Legal challenge filed in court against Nevada energy competition ballot Question 3

CARSON CITY — A ballot measure that would open Nevada’s electricity market to competition has been challenged in Carson City District Court.

Question 3 would amend the state constitution to allow competition. It would have to pass twice, this year and in 2018, before it could take effect.

Two individuals, one associated with the Nevada State AFL-CIO, which opposes the measure, filed the legal challenge arguing that it unlawfully directs a future Legislature to enact laws implementing the amendment should it be approved by voters.

The measure would require the Legislature to pass enabling legislation to implement competition, which the lawsuit calls deregulation, by no later than July 1, 2023.

“The initiative represents an unlawful use of the initiative power reserved to the people of Nevada by (the Nevada Constitution) because it seeks to bind future Legislatures to enact specific legislation,” the lawsuit states.

No hearing date has yet been set on the challenge.

The lawsuit, filed on behalf of Nevada residents Jacqueline Sue Bird and Gail Tuzzolo, asks the court to invalidate the measure and prevent the secretary of state’s office from placing it on the 2018 ballot should it pass this year. Tuzzolo has worked in the past on ballot measures sought by the Nevada State AFL-CIO.

A recent Review-Journal poll shows strong support for the measure, which is backed by Nevadans for Affordable Clean Energy Choices. Sixty-eight percent of likely voters polled support Question 3, with 14 percent opposed. Eighteen percent didn’t know or didn’t answer. The poll had a margin of error of plus or minus 3.5 percentage points.

Karen Griffin, a spokeswoman for supporters of the measure, called the lawsuit “a desperate, political stunt to block the right of Nevadans to vote on their own economic freedom.”

“This lawsuit is without merit, filed months past the statutory deadline, and an obvious attempt to distract from the fact that Question 3 will provide Nevadans with expanded electricity choice, lower prices, thousands of new green technology jobs, and technology innovation,” she said.

“We urge Nevadans to look past this last-gasp attempt to circumvent the will of the people, including the more than 120,000 Nevadans who signed the petition, and vote yes on Question 3.”

Opponents argue the ballot measure is flawed.

“The proponents of Q3 cannot commandeer the prerogatives of future Legislatures any more than the 2017 Legislature can tell the 2021 Legislature what to do,” said attorney Bradley Schrager, who filed the lawsuit. “Each Legislature is constitutionally entitled to deliberate for itself on all matters that come before it — that’s what legislatures are elected to do, and that’s what our democratic system demands.”

Tuzzolo said: “If proponents want to enact legislation they should do so through the Legislature and not with a misleading and flawed initiative.”

A number of large companies have sought to leave as retail customers of NV Energy to secure their own energy supplies on the open market. Both MGM Resorts International and Wynn Resorts paid exit fees to leave as retail customers as of Oct. 1, which is allowed under a law passed by the Legislature in 2001.

Casino operator Las Vegas Sands Corp. was granted an exit application as well but opted not to pursue the option.

The data storage company Switch also sought to exit as a customer but was denied by the Public Utilities Commission in 2015. It is suing in U.S. District Court over the denial. Switch recently filed a case with the PUC to obtain approval to acquire its own electricity supply for its Northern Nevada data storage center now under construction east of Reno.

Question 3 was qualified for the ballot with funding almost exclusively from Las Vegas Sands. Switch, electric car maker Tesla and MGM Resorts also support the proposed amendment.

Question 3 would allow anyone, including residential customers, to participate in a competitive electricity market.

Opponents say they want to deregulate the electricity market if Question 3 is approved. Proponents say a regulatory structure would remain in place and they don’t want deregulation. The PUC and others would still regulate.

The Review-Journal is owned by the family of Sheldon Adelson, chairman and CEO of Las Vegas Sands Corp.

Contact Sean Whaley at swhaley@reviewjournal.com or 775-461-3820. Follow @seanw801 on Twitter.