Tag Archives: Berkshire Hathaway Energy

NV Energy Adding to its Renewable Energy Generation Capacity

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Berkshire Hathaway’s NV Energy is continuing to add to its renewable energy generation portfolio. The Nevada-based utility has signed three new long-term power purchase agreements that total100 megawatts. The requests are awaiting approval by the Public Utilities Commission of Nevada.

NV Energy’s President and Chief Executive Officer Paul Caudill noted that the projects include the largest solar array in Northern Nevada at a nameplate rating of 50 megawatts.

“These new projects signal an important step toward NV Energy’s commitment to partner with our customers in order to serve them with 100% renewable energy. Equally important to the low-cost solar energy being added to our customers’ portfolio, these projects benefit Nevada’s working families and provide another opportunity for our construction trade partners to gain skills in the renewable industry,” Caudill said. “We are pleased that all three projects include work site agreements with the International Brotherhood of Electrical Workers.”

It is estimated that up to 250 construction workers and nine permanent positions would be needed for the three projects.

The largest of the three new projects is the 50-megawatt Turquoise Nevada solar project, to be constructed in the Reno Technology Park in Washoe County, Nevada. The project will benefit from a 25-year power purchase agreement with NV Energy and is expected to be operational by the end of 2020.

The Turquoise Nevada solar project is a venture of Estuary Capital Advisors and Sumitomo Corporation of Americas. Sumitomo is an integrated global trading and investment enterprise with ownership in renewable energy facilities totaling 5,000 megawatts worldwide.

NV Energy has submitted a separate request with the Public Utilities Commission of Nevada to utilize the NV GreenEnergy Rider program to help a major customer offset 100 percent of its next phase of growth with solar energy.

“We are excited to help bring the largest solar energy field in Northern Nevada to a reality, and we appreciate the dedication many large Nevada customers have to using the NV GreenEnergy Rider program to offset their energy usage using renewable resources,” stated Pat Egan, NV Energy senior vice-president, renewable energy and smart infrastructure.

The other two new proposed 25-year power purchase agreements are the result of a Request For Proposals that was issued by NV Energy June 14, 2017. The 25-megawatt Techren Solar 3 project will benefit NV Energy customers in Southern Nevada and the 25-megawatt Techren Solar 4 project will benefit customers in Northern Nevada. If approved, the new solar energy projects will be operational on or before September 1, 2020.

The new solar resources will be owned by Techren Solar, LLC and will be located adjacent to the 300-megawatt Techren Solar 1 and 2 projects that are in development in Boulder City’s Eldorado Valley.

“To the best of our knowledge, Techren 3 and 4 are the lowest-cost universal solar power purchase agreements entered into in the United States,” Egan said.

Today NV Energy customers are served by 19 geothermal energy plants, 16 universal-scale solar fields, six hydro projects, five biomass or methane projects and one wind farm. In total, these projects represent more than 1,600 megawatts of nameplate renewable energy capacity. If all were operating at the same time they would generate enough energy to serve nearly a million typical homes in Nevada.

© 2017 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 Buys Wind Farm from Tradewind Energy

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Berkshire Hathaway continues to add to its renewable energy portfolio. Berkshire’s MidAmerican Energy Co., a subsidiary of Berkshire Hathaway Energy, has purchased the North English Wind Project, which is currently under construction in Iowa.

When completed, North English will generate 340 megawatts of wind energy.

The North English Wind Project is located approximately 60 miles east of Des Moines, Iowa in the high-yielding corn and soybean farmlands of Poweshiek County, Iowa. The wind farm is expected to interconnect to a 345 kV (MIDAM) line located in Poweshiek County.

“We are thrilled to support Iowa’s continued leadership in wind energy through the development of the North English Wind Project,” Jeff Hammond, senior development manager for Tradewind, said in a statement. “MidAmerican Energy Co. has a vision to provide 100 percent renewable energy for its customers, and it’s exciting to partner with them toward achieving that goal.”

According to Tradewind, more than 200 landowners and over 30,000 acres will be involved in the project.

© 2017 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.

Commentary: Could the Door Open Again for a Berkshire Acquisition of Oncor?

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Berkshire Hathaway’s ongoing interest in acquiring Oncor Electric Delivery might still have a chance, if only a faint one.

Sempra Energy, which this August outbid Berkshire for Oncor, is running into some of the same resistance that torpedoed the last two attempts to acquire what is the largest distribution and transmission system in Texas.

