Dive Brief:
- Warren Buffett has already "poured billions and billions and billions of dollars in retained earnings, and several billion of additional equity" into the electric power industry but, as far as he's concerned, there's more to come.
- "[W]e're going to keep doing that as far as the eye can see," Buffett said at Edison Electric Institute's (EEI) annual meeting, noting that he likes the industry's opportunities for reinvestment and more acquisitions.
- Although Buffett forgot how much Berkshire Hathaway Energy (formerly MidAmerican Energy Holdings) has invested in renewables to date ($15 billion), the Oracle indicated that “there’s another $15 billion ready to go, as far as I’m concerned.”
Dive Insight:
Buffett first entered the power industry when he bought MidAmerican Energy in 2000. He subsequently bankrolled three acquisitions – PacifiCorp, NV Energy and AltaLink – and $15 billion-worth of renewable generation. And in a letter to shareholders earlier this year, Buffett indicated that "NV Energy will not be MidAmerican’s last major acquisition."
His recent focus on the power sector "is justified both by our past experience and by the knowledge that society will forever need massive investments in [...] energy," Buffett wrote in the letter. "It is in the self-interest of governments to treat capital providers in a manner that will ensure the continued flow of funds to essential projects.”
“MidAmerican can make these investments because it retains all of its earnings,” Buffett said. “Here’s a little known fact: Last year MidAmerican retained more dollars of earnings – by far – than any other American electric utility. We and our regulators see this as an important advantage – one almost certain to exist five, ten and twenty years from now.”
“So far, we’ve stayed rich,” Buffett added at EEI's convention.
