Casino boss Sheldon Adelson funnels $20 million into initiative aiming to break up Nevada’s electricity supply monopoly
Nevada has turned into an arena for a battle of billionaires as two business magnates are clashing over a constitutional amendment that aims to end the utility monopoly in the state. The amendment is set to appear on the November 6 ballot as Energy Choice Initiative, and has so far drawn more spending from the clashing parties than the Nevada Senate race, POLITICO wrote over the weekend.
Businessman Warren Buffett and his Berkshire Hathaway conglomerate company currently own NV Energy, the state-run monopoly known to be Nevada’s largest utility. Mr. Buffett has been found to have funneled $62 million to battle the Energy Choice Initiative. Among others, the camp of supporters of the initiative is represented by US casino mogul Sheldon Adelson, who has so far contributed $20 million to support the proposed constitutional amendment.
As mentioned earlier, the measure (Question 3 on the ballot) aims to end NV Energy’s monopoly and allow Nevadans to choose their energy provider. Both the YES and NO camps promise lower electricity bills, new jobs, and expansion of clean energy across the state. And both camps have the same arguments why state residents should back/reject the measure.
Opponents of the measure fear that breaking up the monopoly could put planned renewable energy projects at great risk. NV Energy has recently lodged a request for 330 megawatts of renewable energy and storage and has announced contracts of 1,000 megawatts of new solar energy and 300 megawatts of new storage.
If Question 3 passes, the utility would be required to give up ownership of power plants and only maintain and run Nevada’s electrical lines. In addition, the Legislature will be obligated to create a new, open, electricity market that will allow customers to choose from a number of power providers.
Who Has the Upper Hand?
A similar measure was approved by a majority of Nevadans in 2016. Under state laws, a certain initiative should pass twice so that the Nevada Constitution is amended. However, the NO camp has stronger backing this time, and analysts believe Mr. Buffett’s efforts will prevent the implementation of the proposed amendment.
Of the $95 million raised by both sides, NV Energy has funneled $62 million. Mr. Adelson has contributed $20 million to promote Question 3, which has made him the largest patron of the initiative. The measure has also been backed by data storage company Switch, which has contributed $12 million.
Analysts suggest that NV Energy has commenced its campaign against Question 3 much earlier than the initiative’s YES camp, which has secured the utility provider with the necessary advantage. The measure won 72% of the vote back in 2016, when it first appeared on a ballot. According to experts, the majority vote was due to the popular belief that voters were casting a vote in support of renewable energy. However, fears that breaking up the monopoly could actually harm renewable energy initiatives seem to have grown over the past two years.
Major Las Vegas casino operators have been among the high-profile companies to opt out of NV Energy and seek other suppliers. Under state laws, companies can stop buying power from the state-run monopoly as long as they pay an exit fee determined by competent authorities.
MGM Resorts International paid a $87-million exit fee in 2016. Wynn Resorts and Caesars Entertainment Corp. have, too, been among those to leave. Las Vegas Sands, the gaming and hospitality giant led by Mr. Adelson has originally applied to exit NV Energy, but has then balked at the $24-million fee estimated by state gambling regulators and has eventually decided to stay in.
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