Category Archives: Berkshire Hathaway Energy

Berkshire Hathaway Gets Approval for Natural Gas Pipeline

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Berkshire Hathaway’s Kern River Gas Transmission Company has received approval from the Federal Energy Regulatory Commission for its proposed 36 miles of 24-inch-diameter natural gas pipeline.

The pipeline will run from Wyoming to Utah to the Intermountain Power Project.

Run by the Intermountain Power Agency, and located in the Great Basin region of western Utah, the IPP currently generates an average of more than 13 million megawatt hours of energy each year from its two coal-fired units. The energy is delivered over the project’s AC and DC transmission systems to 35 participants in the project that principally serve Utah and Southern California.

The new Kern River pipeline will enable the IPP to convert the coal-fired units to cleaner natural gas.

Kern River’s Mike Loeffler noted that the pipeline “will provide needed energy with reduced greenhouse gas emissions to communities in both Utah and California.”

© 2022 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 a 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 Hathaway’s Natural Gas and LNG Investments Prove Timely

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Both natural gas and liquefied natural gas (LNG) are much in the news these past few weeks, as Europe looks for alternative sources of energy to replace natural gas supplied from Russia. However, Berkshire Hathaway has been making key natural gas and LNG acquisitions long before the latest headlines.

Already a major player in natural gas distribution, in 2020, Berkshire made a big strategic bet on natural gas and LNG when it paid $4 billion for the natural gas transmission and storage assets of Dominion Energy, and assumed $6 billion of its debt. The acquisition, rocketed Berkshire from roughly 8 percent of all U.S. natural gas transmission to 18 percent.

Berkshire Hathaway’s Expanding Natural Gas and LNG Operations

Berkshire’s natural gas pipelines consist of BHE GT&S, LLC, Northern Natural Gas Company and Kern River Gas Transmission Company.

Berkshire’s BHE GT&S, which was acquired in the Dominion Energy deal in November 2020, is an interstate natural gas transmission and storage company headquartered in Richmond, Virginia, that operates around 5,500 miles of transmission lines in the eastern U.S and 756 bcf of total natural gas storage — with 420 bcf of working gas capacity — as well as gathering, processing and field services businesses. It provides a variety of LNG solutions through Pivotal LNG, its 25% operating stake in Cove Point LNG — the import, export and liquefaction facility in Lusby, Maryland — and other LNG processing and storage initiatives.

One of BHE GT&S’s key LNG assets is currently undergoing rapid expansion. Located along the St. John’s River in Jacksonville, Florida, the JAX LNG facility began operations in 2018 as a joint venture between Pivotal LNG, a BHE GT&S company, and NorthStar Midstream. In May 2021, Pivotal LNG announced that it will be tripling liquefaction to 360,000 gallons a day and doubling its LNG storage to 4 million gallons by early 2022.

Following the completion of the JAX LNG expansion, Pivotal’s full network of LNG assets will reach a production capacity of over 470,000 gallons per day and a storage capacity of approximately 9 million gallons at its three facilities in Alabama, Florida, and Pennsylvania.

This LNG will mostly serve customers in the eastern U.S. and Puerto Rico, with some of the JAX LNG committed to reducing international maritime emissions through a long-term LNG supply agreement with a major maritime company for its dual-fueled ships.

As for other Berkshire natural gas and LNG assets, Northern Natural, which is based in Nebraska, not only operates the largest interstate natural gas pipeline system in the United States, as measured by pipeline miles, but also has three underground natural gas storage facilities and two LNG storage peaking units.

And Kern River, which is based in Utah, operates a 1,400 miles interstate natural gas pipeline system travels from supply areas in the Rocky Mountains to consuming markets in Utah, Nevada and California. Kern River transports natural gas for electric and natural gas distribution utilities, major oil and natural gas companies or affiliates of such companies, electric generating companies, energy marketing and trading companies, and financial institutions.