Sempra’s $9.45 billion bid won out after Berkshire refused to get into a bidding war and stood firm on its $9 billion all-cash consideration that implied an equity value of approximately $11.25 billion for 100% of Oncor.

Now, San Diego-based Sempra has to gain the approval of the Public Utility Commission of Texas, and Commissioner Ken Anderson is raising concerns on the amount of money Sempra will have to raise in order to finance the deal and the credit rating of the company.

The PUC has to rule on whether the Sepra deal is in the public’s interest, and on October 5, Moody’s Investors Service issued a comment titled “Sempra Energy: Revised structure for EFH/Oncor acquisition reduces complexity but transaction remains credit negative.”

Credit negative is not the case with Berkshire. Certainly, financing a deal is not a problem for Berkshire, as it is sitting on over $100 billion in cash that it has been hard-pressed to invest as of late.

Commissioner Anderson’s concern is a valid one, as Oncor has been mired in the decade long financial morass that found its parent company Energy Future Holdings Corp. in bankruptcy after being loaded with $40 billion in debt from a leveraged buy-out engineered by private equity firms KKR & Co. and TPG.

While it’s a longshot that Berkshire can get another shot at Oncor, perhaps a very long shot, the one thing Texas ratepayers need at this point is financial stability.

© 2017 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.

PacifiCorp to Add to Wind Power Capacity

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Berkshire Hathaway’s PacifiCorp, which serves approximately 1.8 million customers in six states, is looking to add 1,270 MW of wind energy to its system by 2020.

PacifiCorp, which has issued a Request for Proposals for renewable resources (2017R RFP) is seeking cost-competitive bids for up to 1,270 MW of new or repowered wind energy interconnecting with or delivering to PacifiCorp’s Wyoming system with the use of third-party firm transmission service and any additional wind energy located outside of Wyoming capable of delivering energy to PacifiCorp’s transmission system that will reduce system costs and provide net benefits for customers.

Proposals for new or repowered wind resources claiming PTC eligibility must demonstrate that projects will qualify for the federal PTC, if applicable and can achieve commercial operation on or before December 31, 2020. The minimum project size is 10.0 MW and the maximum size limit is not fixed, however the project must not compromise system reliability.

Bid Types: PacifiCorp will consider proposals for; a “Build-Transfer” transaction whereby the bidder develops the project, assumes responsibility for construction and ultimately transfers the operating asset to PacifiCorp, all in accordance with the terms of a build-transfer agreement (BTA) or, a power-purchase agreement (PPA) for up to a thirty (30) year term with exclusive ownership by PacifiCorp of any and all environmental attributes associated with all energy generated.

PacifiCorp, through its Pacific Power and Rocky Mountain Power companies, covers 143,000 square miles in California, Oregon, Washington, Idaho, Utah and Wyoming.

© 2017 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.

Special Report: Berkshire Still Sitting on 4 trillion Cubic Feet of Natural Gas

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In mid-November 2015, Berkshire Hathaway Energy’s Australian subsidiary, CalEnergy Resources, drilled a test well in Western Australia for what the company called a “significant gas field.”

The gas field, which is located below the Whicher Range, is estimated to contain four trillion cubic feet of gas-in-place.

CalEnergy is the sole titleholder and operator of the exploration permit EP 408 located approximately 280 kilometers south of Perth, and covers both the Whicher Range and Wonnerup gas fields.

The Long, Very Slow History of the Whicher Range Gas Fields

The gas fields were first discovered in 1968 and 1971, respectively, and are located in ancient sandstone reservoirs nearly four kilometers underground.

The big problem since its discovery has been how to get the gas and not lose your shirt doing it.

According to CalEnergy, the field is a candidate for traditional drilling methods, and hydraulic fracking is not considered a viable option.

In 2016, Peter Youngs, the Managing Director of CalEnergy Resources Group, discussed with MazorsEdge the progress on the development of the gas field, noting that “the field represents a large in place gas resource, its characteristics are challenging and there is much work still remaining to move this resource to a commercially developable status.”

As for the initial test well, Youngs said at the time, “we are encouraged by the flow rates, as seen during the test, but that the critical commercial assessment (of the flow rates) is subject to a period of substantial subsurface data integration work (which is ongoing).

Youngs also doubted that the field could be commercialized by 2017, and that has proven true.

As to when the gas field could start to produce meaningful amounts of natural gas, it still looks to be years away.

