporting the Energy Choice Initiative, a constitutional amendment which would allow Nevada customers to choose their own power providers. In addition to Adelson's eight-figure contribution, making him its largest patron, the data storage company Switch has also contributed $12 million to the cause, according to state campaign finance records. But NV Energy has thrown roughly twice as much money into its efforts to kill the amendment, which will appear on the November ballot as Question 3.

Both sides are offering a similar pitch — promising lower energy prices and more opportunities for renewable power — but the “No” campaign seems to be doing a better job drawing voters to its side.

“It's clear that Buffett has decided to loosen the purse strings,” said Nevada political expert Jon Ralston. “They’ve way outspent [proponents] and they’re going to win.”

The $62 million NV Energy has put toward defeating Question 3 has gone into branding the initiative as a “new, unknown system” and a “risky experiment” that echoes the Western energy crisis in the early 2000s.

“On top of higher rates, electricity deregulation in other states has led to less reliable power and even rolling blackouts,” a firefighter says in one anti-amendment ad, as newspaper clips about California power outages in 2001 zip by the screen.

Marc Spitzer, a former regulator in Arizona and at FERC, said reminders of the California crisis remain potent in the region. “The West is different in that regard and they have longer memories for the California implosion,” he said.

Jon Wellinghoff, a former FERC chairman close to Reid, has been working on the pro-amendment campaign for several months. He blasted NV Energy’s attacks as “scare tactics” and “total garbage,” but acknowledged they were having some success.

“The bear is fighting for its life, basically,” Wellinghoff said. He says their investment to date is “probably the tip of the iceberg.”

Question 3 supporters have responded with commercials featuring Jonathan Scott, co-star of home renovation show “Property Brothers,” and a series of “telephone townhalls” that have included former Republican FERC Chairman Pat Wood to help answer questions about how the electricity market in Texas has worked.

But that campaign appears to have started too late to prevent voters from abandoning the measure. Only 32 percent of likely voters supported it compared with 51 percent opposed, according to a September poll from the Reno Gazette-Journal and Suffolk University. The measure won 72 percent of the vote when it first appeared on the ballot in 2016; Nevada law requires initiatives to pass twice to amend the state's constitution.

Adelson's forces “certainly should not have let the other side have the field for so long and outspend them the way they did,” Ralston said.

With more than $95 million raised by both sides, the ballot fight outstrips the spending in the race that could unseat Sen. Dean Heller, one of the most endangered Republicans this fall. Heller and his Democratic opponent Jacky Rosen have raised less than $30 million combined as of the end of September, according to FEC records, and outside groups have spent another $38 million, the Nevada Independent reports.

More than a dozen states have broken up their electric monopolies over the past quarter century in favor of competitive markets, but Nevada would be the first to do so by ballot initiative. Squashing the amendment in Nevada could help stave off similar challenges to utilities in other states where regulated monopolies have dominated — and made steady cash — for a century.

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