Nevada voters on Tuesday blocked efforts supported by casino magnate Sheldon Adelson to open up the state’s electricity market, delivering welcome news to Warren Buffett’s Berkshire Hathaway Inc.
The two billionaires’ interests clashed in the Silver State desert over the cost and control of power for uses ranging from the neon lights on the Las Vegas Strip to equipment in the state’s precious metal mines.
A state constitutional amendment supported by Republican donor Adelson, chairman of Las Vegas Sands Corp, would have forced legislators to break up control over much of Nevada’s electricity that is effectively held by Berkshire Hathaway unit, NV Energy. It would have allowed customers to choose their own power provider by 2023. The measure was defeated 2-to-1, according to Nevada’s current vote count.
The measure to open up Nevada's power market, known as Question 3, became one of the more costly during an election season that wound up on Tuesday with Democrats wresting control of the U.S. House of Representatives from Republicans.
Dueling Nevada interests poured at least $96 million into the electricity battle, according to filings with the state government. The “no” campaign outspent the Sands-backed campaign by nearly 2-to-1. In a statement, the Coalition to Defeat Question 3’s communications director, Tracy Skenandore, said the measure was risky and costly.
Sands declined to comment, and NV Energy did not immediately comment on the results. The energy company previously said the measure could “dismantle an electricity system that already provides low costs.”
Proponents of the measure had argued that having a choice on a power utility could lower costs.
Hotel-casinos like Sands’ Venetian, whose lights glitter in Las Vegas, are major power customers in the state. Caesars Entertainment Corp, Wynn Resorts Ltd and MGM Resorts International earlier opted to pay tens of millions in exit fees to drop their power provider.
“We are disappointed with the results of this election and will continue this fight until Nevadans have the right to choose affordable, clean energy,” Dave Chase, campaign manager for Yes on 3, said in a statement.
The Nevada measure placed new pressure on an industry shaken up by the growth of alternative energy sources, some of which have made it easier for consumers to generate their own electricity.
Buffett, a supporter of liberal causes who backed Democratic presidential candidate Hillary Clinton in 2016, has built an empire in the energy industry through acquisitions, many directed by Greg Abel, now considered a potential successor to Buffett as Berkshire’s chief executive.
Since Berkshire acquired it in 2013, NV Energy has made investments in solar power, in addition to coal and natural gas sources. It reached an agreement in 2016 with Elon Musk’s SolarCity Corp that allowed thousands of Nevada rooftop solar customers to take advantage of richer subsidies than under new rate guidelines that NV Energy had supported.
NV Energy’s pretax earnings in the most recent quarter declined 23 percent from a year earlier due to lower margins and increased operating costs.
Reporting by Trevor Hunnicutt in New York; Editing by Bernadette Baum