CalEnergy recently requested and received, a variation to the permit work program from the Department of Mines and Petroleum (DMP) to undertake reservoir pressure monitoring – this involves data gauges being placed in the Whicher Range 1 (WR-1) and Whicher Range 4 (WR-4) wells.

The company is continuing with reservoir pressure monitoring, and is focused on enhancing their understanding of reservoir behavior.

In the interim, CalEnergy has launched a Care and Maintenance Environment Plan (CMEP) to maintain the current well sites and drilling pads.

Tantalizing Fruit, Just Out of Reach?

For fifty years, the gas fields of the Whicher Range have both held out the promise of enormous economic benefit, and the frustration of inaccessibility.

CalEnergy notes that in the past, “feasibility studies have failed to identify an economic technical strategy for the development of commercial gas production.”

The good news is that as a result of its tests, the company now believes that gas recovery is feasible, and it’s just a matter of when.

© 2017 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 Adding Wind Power in $3.2 Billion Investment

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Berkshire Hathaway’s Rocky Mountain Power will add approximately 1,100 megawatts of new wind generation as part of its planned new 140-mile Gateway West transmission segment. Most of the new investments will be in Wyoming.

“These investments will provide significant long-term benefits to our customers and bring substantial economic benefits to rural communities where the facilities will be located,” said Cindy A. Crane, Rocky Mountain Power President and CEO.

The company first announced the wind and transmission investments in April as part of its broader long-term energy plan. Additional filings and regulatory approvals will be needed for the projects to be built and serving customers by 2020 as planned.

The Energy Vision 2020 projects were chosen by the company as the most cost-effective option to meet customers’ energy needs over the next 20 years. By moving to complete the projects by 2020, the company will be able to use federal production tax credits to provide a net cost savings to customers over the life of the projects.

In making the wind and transmission investments, the project will also create between 1,100 and 1,600 construction jobs in Wyoming, and add approximately $120 million in tax revenue from construction.
The post-construction annual tax revenues will start at approximately $11 million in 2021 and growing to $14 million annually by 2024.

Rocky Mountain Power is also planning to add solar power generation, as well.

© 2017 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.

Commentary: It’s All in the Cards Monday for Berkshire’s Oncor Bid

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Monday’s hearing before Judge Christopher Sontchi in U.S. Bankruptcy Court in Delaware, could decide the fate of Berkshire Hathaway’s $9 billion bid for Oncor Electric Delivery. It’s the latest round of a high stakes poker game that has seen all the players trying to strengthen their hands.

For Berkshire, the key to whether it wins the right to acquire the utility may not just be whether Warren Buffett can prevail over Paul Singer’s Elliot Management, but also the judge’s response to a third bid offering $9.45 billion, which is said to be coming from Sempra Energy of San Diego.

Paul Singer and Elliot Management’s strong hand comes from its status as the largest owner of every class of impaired debt. The hedge fund recently purchased $60 million of leveraged buyout notes to cement that status. And, while Singer has talked of putting together a bid to top Buffett’s offer, he could just as well side with Sempra’s offer.

Another Player Comes to the Table

Sempra Energy could have a strong hand of its own, as it is a credible bidder. Sempra was created in 1998 by a merger of parent companies of two long-established, and highly respected, investor-owned utilities — Los Angeles-based Pacific Enterprises, the parent company of Southern California Gas Co., and Enova Corporation, the parent company of San Diego Gas & Electric by a merger of parent companies of two long-established, and highly respected, investor-owned utilities — Los Angeles-based Pacific Enterprises, the parent company of Southern California Gas Co., and Enova Corporation, the parent company of San Diego Gas & Electric. Today it has 16,000 employees and serves 32 million customers worldwide.

Is the Key the Support of the Stakeholders?

Berkshire’s aces come from an approach that has focused on lining up support from the stakeholders that receive power from Oncor. Five key Texas stakeholder groups have all endorsed Berkshire’s bid.

On Friday, Berkshire Hathaway Energy announced that the Staff of the Public Utility Commission of Texas, Office of Public Utility Counsel, Steering Committee of Cities Served by Oncor, the Texas Industrial Energy Consumers and the IBEW Local 69 have entered into a settlement agreement with Berkshire Hathaway Energy.

The agreement resolved all issues in Berkshire Hathaway Energy’s acquisition of Oncor.

