Berkshire Hathaway pitches a plan for regulated generation inside ERCOT.


Berkshire Hathaway Energy – billionaire investor Warren Buffett’s company — has pitched Texas lawmakers on a plan to build 10 new natural gas plants for $8 billion and adding a new charge on electric bills to pay for them.

According to the online Texas Tribune, the plan has been floated over the last week and a half by Berkshire Hathaway Energy representatives, who have been meeting with lawmakers and state leaders in Austin. The executives pitched the idea as a response to the widespread and devastating electricity outages last month.

Under the proposal, a new company would be formed to build and maintain plants that would sit idle during normal times, but fire up during emergencies. The new company likely would be called the “Texas Emergency Power Reserve,” according to a March 24 article in The Texas Tribune. ERCOT, the operator of the state’s primary power grid, would order the Texas Emergency Power Reserve plants to come online during severe energy shortage conditions, according to the Tribune’s reporting.

According to a Berkshire Hathaway presentation, residential customers would pay a monthly charge for the reserve plants estimated as $1.42, while commercial customers would pay an estimated $9.61 per month and industrial customers would pay an estimated $58.94 per month. The company’s pitch to state leaders also included the results of a recent poll suggesting that Texans would support a slight increase in their utility bills if it meant improved reliability, according to the Texas Tribune.

Hired Lobbyists

The Tribune also reported that Berkshire Hathaway has hired eight lobbyists in Austin at a cost of more than $300,000, and that company executives met privately with key legislative leaders, including Lt. Gov. Dan Patrick, who presides over the Senate, and House Speaker Dade Phelan, R-Beaumont. However, since the bill filing deadline has passed, any legislative action on the proposal would require an amendment on a previously filed bill.

“If approved, the deal would signal a move away from decades of a competitive electricity market in Texas in which all power generators in Texas are paid for the energy they produce and sell, rather than the power they could potentially generate,” wrote The Texas Tribune’s Cassandra Pollock and Erin Douglas, in their March 24 report.

“Under Berkshire Hathaway’s plan, ERCOT would control when the new power plants are activated to avoid the threat of such widespread power outages, and customers would pay a fixed fee only to cover the project’s costs, while the price for energy supplied to the market would go to the state, not the company. It’s a similar model to how transmission and distribution utility companies are regulated,” the Tribune reported.

You can read the full Texas Tribune story, here.

— R.A. Dyer