Category Archives: Berkshire Hathaway Energy

PacifiCorp Assumes Sole Ownership of Foote Creek I Wind Farm

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PacifiCorp, a subsidiary of Berkshire Hathaway Energy, has acquired sole ownership of the Foote Creek I wind facility, a 41.4 MW project in Carbon County, Wyoming.

PacifiCorp is now proceeding to repower the project with new turbine technology, increasing energy output by 60%.

The repowered facility will produce enough energy to meet the needs of 19,500 typical homes in PacifiCorp’s service territory. It is anticipated that the project will generate an additional $14 million in tax revenue for rural Wyoming communities over the next 30 years.

Foote Creek I was the company’s first wind facility and the first utility-scale wind project in Wyoming. The demonstration project was commissioned in 1999, with PacifiCorp and the Eugene Water & Electric Board as co-owners, and it was supported with a power purchase agreement with the Bonneville Power Administration.

“Twenty-one years ago, PacifiCorp and its partners’ development of Foote Creek I helped pave the way for utility-scale wind energy as an industry-defining demonstration project,” says Stefan Bird, president and CEO of Pacific Power, a division of PacifiCorp. “Today, this new investment in the project builds on our vision to even better harness wind energy and power the grid with increased efficiency, delivering even more low-cost renewable energy to our customers.”

PacifiCorp will remove the 68 existing 600 kW wind turbine generators originally installed between 1998 and 1999 and replace them with 13 modern turbines, supported by new foundations, energy collector circuits, switchgear and controls.

Notably, repowering in 2020 will requalify the facility for federal production tax credits, which will be passed on as savings to PacifiCorp customers. It will also reduce ongoing operating costs associated with the older turbine equipment.

The repowering is expected to extend the useful life of the facility by more than two decades, creating substantial ongoing benefits for customers. The wind turbines occupy about 1% of the land they are housed upon, thereby allowing the property to continue supporting traditional land uses, such as grazing livestock.

“Acquiring full ownership and repowering Foote Creek I provides a unique opportunity to upgrade the company’s oldest wind plant, located in one of the most favorable wind energy sites in Wyoming, applying the latest technology so that it can continue to serve our customers well into the future,” comments Gary Hoogeveen, president and CEO of Rocky Mountain Power, another division of PacifiCorp.

© 2019 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.

Berkshire Hathaway’s Utilities Saved $19.77 Million in Q2 Thanks to EIM

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Two of Berkshire Hathaway’s utilities, PacifiCorp and NV Energy, saved a combined $19.77 million in the second quarter through the western Energy Imbalance Market (EIM).

The California Independent System Operator (ISO) has released its western Energy Imbalance Market (EIM) 2019 second quarter benefits report that shows total savings have reached $736.26 million since the market’s launch in November 2014.

The benefits for the second quarter reached $86 million for the nine participating members, and the gross benefits for Berkshire’s NV Energy was $4.62 million and PacifiCorp was $15.15 million.

The western EIM platform automatically finds and delivers low-cost energy to serve consumers in Arizona, California, Idaho, Nevada, Oregon, Utah, Washington and Wyoming. Optimizing diverse resources from a large geographic area enables more effective use of carbon-free generation besides reducing costs.

The benefits report estimates the Western EIM reduced CO2 levels by 56,897 metric tons by using surplus renewable energy that otherwise would have been curtailed. Since 2015, the effective use of carbon-free generation from the market has resulted in a gross reduction of 403,546 metric tons of CO2, which is the equivalent of removing the emissions of 84,844 passenger cars driven for one year.

Looking forward, the market continues to grow with benefits anticipated to increase as other participants enter the market. Those future participants include Arizona’s Salt River Project and Seattle City Light in April 2020. Los Angeles Department of Water and Power, NorthWestern Energy, Turlock Irrigation District, and the Public Service Company of New Mexico are slated to begin participation in 2021. Tucson Electric Power in Arizona and Avista, which serves parts of Washington, Oregon, and Idaho, announced plans to participate in 2022.

© 2019 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.of future results.

Berkshire Hathaway’s CalEnergy Resources Buys Into IOG’s Southern North Sea assets

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Berkshire Hathaway’s CalEnergy Resources Limited (“CER”) has signed a deal with Independent Oil and Gas plc (“IOG”) for a farm out of 50 percent of IOG’s Southern North Sea assets.