Just a couple of years ago, some analysts were saying that a push towards electrification of homes in order to meet climate change goals would reduce worldwide demand for natural gas and LNG.

Shell, a major LNG producer, thinks otherwise. The company notes that pre-COVID worldwide demand for LNG was at 358 million metric tons in 2019, and according to Shell’s LNG Outlook 2021, “Global LNG demand is expected to reach 700 million tonnes by 2040, according to forecasts, as demand for natural gas continues to grow strongly in Asia and gains further traction in powering hard-to-electrify sectors.”

Once again Berkshire Hathaway finds itself in the right place at the right time, as its natural gas and LNG distribution investments proved prescient.

© 2022 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 Renewables Gets $15 Million Federal Grant for Lithium Extraction

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BHE Renewables has been awarded a $15 million grant from the U.S. Department of Energy for in support of its lithium extraction from the geothermal brine at its generating facilities in the Salton Sea, California.

The grant will be part of the funding for the construction of a demonstration plant to convert lithium chloride into battery-grade lithium hydroxide in Calipatria, California.

In 2021, the California Energy Commission (CEC) awarded a $6 million grant towards the facility.

Worldwide lithium demand has soared as lithium-ion battery powered cars have moved from the fringe into the mainstream.

The Salton Sea area, one of California’s poorest and most environmentally damaged, may be on the verge of a lithium “gold rush” that could transform the local economy.

“Successful lithium production from geothermal brine could become the catalyst to revive Imperial Valley’s decades-old geothermal power industry, not just creating new jobs but also making the price of baseload geothermal power more cost effective for the benefit of California customers. These two projects represent bold steps in further solidifying the state’s global leadership in renewable energy and sustainability,” Jonathan M. Weisgall, Vice President of Government Relations at Berkshire Hathaway Energy, said.

© 2022 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 a 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 Announces “Wind PRIME” $3.9 Billion Renewable Energy Project

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Berkshire Hathaway’s MidAmerican Energy is planning a $3.9 billion renewable energy project in Iowa, including wind and solar generation, and the exploration of new technologies to advance the company’s transition to net-zero greenhouse gas emissions.

In a filing with the Iowa Utilities Board, MidAmerican’s proposed project, called Wind PRIME, would add 2,042 megawatts of wind generation and 50 megawatts of solar generation.

The company also proposed conducting feasibility studies focused on other clean generation technologies, including carbon capture, energy storage and small modular nuclear reactors.

Wind PRIME will continue MidAmerican’s long history of supporting Iowa communities and advancing the state’s position as a leader in renewable energy. Since 2004, the company has invested approximately $14 billion in renewable energy projects across Iowa.

“Iowa is a renewable energy leader, thanks in large part to MidAmerican Energy’s proven track record of clean energy commitments and investments that are a true competitive advantage for our state,” Iowa Governor Kim Reynolds said. “MidAmerican’s Wind PRIME is a commitment and investment on a whole new level, cementing Iowa’s clean energy leadership for many years to come. Beyond that, though, the company’s commitment to study and pursue emerging clean energy technologies will help Iowa meet the growing demand for a sustainable economy that manages our carbon footprint.”

Wind PRIME, MidAmerican’s 13th renewable energy generation development, is aptly named to both convey that now is the prime time to embark on this opportunity, and to reflect that although wind is an essential component, the project also includes solar energy generation and the examination of new clean energy technologies that will be an important part of the net-zero transition.

“As MidAmerican continues to progress toward delivering 100% renewable energy to our customers, we are also preparing to meet an important milestone of net-zero greenhouse gas emissions,” Kelcey Brown, president and CEO of MidAmerican, said. “The Wind PRIME project will position us and our customers for a sustainable future, while ensuring we continue to deliver affordable and reliable energy.”

Wind PRIME would result in significant benefits for the environment and MidAmerican’s customers:

• Deliver 100% renewable energy to customers – In 2021, MidAmerican estimates that it delivered 88% renewable energy on an annual basis to customers across the state. When combined with MidAmerican’s other projects, the 2,092-megawatt Wind PRIME project would allow MidAmerican to provide renewable energy equal to its Iowa customers’ annual usage.

