(Reuters) – Nevada voters have 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 (BRKa.N).
FILE PHOTO: Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson greets guests before U.S. Vice President Mike Pence speaks at the Republican Jewish Coalition’s annual meeting in Las Vegas, Nevada February 24, 2017. REUTERS/David Becker
The two billionaires’ interests clashed in the Silver State desert over the cost and control of power for uses ranging from the Las Vegas Strip’s neon lights to equipment in the state’s precious metal mines.
A state constitutional amendment supported by Republican donor Adelson, chairman of Las Vegas Sands Corp (LVS.N), 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.
Nevadans defeated the measure by 2-to-1 in Tuesday’s election, according to the latest vote count.
Known as Question 3, the measure became one of the more costly during an election season that wound up with Democrats wresting control of the U.S. House of Representatives from Republicans. (reut.rs/2Dt0meR)
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 communications director of the Coalition to Defeat Question 3, Tracy Skenandore, said the measure was risky and costly.
Sands declined to comment. A NV Energy spokeswoman said in an emailed statement that, “we take the responsibility of serving Nevada’s electric needs personally and we remain focused on providing customers with reliable electric service and delivering on our promise to double renewable energy by 2023 while keeping rates low.”
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 (CZR.O), Wynn Resorts Ltd (WYNN.O) and MGM Resorts International (MGM.N) 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 SCTY.O 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 and Tom Brown