Highlights
• IOG has signed binding definitive agreements with CER to farm out 50 per cent of its Southern North Sea assets, comprising all of the Company’s upstream assets (except for the Harvey licences), as well as the Thames Pipeline and associated Thames Reception Facilities (the “Farm-out”).
• The consideration payable by CER comprises:
o £40 million initial cash payment
o up to £125 million by way of a development carry representing 80 per cent of the costs associated with IOG’s retained 50 per cent interest, comprising:
• up to £60 million of development costs for Phase 1
• up to £65 million of development costs for Phase 2
o £0.50/MCF royalty on CER’s interest in Goddard production above 70 BCF gross up to a cap of £9.75 million.
• CER will receive a royalty of 20.2 percent of IOG’s Phase 1 revenues up to a cap of £91 million.
• CER will have the option, within three months of the Harvey appraisal well completion, to farm in to 50 per cent of the Harvey licences in consideration for:
o £20 million additional cash payment
o an uncapped royalty of £0.95/MCF on CER’s net Harvey gas production (equivalent to £61.3 million if Harvey produces IOG’s 129 BCF Best Estimate Prospective Resources).
• IOG and CER have also signed an Area of Mutual Interest (“AMI”) agreement to pursue further business development opportunities in the scope of the Thames Pipeline on a 50:50 basis.
• IOG is planning to issue a Euro-denominated Senior Secured Bond (“Bond”) of approximately £70 million to fund its share of Phase 1 costs. There is no additional external funding requirement expected for Phase 2.
• Upon Farm-out and Bond completion, IOG and CER will submit notice of Core Project Phase 1 Final Investment Decision (“FID”) to the Oil and Gas Authority (“OGA”).
• IOG has also entered into agreements to repay and restructure its existing financing arrangements with London Oil and Gas (“LOG”)
• IOG will retain Operatorship of the Core Project.

The Core Project comprises 410 BCF, of 2P+2C reserves and resources across six discovered Southern North Sea (SNS) gas fields. IOG will pay CER a royalty of 20.2% of its net revenues from the Phase 1 fields only (i.e. 10.1 per cent of gross Phase 1 revenues, net of National Transmission System entry charges and applicable marketing fees), up to a cap of £91 million over field life.

In addition, IOG will receive an effective royalty interest equating to £0.50/MCF on CER’s 50 percent share of production from certain sections of the Goddard Field after 70 BCF gross has been produced from the field up to a maximum royalty of £9.75 million.

© 2019 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

Vestas secures 459 MW order from Berkshire’s PacifiCorp

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Vestas has received an order for 459 MW of V136-4.2 MW turbines operating in 4.3 MW power optimised mode from PacifiCorp, a subsidiary of Berkshire Hathaway Energy, for two wind projects, TB Flats I and II, located in Wyoming. Including previously purchased V110-2.0 MW turbines, the projects will have a combined capacity of 503 MW.

TB Flats I and II are part of PacifiCorp’s Energy Vision 2020 initiative, a USD 3.1 billion investment to expand wind power via repowering existing projects, adding 1,150 MW of new wind resources by the end of 2020, and building a 140-mile transmission line segment in Wyoming to enable wind generation.

As part of Energy Vision 2020, Vestas and PacifiCorp previously partnered on repowering the Marengo and Marengo II wind projects in Washington, upgrading the site’s existing V80-1.8 MW turbines with V100-2.0 MW turbines.

“We’re pleased PacifiCorp has selected our V136-4.2 MW, operating in 4.3 MW power optimised mode for the TB Flats I and II projects,” said Chris Brown, President of Vestas’ sales and service division in the United States and Canada. “With their Energy Vision 2020 initiative and commitment to expanding wind energy, PacifiCorp brings both the environmental and economic benefits of low-cost, competitive, and clean wind energy to their customers and communities.”

The order includes supply and commissioning of the turbines as well as a 12-year AOM 4000 service agreement, designed to ensure optimized performance of the project. Turbine delivery will begin in the second quarter of 2020, with commissioning scheduled for the fourth quarter of 2020.

© 2019 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.

NV Energy CEO Lauds New Nevada Bill Increasing Renewable Portfolio Standard to 50 Percent

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NV Energy officials were on hand last week as the Governor of Nevada signed into law Senate Bill 358, which increases Nevada’s renewable portfolio standard to 50 percent by 2030.

“NV Energy has been vocal about our aspirational goal of providing our customers with 100 percent renewable energy, and this is an important next step in accomplishing that,” said Doug Cannon, NV Energy president and CEO. “We announced our support of the renewable standard increase in 2018 and are honored to have worked closely with Governor Sisolak, Senator Chris Brooks, who was instrumental in leading this effort; and other stakeholders to accomplish this so early in the legislative session.”

The company’s 2018 announcement that it planned to add six more large-scale solar projects, three of which will include battery storage for the first time, reinforced its commitment to add more low-cost solar to its energy mix.

NV Energy also recently submitted its annually-required renewable portfolio standard (RPS) compliance filing to the Public Utilities Commission of Nevada, which stated that the company had exceeded the current RPS requirement for the ninth-straight year. Instead of the 20 percent required today, 24 percent of the energy the company provides is generated from renewable resources.

Nevada is a leader in renewable energy, ranking fourth in solar and second in geothermal.

