Warren Buffett had to look no further than his own Vice Chairman for his latest acquisition. In its just released quarterly report for Q2 2022, Berkshire Hathaway noted that in June it had acquired Vice Chairman Greg Abel’s 1% stake in Berkshire Hathaway Energy for $870 million.
The purchase was at a significant premium and Berkshire took a $362 million charge to capital.
With the acquisition, Berkshire now owns 92% of BHE, with the family of the late Berkshire board director Walter Scott owning the remaining 8%. It is considered likely that Berkshire will acquire that stake as well.
Greg Abel, who is currently overseeing Berkshire’s day-to-day operations, and will take over at some point for Warren Buffett as Chairman, has not commented on the transaction.
In 2000, Berkshire Hathaway made it first acquisition into the energy sector when it acquired MidAmerican Energy Holdings Company, later renamed Berkshire Hathaway Energy, for a value of approximately $9 billion. Other investors, who in total invested approximately $300 million, were Walter Scott, the former chairman of Peter Kiewit Sons’ Inc. and MidAmerican’s largest individual shareholder, and certain Scott family interests, and David L. Sokol, who at the time was the Chairman and Chief Executive Officer of MidAmerican. At the time, Greg Abel was MidAmerican’s president.
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 Energy and NaturEner USA, LLC have applied to the Federal Energy Regulatory Commission for BHE to acquire from NaturEner USA its 100 percent upstream equity interests in the NaturEner Wind Project Companies.
The transaction will give BHE roughly 400 MW of wind generation in Montana from three wind farms: Glacier I, Glacier II and Rim Rock.
Glacier 1 operates a 106.5 MW wind-powered generating facility in Glacier and Toole Counties, Montana, and limited interconnection facilities, and is interconnected to the NorthWestern Energy transmission system.
Glacier 2 owns and operates a 103.5 MW wind-powered generating facility in Glacier and Toole Counties, Montana, and limited interconnection facilities, and is interconnected to the Glacier Electric Cooperative transmission system.
Rim Rock owns and operates a 189 MW wind-powered generating facility in Glacier and Toole Counties, Montana, which is interconnected with the transmission facilities of MATL LLP.
BHE Transmission wholly owns MATL, which owns a 230-kV merchant transmission line running from Great Falls, Montana to Lethbridge, Canada.
Berkshire Hathaway Energy and NaturEner USA have requested a shortened comment period of 21 days to allow for the issuance of an order on or before October 3, 2022.
According to their application, a shortened comment period and expedited consideration are appropriate because the Proposed Transaction does not involve a merger, does not require an Appendix A analysis, and is consistent with Commission precedent.
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’s CalEnergy has purchased two large solar farms, Suntop and Gunnedah, totaling 345 MWp in New South Wales, Australia, from Canadian Solar Inc.
The two projects have long-term offtake agreements with a global leading technology company and will help support corporate decarbonization efforts. The projects have reached substantial completion and are expected to generate over 700,000 MWh of green electricity annually. This is equivalent to avoiding more than 450,000 tons of CO2-equivalent emissions annually or taking approximately 100,000 cars off the road each year.
In addition to the sale of these projects, Canadian Solar and CalEnergy also entered into a multi-year development services agreement that provides a framework for the companies to continue to work together to build out Canadian Solar’s growing renewable energy pipeline in Australia.
“We are delighted to work with CalEnergy in Australia to grow their renewable energy portfolio. The sale of these projects in New South Wales paves the way for a strong collaboration between our respective companies. In Australia, we have now brought seven development projects to NTP (notice-to-proceed) and beyond, and continue to develop and grow our multi-GW solar and storage pipeline. I look forward to continuing to contribute to Australia’s decarbonization and renewable energy growth ambitions.” said Dr. Shawn Qu, Chairman and CEO of Canadian Solar.
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 Energy’s BHE Canada announced that the Rattlesnake Ridge Wind Farm is now commercially operational and supplying low-cost, renewable energy to Alberta’s grid.