• Carbon reduction – While thermal generation will remain a necessary part of the portfolio to ensure reliability for customers, the completion of Wind PRIME, in conjunction with existing noncarbon resources, is projected to result in an overall reduction of CO2 by nearly 14 million metric tons, or approximately 75%, from 2005 levels.

• Striving to reach net zero – Wind PRIME also proposes the study of emerging technologies, including energy storage, carbon capture and small modular nuclear generation, that will help expand MidAmerican’s ability to meet its customers’ demand for renewable generation as well as lower-carbon and noncarbon generation.

MidAmerican estimates that the Wind PRIME project will create more than 1,100 full-time jobs during the construction phase and another 125 full-time positions for ongoing operations and maintenance.

In addition, Wind PRIME will provide an average of $24 million-plus per year in local property tax payments on wind turbines and solar facilities, as well as more than $21 million in annual landowner easement payments.

If approved, the company plans to complete construction in late 2024.

© 2022 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 a 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.

Two Berkshire Hathaway Utilities Saved $58 Million in Q3

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Two of Berkshire Hathaway’s utilities, PacifiCorp and NV Energy, saved a combined $58.16 million in the third quarter through the western Energy Imbalance Market (EIM).

The Western EIM achieved $301 million in third-quarter benefits, bringing the cumulative benefits attained in the real-time energy market since its inception in late 2014 to $1.72 billion.

The gross benefits for Berkshire’s NV Energy was $18.04 million and PacifiCorp was $40.12 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 record-setting results for the third quarter of 2021 are attributed to above normal temperatures that caused tight energy supplies for much of the West, and the addition of several new entities that joined the Western EIM earlier in the year.

“As we embark on the development of our Enhanced Day-Ahead Market (EDAM), these EIM results are another tangible example of the value of West-wide market coordination,” said California Independent System Operator (ISO) President and CEO Elliot Mainzer. “We look forward to working with our partners across the West to build on this foundation and create even greater economic and environmental value for the people we serve.”

The third-quarter results, which represent gross cost savings calculated from the optimization of market and grid efficiencies, exceeds the $297 million in cumulative benefits for all of 2019, and nearly reaches the $325 million in total benefits attained in 2020.

Since its launch, the Western EIM has deployed sophisticated technology to find and deliver the lowest-cost energy to its members, while enhancing reliability and providing significant environmental benefits through the reduction of renewable energy curtailments during periods of oversupply.

Reducing curtailments leads to lower greenhouse gas emissions because the renewable energy – rather than going unused – can be deployed by other market participants, and may displace power generated using fossil fuels.

The 2021 third-quarter economic benefits for each participant:
(Millions $)

Arizona Public Service $ 24.58
BANC $ 72.52
California ISO $ 54.01
Idaho Power $ 17.76
LADWP $ 23.57
NV Energy $ 18.04
NorthWestern Energy $ 5.16
PacifiCorp $ 40.12
Portland General Electric $ 7.12
Powerex $ 0.92
PNM $ 6.77
Puget Sound Energy $ 6.78
Salt River Project $ 17.78
Seattle City Light $ 3.92
Turlock Irrigation District $ 2.13
Total $ 301.18

© 2021 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 Save $21.25 Million in Q2 2020 Thanks to EIM

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Two of Berkshire Hathaway’s utilities, PacifiCorp and NV Energy, saved a combined $21.25 million in Q2 2021 through the Western Energy Imbalance Market (EIM).

The Western Energy Imbalance Market achieved a new record of $132.7 millionin quarterly benefits (cost savings calculated from the optimization of market and grid efficiencies).

In 2014, Berkshire Hathaway Energy’s PacifiCorp agreed to become the first participant in the Energy Imbalance Market. Berkshire’s NV Energy, which serves 2.4 million customers in Nevada, commenced participation on December 1, 2015.