NV Energy has fostered renewable development since before a renewable standard was put into place, having signed its first geothermal contract in 1986. Thanks to expanding renewable energy serving its customers and the retirement of coal-fueled generation in Nevada, Nevada experienced an 85 percent reduction in coal-fueled carbon emissions from 2005 to 2015.

During that same period, Nevada reduced carbon emissions from the electric industry by 44 percent.

“Our company has made great strides over the last decade to increase our use of clean energy resources and reduce our carbon footprint, all while keeping costs low for our customers. Today signifies another step in building Nevada’s a clean energy economy and we’re proud to be one of the leaders in that effort,” added Cannon.

© 2019 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.

Rocky Mountain Power Considers Early Coal Plant Closures

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Berkshire Hathaway’s PacifiCorp is looking at early closures of some of its coal-fired generating stations.

The potential PacifiCorp coal unit closures are operated by its Rocky Mountain Power subsidiary in Wyoming, Utah and Idaho.

Most of PacifiCorp’s coal units will reach the end of their depreciable lives at different points over the next 20 years.

While no resource decision will be made ahead of completion of the 2019 IRP, a PacifiCorp study identified potential benefits for customers through early retirement of some coal units.

“We continuously examine the costs and benefits of how the company generates electricity to ensure we are making the best decisions for customers,” said Rick Link, PacifiCorp vice president of resource planning and acquisitions. “The study reflects the ongoing changing economics for coal driven by market forces.”

For purposes of the study, the company examined whether customers would benefit if units are retired as early as 2022 and replaced with other resources. The timing and sequencing of any actual coal unit closures will ultimately be determined by a range of factors that also include workforce and community transition considerations.

The units the study identifies as being less economic to operate beyond 2022 than alternatives and are candidates for early retirement are:

• Naughton Units 1 and 2 in Wyoming.
• Jim Bridger Units 1 and 2 in Wyoming.

PacifiCorp is a majority owner and the operator of these units.

The company anticipates issuing a preferred portfolio for input from regulators and stakeholders before submitting a final plan to state regulators in August.

© 2019 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.

NV Energy Battles to Keep Large Customers

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Working to stem the tide of defections of some its largest customers, Berkshire Hathaway’s NV Energy has received approval for a new rate structure that gives lower rates to large energy users.

NV Energy says it has had an “impressive response” to its proposed “NV Energy Optional Pricing Program Rate” that allows eligible large energy users to pay a rate derived from low-cost, Nevada-based solar resources.

Twenty-six large customers from both northern and southern Nevada have formally submitted their interest in the program. The customers include several government, education and other public entities, as well as gaming companies and heavy industrial users.

The pricing option will reduce the cost most eligible commercial customers pay for electric service while NV Energy retains the renewable energy credits in order to comply with Nevada’s renewable portfolio standard for the benefit of all customers.

The company declined to provide names of interested entities to protect customer privacy, however the City of Las Vegas is likely to be one of the entities, as Tenaska, the Omaha-based power provider that a provides electric service to MGM Resorts and Caesars Resorts, has withdrawn its bid to serve the city.

The “open window period” will remain open while the company undergoes a robust documentation process to validate the first-in-time, first-in-right priority order.

© 2019 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.

Berkshire Hathaway’s Utilities Saved $26.63 Million in Q4 2018 Thanks to EIM

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Two of Berkshire Hathaway’s utilities, PacifiCorp and NV Energy, saved a combined $26.63 million so far this year through the western Energy Imbalance Market (EIM).

The California Independent System Operator (ISO) has released its western Energy Imbalance Market (EIM) 2018 first-quarter benefits report that shows total savings have reached $330.52 million since the market’s launch in November 2014.

The benefits for October, November and December reached $62.57 million for the eight participating members, and the gross benefits for Berkshire’s NV Energy was $4.95 million and PacifiCorp was $$21.68 million.

The western EIM platform automatically finds and delivers low-cost energy to serve consumers in Arizona, California, Idaho, Nevada, Oregon, Utah, Washington and Wyoming. Optimizing diverse resources from a large geographic area enables more effective use of carbon-free generation besides reducing costs.

The Western EIM continued in the fourth quarter to help displace less clean energy supplies by using 23,425 megawatt-hours of surplus renewable energy that otherwise would have been curtailed.

Since the end of 2014, the effective use of carbon free generation from the market has amounted to reducing a gross of 324,284 metric tons of CO2, which is the equivalent of removing the emissions of 68,179 passenger cars driven for one year.

Looking forward, the market will continue to grow with the planned addition of six entities.

The Balancing Authority of Northern California/Sacramento Municipal Utility District is set to begin participation in April 2019. The Los Angeles Department of Water and Power, Salt River Project, and Seattle City Light will follow in April 2020. The Public Service Company of New Mexico and NorthWestern Energy will participate in the market starting April 2021.

