Why Berkshire Hathaway's utility is aiming for 100 percent renewable energy

Falling prices for solar and wind power, and support from customers, is helping the Iowa utility owned by Warren Buffett’s Berkshire Hathaway gain on its goal of generating 100 percent renewable energy for its customers, a company executive said.

MidAmerican Energy, one of four utilities that Berkshire owns, is in one of the windiest places in the United States. As the cost of wind and solar power continues to fall, it makes sense for the company to boost investment in renewables, said Jonathan Weisgall, vice president for government relations at Berkshire Hathaway Energy.

But a major force driving the utility’s renewable energy plans are its customers, who want more clean energy.

“We don’t have a single customer saying, ‘Will you build us a 100 percent coal plant?'” Weisgall said, speaking Thursday at the Pathways to 100% Renewable Energy conference in Berkeley, California. “Google, Microsoft, Kaiser Permanente — all want 100 percent renewable energy. We’re really transitioning from a push mandate on renewable energy, to more of a customer pull.”

Aggressive state and city policies also are driving the push towards renewables.

In Iowa, MidAmerican operates 4,400 megawatts of wind farms, having invested $7.5 billion, and the utility plans to add 1,600 megawatts of wind. By 2020, MidAmerican plans to produce enough renewable energy, primarily wind, to match 95 percent of its Iowa customers’ needs, Weisgall said.

The push for renewables in Iowa makes a difference, as the state continues to rely on coal as the primary fuel for generating electricity, at more than 45 percent, while wind supplies 37 percent, and solar panels produce less than 1 percent, according to the U.S. Energy Department.

The increase in renewables won’t result in rate increases for utility customers, Weisgall said, even though the utility will be paying almost $2 billion over the next 30 years in landowner payments and taxes.

“That’s why farmers love renewable energy,” he said. “It’s a reliable secondary source of income against the fluctuating costs of soybeans and corn.”

The Iowa utility wouldn’t be able to accomplish these goals without the Midcontinent Independent System Operator, a 15-state power market through which MidAmerican and other utilities and power producers buy and sell electricity.

“When the wind is not blowing, obviously, we buy into that market,” Weisgall said. “When there’s excess wind, because we’ve exceeded 100 percent, we sell into that market.”

Meanwhile, in Nevada, Berkshire’s NV Energy utility recently committed to double the amount of renewable energy it uses to serve customers, from 24 percent currently to a percentage in the high 40s by 2023. Most of those resources are geothermal and solar power.

Reaching that level shouldn’t be difficult, given the low prices the utility is seeing for solar farms backed by energy storage devices. In a recent request for proposals, NV Energy has seen bids for solar power, backed by storage, for less than $30 a megawatt-hour, Weisgall said, adding that it was “extraordinary” to see such low prices.