Warren Buffett is leaving little to chance when it comes to winning a piece of one of the biggest American power deals.
The billionaire’s Berkshire Hathaway Energy has spent the past two years pushing to overhaul how the Texas electrical grid works, and is now promoting a bill that would require the state to fund construction of natural gas-fired power plants that would be turned on when the system is under strain. Cost estimates range from about $10 billion to $18 billion.
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BHE is the only industry voice publicly backing the proposal, known as Senate Bill 6, which has passed the Senate and is winding its way through the House. It closely resembles a concept that BHE pitched to lawmakers in 2021 as a way to shore up the grid after a winter storm left millions without power for days.
That proposal fizzled out, but industry insiders say the revived effort — if it becomes law — would set up Buffett’s company to win a significant role in creating backup power. The plan calls for constructing as much as 10,000 megawatts of natural gas generation, enough to power 2 million homes, with a guaranteed return for the builder of as high as 10%.
They’re “positioned to jump and they want it,” said Michael Webber, an energy professor at the University of Texas at Austin.
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But there’s plenty of opposition against it. An analysis released last week showed the costs could reach $18 billion, much higher than BHE’s estimate of $10.8 billion. A perception is setting in among lawmakers that BHE is pushing a plan that seems designed to enrich the company at the expense of electricity customers and taxpayers.
“My concern is that this $10 billion of insurance money — it’s not our money, it’s the taxpayers’ money,” Senator Jose Menendez, a Democrat, said on the floor of the senate last week. He said this plan would build more capacity than is needed for the grid, and a better solution is making the whole system more efficient.
Read the full article here by Shelly Hagan, Advisor Perspectives.