© 2019 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.of future results.

Berkshire Hathaway Energy Supports New Wind Wildlife Research Fund

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Berkshire Hathaway Energy, one of the leaders in wind energy production, is one of two dozen companies in the U.S. wind power industry that have signed up so far to back a new fund facilitating research that will speed development and deployment of innovative solutions related to wind and wildlife.

The news was announced at the Intercontinental St. Paul Riverfront Hotel in Saint Paul, Minn., before an audience of 400 wind and wildlife researchers, regulators, conservationists, and industry leaders gathered for the national Wind Wildlife Research Meeting held every two years.

The new Wind Wildlife Research Fund will be housed within the American Wind Wildlife Institute(AWWI), an independent, nonprofit organization created by leaders in the wind industry and conservation and science communities to better understand wind energy’s risks to wildlife and create solutions.

The Wind Wildlife Research Fund currently has 28 companies participating and organizers hope to reach 35 corporate participants in 2019.

“I’m excited. This really is unprecedented,” said Kyle Boudreaux of NextEra Energy Resources and chairman of the Fund’s leadership group. “The only thing that would limit this is participation, and it’s off to a great start.”

The Wind Wildlife Research Fund continues the wind industry’s proud legacy of care for wildlife.

Increased reliance on wind power results in cleaner air, water and other environmental benefits. Even with relatively low impacts, the wind industry continues its commitment to work with conservation partners to avoid, minimize, and mitigate impacts to wildlife and their habitats.

Industry leaders were briefed on progress in creating the Fund during the American Wind Energy Association’s Clean Energy Executive Summit in Colorado Springs. There Tristan Grimbert, CEO of EDF Renewables, and Greg Wolf, CEO Leeward Renewable Energy, celebrated AWWI’s 10th anniversary and described the new effort.

“The Fund is a tremendous step forward, and further evidence of the wind industry’s commitment to responsible wind development,” Grimbert said in Colorado. “A significant amount of important research about how to make wind energy safer for wildlife has been done since AWWI was founded in 2008, but collectively, we recognize that there is more to know, and we are pleased to support this initiative.”

The Fund will be used to directly support research projects that will advance understanding of technologies and strategies that can help reduce or avoid those interactions. Investments in the Fund will come from wind energy companies, supplemented by public funding and with support from other conservation-minded entities.

“This first-of-its-kind fund will make it possible to continue to expand wind energy development while also protecting and conserving wildlife populations,” Wolf said at the Clean Energy Executive Summit. “It speaks volumes about the wind industry’s values that so many companies have stepped up to invest in the Fund. I encourage everyone to participate, because doing so will help position wind energy to prosper and thrive in the years to come.”

Participating so far in the Fund are: American Wind Energy Association, Apex Clean Energy, Avangrid Renewables, Berkshire Hathaway Energy Company, Clearway Energy Group, ConnectGen, DTE Energy, Duke Energy Renewables, EDF Renewables, EDP Renewables, Enel Green Power, Engie, Identiflight, Invenergy, Innogy Renewables, Leeward Energy, MAP Energy LLC, NextEra Energy Resources, NRG Systems, Pattern Energy Group, Portland General Electric, Puget Sound Energy, RES Americas, Siemens Gamesa, Southern Power, sPower, Tradewind Energy, and Tri Global Energy.

Berkshire hathaway Energy’s wind projects include the 300-megawatt Jumbo Road project near Hereford, Texas; 168-megawatt Pinyon Pines I and 132-megawatt Pinyon Pines II projects, located near Tehachapi, California; 81-megawatt Bishop Hill II project in Henry County, Illinois; 400-megawatt Grande Prairie project in Holt County, Nebraska; 72-megawatt Marshall project in Marshall County, Kansas; and 212-megawatt Walnut Ridge project in Bureau County, Illinois, which is still in development.

© 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.

MidAmerican Energy Piloting Battery Storage for Its Wind Turbines

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Iowa is quickly becoming the state powered by wind, but the only problem is when the wind isn’t blowing.

Now, that problem is one step closer to a solution, as Berkshire Hathaway’s MidAmerican Energy is testing a commercial battery storage system with the capability of powering 900 homes for four hours.

The system is being built by Chicago-based Invenergy, one of the earliest pioneers in advanced energy storage and North America’s leading owner and operator of the transformative technology.

Invenergy specializes in large-scale advanced battery systems that instantaneously absorb and inject energy to help with grid management, while minimizing infrastructure costs. Large-scale batteries support grid reliability by regulating frequency and balancing variations in wind and solar production.

The lithium-iron phosphate system is planned to be in service by the end of December, and will be housed at a Knoxville, Iowa substation.

If the project is successful, it may see broader application storing power for MidAmerican’s thousands of wind turbines that are transforming Iowa into an alternative energy success story.

© 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.