At the close of the 5th VerdeXchange Conference in January, Jonathan Weisgall, Vice President at MidAmerican Energy Holdings Company, a subsidiary of Berkshire Hathaway, spoke with VerdeXchange/MIR on MidAmerican’s domestic and international focus and announced a new platform called MidAmerican Renewables. MidAmerican Energy is looking for opportunities, and Weisgall maintains that California’s environmental record, as well as its influence on national policy, makes renewable opportunities in the state particularly robust. The interview alludes to the many different kinds of public and private sector players who must come together to make such an opportunity feasible and worth pursuing.
"We are delighted to announce today a new platform that’s going to be called MidAmerican Renewables, a part of the company that will be looking at unregulated renewable energy opportunities."
Jonathan Weisgall (Mid American Energy Holdings):I’m Jonathan Weisgall, and I am Vice President for legislative and regulatory affairs with MidAmerican Energy Holdings Company. We’re a national energy company and a subsidiary of Berkshire Hathaway. We have a number of different connections to California. We actually began as a geothermal company several decades ago called Cal Energy, which is still one of our divisions, but we have gone on to become a much more regulated company.
We have two utilities: one in the Midwest and one in the Northwest. We have two natural gas pipelines, one of which brings about a quarter of the natural gas into California. These four platforms are highly regulated. The old cal energy geothermal is the unregulated part of the company.
We are delighted to announce today a new platform that’s going to be called MidAmerican Renewables, a part of the company that will be looking at unregulated renewable energy opportunities. We announced just last month that we will be investing in the Topaz Solar Project up in San Luis Obispo, which is just started construction and has a power purchase agreement to sell to Pacific Gas and Electric. We have also announced that we will be buying the Aqua Caliente Project, again as a partner. And while it is in Arizona, it sells into California and will also sell to Pacific Gas and Electric.
We are looking at other unregulated wind projects throughout the county, one in Illinois and others in several other states, and today we will be announcing the formation of that platform. It will have three separate divisions: there will be MidAmerican Renewables Geothermal, MidAmerican Renewables Wind, and MidAmerican Renewables Solar. It is an exciting new move for the company.
In a way it takes us back to our origins when we were doing 100 percent unregulated geothermal energy under the old legislation back in the 1970’s that broke the utility monopoly and gave earth to the renewable energy industry
VerdeXchange: What is the value for you to come to Verdexchange?
Jonathan Weisgall: Speaking personally for someone based in Washington DC, I can see all the key policy makers I need to see because Verdexchange, in one and a half days, gathers all the key policy makers at one conference. Especially in a situation where you’re proud of a new move by your company, where you’re putting new dollars into California and putting them into the renewable energy industry, what could be a better forum to make such an announcement? Whether they are legislators, regulators, policy makers, think tanks, or fellow energy company executives, what better forum to make that kind of announcement? It is terrific for us and it is great to have a forum like this in California to let the state know that a company like Berkshire Hathaway continues to see tremendous value in renewable energy, be it solar, wind, or geothermal.
VerdeXchange: What can people learn from the dialogue that takes place between policy makers, private industry, and regulators?
Jonathan Weisgall: You can probably learn best from the mistakes that have occurred and how to do it better. Whether that’s siting, whether that’s permitting, whether that’s transmission, it is these kinds of things where we will come into a new project and want to make it work. I don’t mean to put that in a negative light, but quite frankly, not every one of these projects gets off the ground. I guess the other thing here is that there are so many different parts to get a renewable project to fruition. In the Topaz Project we were not involved in the permitting, and we were not involved in the siting, but we are coming in with the capital to build it.
Each one of those building blocks is critical. What you have at a conference like this is the policy makers and regulators and others who are involved in all aspects of that, not to mention the transmission and the rest to get the electricity to the customers to make it all happen. These are very capital intensive projects, they are very complicated projects, and they use a cross section of skills ranging from a government relations person to engineers to lawyers for contracts, and of course the financial people to make that all happen. Everyone comes together here which makes it a good forum to see how others have proceeded, how others have tripped up, and how others have succeeded.
VerdeXchange: Speak to the unique quality of California as it relates to policy innovation. How do you think California can impact the rest of the country?
Jonathan Weisgall: I speak from a Washington DC point of view. It is no secret to say there is political gridlock on virtually any energy initiative, be it renewable energy or otherwise. As a result, the activities in the states are becoming more and more important. I wish for a smoke filled room back in Washington. I wish for parties to come together and say, “Here are the three things I need, here are the three things you need”, sit down and say, “Ok we’re going to pass six pieces of legislation. I happen to hate your three, I love my three. I love mine enough that it is worth it to put a package together”. That’s not happening. As a result we’ve got states like California moving forward with initiatives that I think will eventually become templates for the rest of the country.
The single best example is climate change cap and trade legislation, which failed utterly in Washington, is not even mentioned on capital hill, but is moving forward in California with the California Air Resources Board. I think when the climate is right in Washington and there is a perceived need to deal with the externalities of coal, the California cap and trade model will form a template for the country to adopt as a whole.
When you’ve got states that are laboratories of regulation, to use Justice Brandeis’ term, they are very important to watch. California, for decades, has been the leader in renewable energy initiatives, so it remains critically important and will remain important for the foreseeable future.
VerdeXchange: The other important dialogue that occurs at Verdexchange is between different countries. What is the value of that dialogue?
Jonathan Weisgall: Our company has distribution assets in the UK and we have generation assets in the Philippines. We actually were much more active internationally in the geothermal area in Indonesia and the Philippines a decade ago, but a company like ours is always looking for opportunities. The fact that we have a major presence in the UK has us always looking for opportunities in the UK, in Ireland, and in other areas where we are already established. The opportunities in the Philippines and other areas in Asia are very exciting for our company.
There is a balance between domestic and international opportunities. Right now we are more domestically oriented, but as I like to say: Warren Buffet is an equal opportunity capitalist. So where there are opportunities we will go and look for ways to use capital wisely. If those opportunities continue to show up in renewable energy, we will look at them whether they are in the US or abroad and that is where this forum provides an excellent opportunity to engage in that dialogue.