Berkshire Hathaway’s MidAmerican Energy has received the go-ahead from Iowa regulators for its $3.6 billion Wind XI wind farm.
In a joint news conference on April 14, 2016, held with Iowa Gov. Terry Branstad, the company first announced plans to invest $3.6 billion to install additional wind turbines in Iowa by year-end 2019.
Now that it has been approved by the Iowa Utilities Board, Wind XI will within three years become the largest economic development project in Iowa’s history.
When the 2,000-megawatt Wind XI project is completed, Hathaway’s MidAmerican Energy’s annual renewable energy generation is expected to reach a level that’s equivalent to approximately 85% of Iowa’s retail customers’ annual use.
In a release issued by the IUB:
“Today’s order states that MidAmerican has satisfied the two conditions in Iowa Code and is therefore eligible for advance ratemaking principles. The ratemaking principles associated with Wind XI, as agreed to by the parties, are reasonable. The Settlement as a whole will reduce MidAmerican’s reliance on fossil-fueled generation and position MidAmerican to meet ongoing and future environmental mandates in a manner that is more likely to benefit its ratepayers.
The Settlement’s benefits to retail customers will help ensure that MidAmerican’s current and future customers continue to enjoy adequate service and facilities at just and reasonable rates. In the settlement agreement, the ratemaking principles approved set the cost cap for Wind XI Iowa project at $1.792 million per MW including allowance for funds used during construction (AFUDC). For the return on equity (ROE), the settlement agreement provides an allowed return on the common equity portion of Wind XI that will be included in Iowa electric rate base at 11.00 percent.
MidAmerican filed their Wind XI request for advanced ratemaking principles with the Board on April 14, 2016.”
© 2016 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.