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Released April 21, 2017 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Warren Buffet's Berkshire Hathaway Incorporated (NYSE:BRKA) (Omaha, Nebraska) has a long track record of making shrewd investments decisions, sometimes in out-of-favor companies, sticking with them for the long term and eventually making a ton of money. Buffet's patience and willingness to go against the grain has paid off handsomely for Berkshire Hathaway's stockholders, who have seen the value of their shares double over the last five years, to about $250,000 today. By contrast, over that five-year period, the Standard & Poor's 500 Index rose about 68%.
Years ago, Berkshire Hathaway began purchasing electric utilities--including MidAmerican Energy (Des Moines, Iowa), PacifiCorp (Portland, Oregon) and NV Energy (Las Vegas, Nevada). Today, they all operate under the Berkshire Hathaway Energy umbrella.
Using those utilities, Berkshire Hathaway has been making big, long-term bets on renewable energy. That may not seem to run counter to thinking in the utility industry right now, but the size, and thus the boldness, of Buffet's bets stand out. For example, the MidAmerican Energy unit is investing about $3.6 billion to build about 2,000 megawatts (MW) of new wind energy in Iowa. For more on that, see December 19, 2016, article - Wind XI Project Adds Up to 2,000 Megawatts of New Wind Power in Iowa.
Earlier this month, Berkshire Hathaway subsidiary PacifiCorp filed its long-term integrated resource plan (IRP) with utility regulators in six western states. The utility wants to spend several billion dollars to bring on 3,500 MW of renewable generation over the next 20 years. Billions more will be spent constructing transmission lines, mainly in Wyoming and Idaho, to bring the renewable energy from where it will be generated to where it will be consumed.
"These investments will significantly increase the amount of clean renewable energy serving customers and reduce costs at the same time," Stefan Bird, president and chief executive of Pacific Power, a unit of PacifiCorp, said April 4 in releasing the IRP. "This is a win-win and represents our continued commitment to both reduce the environmental impact of the energy we produce and keep costs low."
"The primary objective of the IRP is to identify the best mix of resources to serve customers in the future," PacifiCorp said in releasing the IRP, a two-volume, 806-page document that must be reviewed and approved by utility commissions in six Western states. "The best mix of resources is identified through analysis that measures cost and risk," the utility added. It said the IRP was a "cost-conscious plan to transition to a cleaner energy future with near-term investments in both existing and new renewable resources, new transmission infrastructure, and energy efficiency programs."
Over the next two decades, PacifiCorp wants to add 1,959 MW of new wind generation resources, repower about 905 MW of Wyoming wind resources, build 1,040 MW of new solar resources and deploy about 2,077 MW of incremental energy efficiency resources and 365 MW of new direct load control capacity.
The first tranche of new assets, valued at about $3.5 billion, will be 1,100 MW of new windpower resources in Wyoming, which the utility wants to be operating by yearend 2020 to take advantage of federal production tax credits (PTCs), which are due to sunset at the end of that year. That new wind generation would connect to a new 140-mile, 500 kV transmission line running from the Aeolus substation near Medicine Bow, Wyoming, to the Jim Bridger power plant. This line is a sub-segment of the $3.3 billion Energy Gateway West transmission project. PacifiCorp also plans to repower about 905 MW of Wyoming wind power by 2020.
Beyond 2020, the IRP continued, PacifiCorp wants to add another 859 MW of new wind--85 MW of which would be sited in Wyoming and would come online in 2031, and 774 MW of new wind generation in Idaho, coming online in 2036.
PacifiCorp also informed Oregon's utility regulators of its desire to add 1,040 MW of new solar generation, mostly in Utah, that would begin operating over the 2028-2036 timeline.
There was no price tag affixed to the port-2020 wind generation or the 1,040 MW of solar generation it wants to bring on starting in 2028.
The Portland-based utility also wants to reduce its existing coal-fired generation capacity by 3,650 MW through the end of 2036. It doesn't plan to build any new gas-fired generation until 2029. All of these plans are subject to technology developments, customer load growth, fuel trends and regulatory approval.