The 26-turbine wind farm is located southwest of Medicine Hat. It is the company’s first wind farm in Canada and will provide Alberta consumers with 130 megawatts of energy, enough to power the equivalent of 78,000 homes.
The wind farm is privately financed by BHE Canada through a combination of equity and debt, requiring no government subsidies or tax incentives to support its operation.
“This is an exciting milestone for us, and for Alberta’s energy industry, with new grid-scale wind generation constructed and operating without government subsidies,” said Ed Rihn, President and CEO of BHE Canada. “We’re proud to facilitate a more sustainable energy future for Albertans and look forward to more investment opportunities in Alberta and across Canada.”
BHE Canada signed power purchase agreements with four Canadian corporate partners, providing them with environmental attributes to meet their environmental targets and offset existing carbon production.
Construction began in 2020 with Renewable Energy Systems (RES) providing construction services. RES has extensive experience in building large-scale renewable energy projects around the world. An estimated 150 jobs were provided to local Alberta contractors and suppliers during peak construction.
“The Rattlesnake Wind project is our 20th major renewable construction project in Canada, and we are pleased to see this project achieve commercial operation,” said Liam Duffy, RES General Manager of Construction, Canada. “The addition of this facility showcases our commitment to the construction of wind energy and brings RES closer to fulfilling our vision of a future where everyone has access to affordable zero carbon energy.”
To celebrate the milestone, a ribbon-cutting event was held at the Rattlesnake project site just outside of Medicine Hat. Representatives from BHE Canada and RES were joined by Mr. Grant Hunter, MLA Taber-Warner, and Craig Widmer, Reeve of County of Forty Mile, to help mark the occasion.
“Southern Alberta is home to some of the best supply of wind energy in the world. It is with pleasure that I congratulate BHE Canada on developing the Rattlesnake Ridge Wind Power Project,” said Grant Hunter, MLA Taber-Warner. “The County of Forty Mile will greatly benefit from this renewable wind project, and so will 78,000 homes in Alberta. Rattlesnake stands on its own without any government funding, as Albertans would expect.”
“With southern Alberta being the sunniest and relatively breezy at times, our area provides an exceptional opportunity for renewable energy companies to capture these resources and provide the province with clean renewable energy,” said Craig Widmer, Reeve of County of Forty Mile.
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 Energy’s PacifiCorp has received final approval from the Bureau of Land Management for the construction of the 416-mile Energy Gateway South Transmission line.
The Notice to Proceed, issued by the BLM Wyoming State Office in partnership with the agency’s Colorado and Utah State Offices, authorizes PacifiCorp to begin construction of the 500-kilovolt transmission line, which will run from the Aeolus Substation near Medicine Bow, Wyoming, through Colorado, and ends at the Clover Substation near Mona, Utah.
The project is part of PacifiCorp’s larger Energy Gateway Transmission Expansion, a multi-year plan to add approximately 2,000 miles of new transmission lines across the western United States.
The BLM worked with PacifiCorp, the National Fish and Wildlife Foundation, the Wyoming Wildlife and Natural Resource Trust, federal partners, and the states of Wyoming, Colorado, and Utah to establish an innovative and collaborative approach to mitigating impacts to be caused by the construction of the line. This approach will fund and establish processes for selecting mitigation projects to offset impacts to Greater Sage-Grouse, lands with wilderness characteristics, and other natural resource values across Wyoming, Colorado, and Utah.
“BLM-managed public lands will continue to serve an important role in modernizing the nation’s infrastructure as we advance President Biden’s goal of achieving a net-zero economy by 2050,” said Tracy Stone-Manning, Director of the Bureau of Land Management. “As we build toward a clean energy future, we must make sure we do so responsibly. Approving large-scale transmission projects like this are key to bringing renewable energy online, while creating good-paying union jobs and helping bolster community resilience against the climate crisis.”
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’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.”
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.
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.
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.
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.
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’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.
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 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
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.