Berkshire Hathaway Sees Power Market as Electrons’

Source: By Maureen Malik, Bloomberg • Posted: Wednesday, April 6, 2016

Warren Buffett joked in his letter to shareholders last month that he’s “not ready for Tinder,” the dating app. Turns out, some of his holdings are ready for electronic matchups.

Berkshire Hathaway Inc.’s energy unit has been courting three dozen power transmission operators in the western U.S. to join its utilities and the California grid in trading power across their borders electronically and instantaneously. This means traders wouldn’t need to pick up the phone or send e-mails each hour to schedule the purchase and sale of renewables while hoping the sun and wind hold out until the next hour.

This so-called Energy Imbalance Market is the equivalent of creating a “ for electrons,” Jonathan Weisgall, vice president of government relations at Berkshire Hathaway Energy, said in an interview at the Bloomberg New Energy Finance Summit in Manhattan. “It’s a virtual Jackson Pollock painting of 38 balancing authorities.”

Weisgall said Tuesday he has been meeting regularly with the other utilities and transmission system operators to join the market to trade electricity at five-minute intervals instead of hourly. The California Independent System Operator Corp. and Berkshire Hathaway’s PacifiCorp utility in the U.S. Northwest launched the market in November 2014. NV Energy in Nevada joined its sister utility late last year.

Joining In

Joining the EIM would help make cheaper renewable power available more widely to consumers in the West, help reduce reliance on fossil fuels, cut emissions and create efficiencies, he said.

“This is not rocket science and this is really an IT solution — it didn’t require federal legislation, it did not require California legislation,” he said. But it did require approval from the Federal Energy Regulatory Commission, and that is part of the problem, he said.

Some publicly owned utilities are not subject to federal oversight, and they see the need to file for approval as a “slippery slope” to greater regulation, Weisgall said.

There is fear that California’s grid, which is overseen by a board appointed by the state, will take power from utilities in Wyoming or Idaho, he said.

“There is a potential parade of horribles,” he said. “There is a tremendous amount of education and outreach.”