PacifiCorp's moves are driven, in part, by tougher state laws regarding coal-fired generation, higher state renewable portfolio standards (RPS) and consumers' and businesses' desire for cleaner forms of electricity. For more on that, see March 23, 2016, article -- Oregon Bans Coal, Doubles its Renewables Mandate.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Years ago, Berkshire Hathaway began purchasing electric utilities--including MidAmerican Energy (Des Moines, Iowa), PacifiCorp (Portland, Oregon) and NV Energy (Las Vegas, Nevada). Today, they all operate under the Berkshire Hathaway Energy umbrella.
Using those utilities, Berkshire Hathaway has been making big, long-term bets on renewable energy. That may not seem to run counter to thinking in the utility industry right now, but the size, and thus the boldness, of Buffet's bets stand out. For example, the MidAmerican Energy unit is investing about $3.6 billion to build about 2,000 megawatts (MW) of new wind energy in Iowa. For more on that, see December 19, 2016, article - Wind XI Project Adds Up to 2,000 Megawatts of New Wind Power in Iowa.
Earlier this month, Berkshire Hathaway subsidiary PacifiCorp filed its long-term integrated resource plan (IRP) with utility regulators in six western states. The utility wants to spend several billion dollars to bring on 3,500 MW of renewable generation over the next 20 years. Billions more will be spent constructing transmission lines, mainly in Wyoming and Idaho, to bring the renewable energy from where it will be generated to where it will be consumed.
"These investments will significantly increase the amount of clean renewable energy serving customers and reduce costs at the same time," Stefan Bird, president and chief executive of Pacific Power, a unit of PacifiCorp, said April 4 in releasing the IRP. "This is a win-win and represents our continued commitment to both reduce the environmental impact of the energy we produce and keep costs low."
"The primary objective of the IRP is to identify the best mix of resources to serve customers in the future," PacifiCorp said in releasing the IRP, a two-volume, 806-page document that must be reviewed and approved by utility commissions in six Western states. "The best mix of resources is identified through analysis that measures cost and risk," the utility added. It said the IRP was a "cost-conscious plan to transition to a cleaner energy future with near-term investments in both existing and new renewable resources, new transmission infrastructure, and energy efficiency programs."
Over the next two decades, PacifiCorp wants to add 1,959 MW of new wind generation resources, repower about 905 MW of Wyoming wind resources, build 1,040 MW of new solar resources and deploy about 2,077 MW of incremental energy efficiency resources and 365 MW of new direct load control capacity.
The first tranche of new assets, valued at about $3.5 billion, will be 1,100 MW of new windpower resources in Wyoming, which the utility wants to be operating by yearend 2020 to take advantage of federal production tax credits (PTCs), which are due to sunset at the end of that year. That new wind generation would connect to a new 140-mile, 500 kV transmission line running from the Aeolus substation near Medicine Bow, Wyoming, to the Jim Bridger power plant. This line is a sub-segment of the $3.3 billion Energy Gateway West transmission project. PacifiCorp also plans to repower about 905 MW of Wyoming wind power by 2020.
Beyond 2020, the IRP continued, PacifiCorp wants to add another 859 MW of new wind--85 MW of which would be sited in Wyoming and would come online in 2031, and 774 MW of new wind generation in Idaho, coming online in 2036.
PacifiCorp also informed Oregon's utility regulators of its desire to add 1,040 MW of new solar generation, mostly in Utah, that would begin operating over the 2028-2036 timeline.
There was no price tag affixed to the port-2020 wind generation or the 1,040 MW of solar generation it wants to bring on starting in 2028.
The Portland-based utility also wants to reduce its existing coal-fired generation capacity by 3,650 MW through the end of 2036. It doesn't plan to build any new gas-fired generation until 2029. All of these plans are subject to technology developments, customer load growth, fuel trends and regulatory approval.
PacifiCorp's moves are driven, in part, by tougher state laws regarding coal-fired generation, higher state renewable portfolio standards (RPS) and consumers' and businesses' desire for cleaner forms of electricity. For more on that, see March 23, 2016, article -- Oregon Bans Coal, Doubles its Renewables Mandate.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
