PacifiCorp and NV Energy also played an energy initiative in Silver State. Some of the big casinos – the big electricity consumers – have been pushing for a move from a monopoly model to a competitive retail electricity market by 2023. The activities of a company like BHE, which has no interest in San Diego, would not normally arouse much curiosity locally. But BHE has expressed interest in winning the city`s new “franchise deal,” which has long been owned by San Diego Gas & Electric, and the prospect of a new utility in the city has drawn attention to who and what BHE is. One of the keys to Berkshire Hathaway Energy`s valuation is to look at the price paid for the shares the company bought back in 2020 from Walter Scott, the 89-year-old longtime director of Berkshire Hathaway, who also sits on the board of Directors of Berkshire Hathaway Energy or BHE. “Berkshire Hathaway, just like SDG&E, is a for-profit company and they will do what makes them money,” Siegele said. “And we, as the city of San Diego, need to make sure we hold them accountable and make sure we get what we want from Berkshire Hathaway, SDG&E or any other bidder.” The deal, which was struck in early 2018, was the largest in Sempra`s history and made headlines for the San Diego-based company and its new CEO Jeff Martin. A recent one from Berkshire Hathaway Inc. Submissions showed that BHE`s parent company had record cash of $137 billion and equivalent financial instruments at the end of the first quarter, leaving plenty of room for further acquisitions. While BHE may not be well known in San Diego, the company`s various stores serve 8.8 million customers.
BHE has companies in 18 states and also owns a utility company in England and a power transmission company in Alberta, Canada. “This underscores the importance of the franchise agreement and the importance of the clean energy requirements that the city (San Diego) brings to it,” said Tyson Siegele, an energy analyst at the Protect Our Communities Foundation, a local consumer and environmental group. “If we choose Berkshire Hathaway, we must ensure that the energy provided by Berkshire meets our climate protection goal of 100% clean energy by 2035, just like any other utility.” Once completed, 12 sites across the county will improve grid reliability and increase energy efficiency. In 2017, it looked like Buffett and Berkshire Hathaway Energy would buy Oncor, Texas` largest utility, for $9 billion. But Sempra came in and offered a higher purchase price. Buffett, as he has done in the past, refused to engage in a bidding war, and Sempra acquired the Dallas-based company for $9.45 billion. A 2006 California law prevents most utilities from making long-term investments in coal, but an exception in the law allowed PacifiCorp to continue investing in its coal fleet because the company has a small footprint in the state. Berkshire Hathaway Energy (known as MidAmerican Energy Holdings Company until 2014) is a holding company 90% owned by Berkshire Hathaway. Berkshire has held a majority stake since 1999.  The company also controls electricity distribution companies in the UK and Canada.
 According to a PowerPoint presentation given by BHE`s CFO last November, the company`s strategy is to “invest in organic growth,” acquire companies, and then reinvest in their assets. In 2018, BHE generated revenue of $19.8 billion and net income of $2.6 billion. “They control a lot of the assets in California,” said Gary Ackerman, a utility and energy consultant with more than four decades of experience in energy issues affecting western states. “They know how to play the game.” A large energy storage project – enough to power 110,000 homes for 2 hours – arrives in San Diego Berkshire Hathaway Energy owns the following companies: BHE is committed to closing many facilities in the coming years and increasing investment in renewable energy. It says it has reduced coal in its portfolio from 58% in 2006 to 26% in September 2019, and its utilities plan to reduce their coal production from 10,499 megawatts in 2013 to 4,125 megawatts by 2037. BHE is also one of the largest owners of renewable energy assets in the country, with $34 billion invested by the end of 2020. BHE is a major owner of wind energy, with Buffett noting in his letter a year ago that the company`s Iowa utility can meet all of its electricity needs with wind power while maintaining sufficient generation capacity from fossil fuels. to maintain reliability. BHE is also the parent company of NV Energy, the energy company that serves 2.4 million electricity customers throughout Nevada. BHE`s subsidiaries have a strong presence in the western states. Fourteen years ago, today`s BHE acquired electricity company PacifiCorp for $5.1 billion. A year ago, Buffett wrote that BHE had held back a profit of $28 billion since Berkshire took control of the company.
BHE still has a significant amount of coal generation capacity, mainly on the West Coast. Buffett noted in his letter to shareholders: “BHE started this project in 2006 and expects it to be completed by 2030 – yes, 2030. The advent of renewable energies has made our project a social necessity. Historically, coal-fired power generation, which has been widespread for a long time, has been located near huge population centers. However, the best locations for the new world of wind and solar power generation are often in remote areas. When BHE assessed the situation in 2006, it was no secret that huge investments needed to be made in Western transmission lines. However, very few companies or government agencies were able to raise their hands after adding up the cost of the project. Berkshire Hathaway (BRK. A and BRK. B) owns 91% of BHE. Scott and various interests in the Scott family hold 8%, while Greg Abel, former CEO of BHE and now vice president of Berkshire, owns 1%.
BHE shares are not listed on the stock exchange. Coal accounted for 43% of BHE`s electricity generation last year and 48% of the capacity of PacifiCorp`s assets. According to PacifiCorp`s 2019 Integrated Resource Plan, the company holds a 100% stake in 11 coal-fired power plants and a partial stake in 13 others, primarily in Wyoming and Utah. Less well known to casual observers is that Berkshire`s list of subsidiaries, ranging from GEICO insurance to BNSF Railways to Dairy Queen, also includes a holding company that operates in the electricity and utility sector – Berkshire Hathaway Energy, or BHE for short….