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

Because of the renewable energy transfers supported by the Western EIM, there was a reduction in the need to curtail renewable energy resources during periods of oversupply. The avoided renewable energy curtailment for the quarter was 109,059 megawatt hours (MWh), resulting in a total of 1,509,114 MWh of avoided renewable energy curtailment since 2014.

In addition to the economic results, the cumulative greenhouse gas emissions reduction from avoided renewable curtailment since 2014 is 645,821 metric tons, which is equivalent to removing more than 135,700 passenger cars from the road for one year.

“During this dynamic period in the evolution of the Western energy landscape, the Western EIM has continued to gain momentum and deliver outstanding results,” said California Independent System Operator (ISO) President and CEO Elliot Mainzer. “As we drive for collaborative solutions to the challenging reliability issues that emerged from last summer and explore new approaches to governance, the ISO will continue working to help our market participants across the West realize even greater economic and environmental value.”

© 2021 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 Energy and Dominion Energy Mutually Terminate the Sale of Questar Pipeline Group

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Berkshire Hathaway Energy and Dominion Energy have agreed to terminate the planned sale of Questar Pipeline Group to Berkshire Hathaway Energy. The decision has no impact on the sale of gas transmission and storage assets to Berkshire Hathaway Energy completed in November 2020. That sale represented approximately 80% of the original transaction value.

© 2021 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’s HomeServices of America Acquires Americana Holdings

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Berkshire Hathaway’s HomeServices of America, Inc. has acquired Americana Holdings, one of the largest independently owned and operated Berkshire Hathaway HomeServices franchisees. With the acquisition, HomeServices of America adds nearly 3,000 sales associates in 32 offices in communities throughout Arizona, Southern Nevada, and Orange County.

Americana Holdings operates across three states as Berkshire Hathaway HomeServices Arizona Properties, Berkshire Hathaway HomeServices California Properties, and Berkshire Hathaway HomeServices Nevada Properties.

The acquisition also includes Americana Holdings’ interests in the following title and escrow companies: Legendary Title Agency (Arizona), Legendary Escrow Services (California), and Equity Title (Nevada).

With this transaction, HomeServices has nearly 46,250 real estate professionals operating in more than 900 offices across 32 states.

Financial terms of the transaction were not disclosed.

Americana Holdings joined the Berkshire Hathaway HomeServices network as an independent franchisee in 2014 and with this transaction, now joins the HomeServices’ family of wholly-owned companies.

In 2018, Berkshire Hathaway HomeServices Nevada Properties entered the Inc 5000 Hall of Fame after being named as one of the country’s fastest-growing private companies for five years. In 2018, it also was ranked No. 32 on the Swanepoel Mega 1000, a list of the largest real estate brokerages in the U.S. by sales volume.

Mark Stark, the company’s chief executive officer, has nearly 40 years of real estate experience and is among real estate’s most recognized and influential leaders. In 2020, Stark was named among the “Most Powerful People in Real Estate” in the Swanepoel Power 200. Stark, together with president and chief operating officer Gordon Miles, will continue to lead Berkshire Hathaway HomeServices Arizona, California, and Nevada Properties’ strategic planning and growth initiatives as well as manage the company’s day-to-day operations.

“Mark and Gordon, together with their team of extraordinary sales managers and agents, have built an exceptional organization and demonstrate a level of expertise and leadership that is second-to-none in the real estate business today,” said Gino Blefari, CEO of HomeServices of America and chair of Berkshire Hathaway HomeServices.

“HomeServices is an outstanding organization,” said Stark. “When you combine the incredible strength of our people and the history of our success with Gino’s unsurpassed leadership and the spirit of innovation and the financial strength of HomeServices, there is no limit to what we can accomplish.”

“We are committed to Berkshire Hathaway HomeServices Arizona, California, and Nevada Properties’ continued growth and success,” concluded Blefari. “We look forward to working with Mark and his team and are very proud to welcome them to the HomeServices family.”

