Berkshire Hathaway Energy reflects on quarterly performance

Berkshire Hathaway Energy said recently in a Securities and Exchange Commission (SEC) filing that its affiliate companies financial performance during the second quarter were affected by factors ranging from fuel costs and power costs to monetary factors.

Berkshire Hathaway Energy is the utility holding company owned by Warren Buffet’s Berkshire Hathaway (NYSE:BRK.A;BRKB.B).

Net income attributable to BHE shareholders decreased $22m for the second quarter of 2016 compared to 2015 due to many factors.

These include:

  • PacifiCorp‘s net income increased primarily due to higher margins of $11m. Margins increased primarily due to lower coal costs, higher retail rates and lower purchased electricity, partially offset by lower retail customer load and lower wholesale electricity revenue from lower volumes.
  • MidAmerican Funding’s net income increased due to higher electric margins of $34m, lower fossil-fueled generation maintenance of $3m and higher recognized production tax credits of $2m, substantially offset by lower other income tax benefits of $20m due primarily to the effects of ratemaking, higher depreciation and amortization of $11m due to wind-powered generation and other plant placed in-service and higher interest expense of $5m primarily due to the issuance of first mortgage bonds in October 2015.
  • NV Energy‘s net income decreased due to higher underlying operating expense of $5m due to higher property and other taxes and higher depreciation and amortization of $2m due to higher plant in-service, partially offset by higher electric margins of $7m.
  • Northern Powergrid‘s net income decreased largely due to the stronger United States dollar of $5m.
  • BHE Pipeline Group‘s net income increased due to lower operating expenses from the timing of overhauls and pipeline integrity projects, higher transportation revenues from expansion projects and lower interest expense due to the early redemption in December 2015 of the 6.676% Senior Notes at Kern River, partially offset by higher depreciation expense.
  • BHE Transmission‘s net income increased $20m from higher earnings at AltaLink of $15m primarily due to additional assets placed in-service, changes in contingent liabilities in 2016 and the 2015-2016 GTA decision received in May 2016, partially offset by the stronger United States dollar of $2m, and $5m due to higher equity earnings at Electric Transmission Texas, LLC from continued investment and additional plant placed in-service.
  • BHE Renewables‘ net income decreased primarily due to unfavorable changes in the valuations of a power purchase agreement derivative and interest rate swaps and lower revenue at Imperial Valley and the Solar Star projects, partially offset by higher production tax credits of $12m, lower geothermal maintenance costs and lower project acquisition costs.

BHE, through these businesses, owns four utility companies in the United States serving customers in 11 states, two electricity distribution companies in Great Britain, two interstate natural gas pipeline companies in the United States, an electric transmission business in Canada, interests in electric transmission businesses in the United States, and a renewable energy business.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at