Lawmakers Warn Buffett’s Coal May Hurt California’s Goals

Source: By Mark Chediak, Bloomberg News • Posted: Friday, February 5, 2016

California lawmakers expressed concerns in a letter Thursday that allowing a utility of Warren Buffett’s Berkshire Hathaway Inc. to join the state’s power grid may undermine the state’s clean energy goals by connecting it to coal plants.

Adding Berkshire Hathaway Energy’s PacifiCorp utility to the grid run by California Independent System Operator Corp. would bring with it states “heavily invested in coal and other high greenhouse gas emitting resources,” according to the letter to California Governor Jerry Brown. It was signed by six state lawmakers including Democratic State Senate President Pro Tempore Kevin De Leon and Speaker-Elect of the State Assembly Anthony Rendon.

The concerns threaten to set back efforts by California to form a regional grid, a move seen as needed in part to help the state achieve a higher share of intermittent solar and wind power. Legislation passed last year requires the state to get half of its electricity from renewable sources by 2030 and to move toward creating a western U.S. power system.

“The proposed regionalization must not undermine state sovereignty or cede authority of our state’s cutting edge clean energy and climate policies to others who do not have the same strong commitment and legal framework to reduce climate pollution and promote clean energy,” the lawmakers said in their letter.

PacifiCorp and California Independent System Operator said last year that they were studying the integration of their power transmission networks. The tie-up could produce between $3.4 billion and $9.1 billion in cost reductions through the first 20 years according to a study, PacifiCorp said in October.

Required Review

The letter raises points that California’s grid operator is required to study and report on to the legislature under a state law passed last year, said Steven Greenlee, a spokesman for the California Independent System Operator.

“We think that going toward regional markets would result in less coal being used overall and it would increase the use of renewables,” said Bob Gravely, a spokesman for PacifiCorp. “There is nothing about this integration proposal that could in any way weaken existing California law.”

PacifiCorp operates in six states including California, Oregon, Utah, Washington, Wyoming and Idaho. Coal makes up about 60 percent of its generation capacity, Gravely said.