Buffett-owned MidAmerican spawns merchant division to sell green power
The announcement last week by Des Moines, Iowa-based MidAmerican follows a recent flurry of investment in renewable energy projects, including a handful of wind farms in Iowa and Illinois and two large solar projects in the desert Southwest (ClimateWire, Jan. 24). MidAmerican is owned by Berkshire Hathaway, the investment firm backed by Buffett’s estimated $39 billion in personal wealth.
“MidAmerican Renewables is open for business,” declared Greg Abel, the firm’s chairman, president and CEO, in a statement last week. “We believe the need for renewable energy will continue to grow, and we are excited to be a leader in this area.”
The new business unit will be headed Bill Fehrman, president and CEO of MidAmerican Energy Co., the rate-based utility that sells electricity and natural gas to roughly 750,000 customers in Iowa, Illinois, Nebraska and South Dakota.
Tina Potthoff, a spokeswoman for MidAmerican Energy Holdings, said the company will not place all of its renewable energy assets under the new merchant power company. Roughly 1,800 megawatts of wind power in Iowa, for instance, will be used to meet its regulated utility’s renewable energy goals. MidAmerican Energy Co., provides electricity for approximately 700,000 customers in Iowa, Illinois and South Dakota.
But the firm’s most recent acquisition, the 81 MW Bishop Hill II wind farm being built in Henry County, Ill., will send all of its generation to Ameren Corp., to be used in its Illinois service territory.
Looking to buy more projects
The new MidAmerican Renewables will include four subunits — MidAmerican Wind, MidAmerican Geothermal, MidAmerican Solar and MidAmerican Hydro — that will operate as limited liability corporations. They will be supported by a project development and commercial management division.
Tom Budler, MidAmerican Energy’s general manager of wind development, has been promoted to president of MidAmerican Wind, where he will shift focus from adding to the regulated utility’s renewables portfolio to selling wind power outside MidAmerican’s service territory.
MidAmerican Solar, to be headquartered in Phoenix, will oversee the company’s recent solar plant acquisitions: the 550 MW Topaz solar farm in San Luis Obispo County, Calif., and a 49 percent stake in the 290 MW Agua Caliente project in Yuma County, Ariz. Both Topaz and Agua Caliente have long-term power purchase agreements with California’s PG&E Corp. Paul Caudill, president and CEO of the North American division of Phoenix Solar AG, will head the new firm.
MidAmerican’s California-based subsidiary CalEnergy U.S., which operates a 327 MW geothermal plant in the Imperial Valley as well as combined-cycle co-generation gas plants in Texas, New York, Illinois and Arizona, will become MidAmerican Geothermal. It will be headed by current CalEnergy President Steve Larson.
Finally, the company will offer power from its 10 MW hydropower facility in Hawaii called the Wailuku project, Potthoff said.
Potthoff said MidAmerican Renewables is positioned to begin selling power to other utilities immediately, and she indicated that more acquisitions of renewable energy plants could be coming in the future. “We’re definitely looking at projects,” she said. “The main message is that we’re open for business. But we want firms to come to us if they believe they have a project that makes environmental and economic sense.”