Author Topic: BNSF and MidAmerican  (Read 37958 times)

dcollon

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Re: BNSF and MidAmerican
« Reply #90 on: May 14, 2014, 12:52:34 PM »
WSJ: Farmers Grow Worried

The coldest, snowiest winter in years bogged down the rail system, the chief means of transporting crops
when rivers freeze across the northern U.S. Plunging temperatures forced BNSF Railway Co., Canadian
Pacific Railway Ltd. and other railroads to run shorter trains, increasing traffic on tracks spanning the
Midwest.


fareastwarriors

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Berkshire Hathaway Energy
« Reply #91 on: June 09, 2014, 04:51:54 PM »

longinvestor

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Re: Berkshire Hathaway Energy
« Reply #92 on: June 12, 2014, 10:34:10 AM »
http://www.bloomberg.com/news/2014-06-09/buffett-to-expand-energy-wager-as-far-as-the-eye-can-see.html


Buffett to Expand Energy Wager ĎAs Far as the Eye Can See'

The deregulated energy market and the sporadic nature of green energy are leading a massive shift in the energy business. 

California ISO (Independent System Operator) manages the supply-and-demand of energy as an independent entity. They are kinda like the Air traffic controllers. They act as the facilitator of market forces in energy. They came into existence due to the energy policy act of 1992.

In October 2014, both NV energy and PacifiCorp will join the California ISO. NV Energy: http://www.elp.com/articles/2014/04/nv-energy-files-to-be-in-california-iso-energy-imbalance-market.html; PacifiCorp: See attachment. Basically, this opens up much of the Western US market to Berkshire's energy production and helps them with the fundamental imbalance issue. When and where the wind blows or the Sun shines does not match where people live and when they consume energy. 

Then we have Alberta's grid operator, AltaLink which will become part of Berkshire Energy in December.

Also, Berkshire and Transalta, another Alberta producer have partnerships in place to build natural gas fired plants, the first on which will be completed this year!


The geographical adjacency is hard to miss! Looks like the "investment as far as the eye can see",  will happen in the western USA (Canada, like in Alberta?). That is one hell of a big place. Moving power over those kind of distances is probably why they bought AltaLink.

And with so much of the capital going into energy, Abel looks more and more to be our man.



« Last Edit: June 13, 2014, 09:27:52 AM by longinvestor »

original mungerville

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Re: BNSF and MidAmerican
« Reply #93 on: June 13, 2014, 07:50:14 PM »
What type of impact does this have on profits? Any idea?

longinvestor

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Re: BNSF and MidAmerican
« Reply #94 on: June 14, 2014, 04:24:01 PM »
What type of impact does this have on profits? Any idea?

Much has been discussed about Berkshire Energy's "Utility-like" return of ~ 12%. Plus the uncapped capacity to receive investment tax credits. At the Berkshire level, is it 12.1% or much more? That number is unknown as yet.

What is sinking in for me is that at 10x today's size,how big the tax credits could be? And also how easy the incremental capital allocation becomes with such a large, contiguous territory which has everything covered. Oil, natural gas, coal, sun, geothermal, BNSF ...lots of 1 foot hurdles. A big elephant, only happens over a long time.
« Last Edit: June 14, 2014, 04:39:04 PM by longinvestor »