By entering into the settlement, the parties agreed that the acquisition is in the public interest, meets the statutory standards and will bring substantial benefits to Oncor and its customers. The parties to the agreement ask the Public Utility Commission of Texas to approve the acquisition consistent with the enhanced commitments in the agreement.

Will Berkshire Raise its Offer?

Both Greg Abel, Berkshire Hathaway Energy chairman and CEO, and Warren Buffett, have stated the company will stand firm on its $9 billion offer to acquire 80% of Oncor and will not be increasing its offer. Berkshire will collect a $270 termination fee if its offer is rejected.

Berkshire is hoping that in the end Judge Sontchi is persuaded by the support of 12 key stakeholder groups across Texas for Berkshire’s bid.

“The strong coalition of stakeholders consistently express the appropriate concerns and necessary protections for Oncor and its customers,” said Abel. “We stand ready to deliver on and exceed the regulatory commitments

In any case, Monday is looking like the decisive day in the fate of Oncor. Like a poker game of Texas Hold ‘Em, all the cards will be on the table.

© 2017 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.

Key Texas Regulators and Union Rule Berkshire’s Oncor Bid is in the Public Interest

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In advance of Monday’s hearing in U.S. Bankruptcy Court in Delaware, Berkshire Hathaway Energy has announced that the Staff of the Public Utility Commission of Texas, Office of Public Utility Counsel, Steering Committee of Cities Served by Oncor, the Texas Industrial Energy Consumers and the IBEW Local 69 have entered into a settlement agreement with Berkshire Hathaway Energy.

The agreement resolves all issues in Berkshire Hathaway Energy’s acquisition of Oncor.

“We are excited by this unprecedented agreement with these stakeholders, as they have committed their full support to our acquisition of Oncor. This show of support is extraordinary,” said Greg Abel, Berkshire Hathaway Energy chairman, president and CEO. “Our financial strength and commitment to invest in the business will serve Oncor and its customers well and we will exceed their expectations. Our deal offers a great outcome for Texas.”

By entering into the settlement, the parties have agreed that the acquisition is in the public interest, meets the statutory standards and will bring substantial benefits to Oncor and its customers. The parties to the agreement ask the Public Utility Commission of Texas to approve the acquisition consistent with the enhanced commitments in the agreement.

© 2017 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 Scraps Proposed California Geothermal Plant

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Plans have been scrapped for a major geothermal power plant that was expected to be built by Berkshire Hathaway Energy.

The Black Rock Geothermal Power Project was scheduled to be built on the shores of the Salton Sea in California, but BHE subsidiary CalEnergy has requested that California Energy Commission terminate the license for the project.

The much-delayed project was first approved fourteen years ago, and received extensions of the construction start deadline in 2007, 2011 and 2014.

The Black Rock plant would have generated 159-megawatts of electricity, but high-startup costs and environmental concerns have limited the development of geothermal energy.

Among the concerns are that geothermal power plants can in some situations cause earthquakes.

© 2017 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 Refuses to Get Into a Bidding War Over Oncor

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Will Berkshire raise their $9 billion bid to acquire Oncor Electric Delivery Company if Elliot Management comes in with a higher offer? The answer is no.

Greg Abel, Berkshire Hathaway Energy chairman and CEO, and Warren Buffett, chairman and CEO of Berkshire Hathaway stated the company will stand firm on its $9 billion offer to acquire 80% of Oncor and will not be increasing its offer.

“We appreciate the continued opportunity to collaborate with many stakeholder groups in Texas and thank them for their outstanding support, which sets our offer apart from any other bid,” Abel said. “We’re committed to being an exceptional long-term partner in Texas and our simple, straightforward deal is good for Oncor, its customers and the state.”

Berkshire Hathaway Energy’s bid for Oncor includes 47 regulatory commitments that have the support of 12 key stakeholder groups across Texas. “The strong coalition of stakeholders consistently express the appropriate concerns and necessary protections for Oncor and its customers,” said Abel. “We stand ready to deliver on and exceed the regulatory commitments.”

“Oncor is a strong company with values, management and employees that will fit well with Berkshire Hathaway,” said Buffett. “We already have a number of excellent companies operating in Texas. It is a great place to do business, and we look forward to continuing to invest in the state.”

With new stakeholders signing on to support Berkshire’s bid every day, there is good reason to think that will win its Texas-sized prize. However, if the Oncor deal falls through, Berkshire will receive a $270 million termination fee.

© 2017 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.