Month: February 2018

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BNSF

BNSF Joins the Blockchain in Transport Alliance

(BRK.A), (BRK.B)

BNSF Railway Company has became the first Class I railroad to join the Blockchain in Transport Alliance (BiTA).

BiTA is comprised of more than 200 freight transportation companies working to develop blockchain standards for the logistics industry and the supply chain as a whole.

“Blockchain technology has the potential to change several aspects of the transportation industry and it is important that the industry comes together to align around a set of standards,” said Muru Murugappan, BNSF vice president of technology services and chief information officer. “We are excited to help drive those standards forward as a member of BiTA.”

BNSF along with the other members of BiTA will work to define what data goes into the freight transportation blockchain, how that data is formatted, how the data is structured and in what cases blockchain would be used.

Blockchain functions as a distributed ledger, wherein all members of a particular blockchain have access to all the data within it. By housing information with each member, altering the information within a blockchain is difficult – requiring 51 percent of the blockchain’s participants to approve the change.

“BNSF is one of the most important members of the North American transportation network, providing the backbone of American commerce. Their embracement of technology standards for the future of the industry will have a profound impact on the future of customer supply chains,” said Craig Fuller, chief executive officer, BiTA.

© 2018 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.

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Berkshire Hathaway Energy

Berkshire Utilities Have $13+ Million in Benefits from Western Energy Imbalance Market in 4th Qtr 2017

(BRK.A), (BRK.B)

The California Independent System Operator (ISO) has released its western Energy Imbalance Market (EIM) 2017 fourth quarter benefits report that shows the real-time energy imbalance market produced $33.46 million benefits for its six participating members.

During the fourth quarter of 2017 two Berkshire Hathaway Energy companies had over $13 million in benefits. PacifiCorp realized benefits of $6.83 million and NV Energy saved $6.45 million.

The total benefits since the western regional market was launched in 2014 now total $288.44 million for all six members.

Western EIM participants helped reduce carbon emissions in the region by 7,730 metric tons by using 18,060 megawatt-hours of excess renewable energy that otherwise would have been turned off; this translates into removing 1,655 passenger cars from the highways for a year.

“The ISO’s western EIM continues its positive uptick in benefits, accruing savings as it promotes a greener and more reliable energy grid,” said ISO President and CEO Steve Berberich. “We are very pleased with the results for all participants in this growing market.”

The EIM’s state-of-art technology automatically finds and delivers low-cost energy to serve consumers in California, Arizona, Oregon, Washington, Utah, Idaho, Wyoming and Nevada.

In addition to leveraging the diverse resources from a larger pool, the effective use of carbon-free generation provides added environmental benefits. Besides using low-cost energy, EIM utilities reduce their costs by being able to join together to decrease the amount of energy reserves that individual utilities must carry in real time to manage load.

© 2018 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.

Categories
BNSF

BNSF Plans $3.3 Billion Capital Investment in 2018

(BRK.A), (BRK.B)

BNSF Railway Company has announced its 2018 capital investment plan of $3.3 billion. This year’s capital plan reflects BNSF’s continued focus on maintaining its network as well as expansion projects aimed at meeting customer demands.

“Every year we work to ensure our capital investment plan enables us to continue to operate a safe and reliable rail network as well as anticipates the needs of our customers,” said Carl Ice, BNSF president and chief executive officer. “Our attention to safety and service, along with our investments in our network, provide a solid foundation for our ability to grow with our customers today and in the future.”

Since 2000 BNSF has invested more than $60 billion in its network all while remaining focused on its commitment to safety, maximizing efficiency and continuing to meet customers’ expectations. Like last year’s $3.3 billion capital program, the largest component of the plan will be to replace and maintain BNSF’s core network and related assets. Keeping the railroad well maintained ensures trains can run safely and helps limit the need for unscheduled service outages that can slow down the rail network and reduce capacity.

This year’s maintenance component is projected to be $2.4 billion. The projects included in this part of the plan will primarily be for replacing and upgrading rail, rail ties and ballast (which are the main components for the tracks on which BNSF trains operate) and maintaining its rolling stock. It will include approximately 13,000 miles of track surfacing and/or undercutting work and the replacement of more than 500 miles of rail and nearly 3 million rail ties.

“Our infrastructure is strong and robust. Our efforts to normalize our maintenance investment have positioned us to replace the right assets at the right locations at the right time,” Ice said. “This allows our maintenance investment to be at similar levels year-to-year.”

Approximately $500 million of this year’s capital plan is for expansion and efficiency projects. The majority of those projects are focused on key growth areas along BNSF’s Southern and Northern Transcon routes, connecting Southern California with Chicago and the Pacific Northwest to Upper Midwest respectively.

The company has also allocated $100 million for positive train control as it moves toward meeting the Dec. 31, 2018 implementation deadline. BNSF is the only Class I freight railroad to have completed the installation of PTC on all its federally mandated subdivisions and is currently running hundreds of trains daily with PTC as it tests revenue service across its mandated territory.

Another element of its capital plan will be $300 million for freight cars and other equipment acquisitions.

© 2018 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.

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Minority Stock Positions Stock Portfolio

Egypt Chooses BYD’s Electric Buses

(BRK.A), (BRK.B)

Egypt’s first pure electric bus will begin plying the streets of its second largest city Alexandria in the first half of the year under a new deal signed with BYD. Under the agreement, BYD will deliver 15 units of K9 12-meter pure electric buses and 18 charging poles, to accelerate the transition of local public transportation electrification.

The company won a competitive tender to provide its K9 pure electric buses after a call for submissions was made in April 2017. Countries such as Australia, the USA, UK, Japan and Italy operate the K9 in various scenarios. Powered by BYD’s proprietary battery technology, the K9 has a range of 250 kilometers.

BYD is ramping up its expansion across global markets as cities around the world shift towards more sustainable practices. In the Egyptian capital of Cairo, BYD’s sedan accounts for 40 percent of the city’s taxi fleet; its sports utility vehicle S5 is scheduled for a local launch in March.

Also in the pipeline are plans to assemble electric buses and electric cars in Egypt, construct a BYD SkyRail monorail through Alexandria’s congested city center and possibly develop the country’s solar energy sector.

“The tide is turning towards a greener way of living. We need to give ourselves a fighting chance if we are to mitigate the effects of climate change,” said AD Huang, General Manager of BYD Middle East and Africa Auto Sales Division.

BYD’s new energy vehicles span private, public and industrial use. The footprint has landed in more than 200 cities across 50 countries and regions.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million is now worth roughly $1.8 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2018 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.