The acquisition extends HomeServices’ national footprint to Nevada and further expands its presence in both Arizona and California. Now serving these areas from the HomeServices family of companies are Tucson-based Long Realty, a HomeServices company since 1999; San Diego-based Berkshire Hathaway HomeServices California Properties (2002); Fresno-based Guarantee Real Estate (2013); and Silicon Valley-based Intero Real Estate (2014).

HomeServices is owned by Berkshire Hathaway Energy, a subsidiary of Berkshire Hathaway.

© 2021 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 MidAmerican Energy Hit With Lawsuit Alleging Excessive Charges During Texas Winter Storm

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A North Texas plastics company has filed a proposed class action lawsuit against Berkshire Hathaway’s MidAmerican Energy Services, alleging the electricity supplier passed through unauthorized fees to commercial customers with contracts marketed as fixed-rate plans.

MidAmerican supplies electricity to roughly 15,000 customers in Texas.

According to the filing in federal district court in Marshall, lead plaintiff J&M Plastics, located in Royse City northeast of Dallas, received a statement from MidAmerican in April that included eight line-item charges for “Supplemental Ancillary Services.” Those charges, assessed during the week of the February 2021 winter storm, totaled almost $54,000, more than three times the amount of the company’s typical monthly bill.

The MidAmerican contract states that the fixed-price plan includes “costs associated with line loss…all charges assessed by ERCOT…and other costs required to facilitate delivery of electricity to Customer’s Delivery Points.”

But according to the lawsuit, MidAmerican ignored the terms of its fixed-price agreement and informed customers that “MidAmerican Energy Services will not increase the energy component of your bill, however, non-energy costs such as ancillary charges billed by ERCOT and your local utility, are not fixed and are passed through on your bill.”

J&M management kept the 55,000 square foot facility heated during the storm to keep pipes from freezing but did not operate. The company employs more than 40 full-time workers and manufactures a variety of consumer products from recycled plastic.

“MidAmerican has already acknowledged that it can’t pass through these same costs to their residential and small business customers, because of the Public Utility Commission’s consumer protection regulations,” says Derek Potts of the Potts Law Firm in Houston. “But the company’s still trying to unlawfully use a statewide disaster to take advantage of and price-gouge thousands of larger commercial customers.”

“They can’t justify passing through these costs when J&M and other customers agreed to a fixed-price electricity plan, which specifically includes any ancillary and ERCOT-assessed charges,” says Potts.

The lawsuit alleges violation of the Texas Deceptive Trade Practices Act, among other claims for breach of contract, negligence and misrepresentation.

The lawsuit is J&M Plastics, Inc. v. MidAmerican Energy Services, Case No.2:21-cv-00206, filed in the U.S. District Court for the Eastern District of Texas in Marshall.

© 2021 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 a 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 Renewables Acquires Iowa Wind Farm

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BHE Renewables, a subsidiary of Berkshire Hathaway Energy, has completed the acquisition of the 54-megawatt Independence wind energy project from RPM Access LLC, a small regional developer of utility grade wind generation projects in the Midwest.

Located near Ryan, Iowa, the project consists of 18 GE 2.8-megawatt wind turbines and two GE 2.3-megawatt wind turbines and will be completed in fourth quarter 2021. The project will serve Central Iowa Power Cooperative under a 20-year power purchase agreement signed in 2020 by RPM Access.

“The addition of the Independence wind project grows our wind energy portfolio to 1,719 megawatts and provides another opportunity for us to meet the growing demand for energy generated from renewable resources,” said Alicia Knapp, president and CEO of BHE Renewables. “We are excited about this project and look forward to finding more opportunities to own and operate renewable energy resources that support a cleaner energy future.”

BHE Renewables other 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; 212-megawatt Walnut Ridge project in Bureau County, Illinois; and the 300-megawatt Santa Rita wind project in Reagan and Irion counties in west-central Texas.

© 2021 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 a 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.