by Reid Wilson · August 9, 2018
LAS VEGAS — Attendees at a job fair hosted by the Latin Chamber of Commerce strolled through a local mall on a recent Saturday, taking information and back-to-school giveaways from employers looking for new workers.
Those same job-seekers were also being sought out by aggressive canvassers working the crowd, urging state residents to vote against a confusing ballot measure that could change the way their homes are powered.
The ballot measure is at the heart of an expensive fight over the future of Nevada’s energy market, a contest between two of America’s wealthiest men — Sheldon Adelson and Warren Buffett — who want more control over the power source that fuels the billions of lights and hundreds of neon screens that dominate the mega-casinos just a mile from the mall.
Nevada law gives utility companies the right to establish and control monopolies in the state, regulated by the Nevada Public Utilities Commission. Under the current system, NV Energy controls about 90 percent of the energy market.
Now, a group led by casino owners and data centers, which use tremendous amounts of energy, wants to prohibit energy monopolies. Their efforts have led to a measure, known as Question 3, for the November ballot that would overhaul the state’s energy market.
If voters approve the measure on Election Day, the state legislature would be required to write new regulations to establish open and competitive electricity markets by 2023.
Changes to the state constitution require voters to approve the same ballot question in two successive elections. Residents backed the change the first time it was on the ballot, in 2016, by a nearly 3-to-1 margin, a contest in which NV Energy hardly engaged.
But now, with its monopoly under siege, the fight is on — to the tune of more than $30 million so far, an incredible amount of money for such a small state.
The umbrella group behind the deregulation push is being funded by Switch, a publicly traded company that operates massive data centers that sit on millions of square feet of warehouse space in Las Vegas and Reno; and by the Las Vegas Sands Corporation, the casino conglomerate owned and run by Adelson, a billionaire who has long been involved in bankrolling Republican candidates and causes.
Together, the two main funders have put about $19.5 million into the campaign to support deregulating the energy market.
On the other side is NV Energy, which has poured more than $12 million into a campaign to save its monopoly. NV Energy is a subsidiary of Berkshire Hathaway Energy, a holding company controlled by Buffett’s Berkshire Hathaway.
The big spending, especially from opponents of the break-up, has changed the landscape in recent months, observers said. Those opponents have pointed to California, a frequent scapegoat in Nevada politics, where energy deregulation drove up costs in the 1990s.
“Everybody’s thinking this is a slam dunk, and just over the last four or five months the momentum has changed on it,” said David Damore, who chairs the political science department at the University of Nevada, Las Vegas. “They’ve created enough uncertainty with the bogeyman of California.”
As it stands now, any corporation that wants to opt out of the grid and switch to their own source of energy — through renewables like solar, for example — must pay NV Energy tens of millions of dollars in so-called exit fees. The corporations funding the measure to end the monopoly have said their effort will bolster Nevada’s booming renewables market, an appeal to environmental voters who might otherwise be wary of corporate involvement in such a measure.
“With the push to renewables and major companies wanting to get out from the utility monopoly’s thumb, it has gained momentum,” said Jon Ralston, a veteran Nevada political observer.
The battle lines do not fall along conventional left-right factions, and both sides have brought in high-priced Republican and Democratic strategists to manage their campaigns.
The Adelson-funded backers of the measure hired Left Hook Communications, a firm run by Brandon Hall, who managed former Sen. Harry Reid’s (D-Nev.) successful reelection bid in 2010. Supporters have also signed up Scott Bensing, a former chief of staff to former Sen. John Ensign (R-Nev.) and once the executive director of the National Republican Senatorial Committee.
They have relied on support from both Reid and Gov. Brian Sandoval (R), who set the deregulation push in motion years ago.
“Nevada will kick off a clean energy revolution and determine a model for the entire nation to pursue with one simple ballot question,” Reid wrote in an editorial in 2016, just before voters approved the first round of Question 3. “Nevadans are poised to gut energy monopolies’ rigid power grabs and directly participate in the clean energy economy.”
The Buffett-backed opponents brought on Paul Mandabach, a Democratic strategist who has become one of the best-known and most highly sought-after ballot measure experts in the country.
Mandabach has enlisted support from Nevada’s most powerful unions, including the AFL-CIO and Culinary Local 226, the union that represents most workers on the Strip. Those unions have castigated the measure as a power grab by Adelson, their favorite political target.
“The secretive backers of this measure want voters to believe it’s about ‘energy choices,’ but in reality, it would help a handful of ultra-wealthy casino moguls get even richer, at the expense of Nevada’s working families,” Tom Dalzell, the business manager of IBEW local 1245, said in a statement before the first measure passed.
The ballot measure is likely to have at least a tangential impact on two more attention-grabbing contests before voters this November: the battles for control of the U.S. Senate and the U.S. House.
Sen. Dean Heller (R) is the most vulnerable Republican seeking reelection this year, when he faces a pitched fight with Rep. Jacky Rosen (D). And both parties are fighting for open House seats, one held by Rosen and another being vacated by retiring Rep. Ruben Kihuen (D).
The six well-funded nominees running in those three races are all vying for television air time in the costly Las Vegas media market — airtime that is quickly being snapped up by supporters and opponents of Question 3.
Several strategists close to the candidates said they are worried the costs of advertisements in late October will spiral out of control, shutting candidates and the outside groups that support them out of the television market just as voters are tuning in.
“It’s going to cost them more,” Ralston said of the candidates. “And the [Question 3] spending will dwarf them all.”
The Hill · by Reid Wilson · August 9, 2018