On its face, Nevada’s Question 3 looked like a mundane referendum on state energy regulations.
In truth, it was a $96 million fight between two famous billionaires, Warren Buffett and casino magnate Sheldon Adelson, over the lights of the Las Vegas Strip.
Voting yes on the Energy Choice Initiative, as Question 3 was formally known, was a vote to change Nevada’s electricity supply from a regulated monopoly to an open-market system by 2023.
Existing Nevada law grants control of electricity generation, transmission, and sale in the state to a single entity, the 112-year-old Las Vegas-based company NV Energy—which, since 2013, has been owned by Buffett’s Berkshire Hathaway.
Though it has fewer than 3 million residents, Nevada is a hungry consumer of electricity. It’s home to the eye-searing lights of the Las Vegas Strip, whose casinos, hotels, and assorted amusements are estimated to consume up to 8,000 megawatts of electricity per day. (For comparison, it would take nearly a full day’s worth of energy from nearby Hoover Dam to power the Strip.)
Large electricity consumers are allowed to leave NV Energy and seek cheaper electricity elsewhere—as long as they pay a big penalty first. MGM Resorts paid $86.9 million to leave the utility in 2016. Caesars Entertainment paid $47.5 million to exit in 2017.
Adelson, whose Las Vegas Sands Corp. owns the Venetian hotel and casino, was quoted a reported $24 million to leave NV Energy in search of cheaper power. He decided instead to invest that money in a campaign against the utility’s monopoly.
Adelson has deep pockets, but Warren Buffett’s are deeper. The question became the most expensive campaign in Nevada history, with the two sides spending almost $100 million on campaign contributions. Adelson’s $22 million donation was ultimately dwarfed by the $63 million NV Energy spent to turn voters against the measure.
In the end, 67% of Nevada voters rejected the proposed change. And every time the lights go on in Vegas, a wealthy man in Omaha gets a little richer.