Warren Buffett's 1999 Utility Bet Now Worth $90B: The Success Story Of Berkshire Hathaway Energy

Warren Buffett’s foresight in 1999 to invest in a small Midwestern utility company, MidAmerican Energy, has paid off handsomely as it has grown into one of Berkshire Hathaway’s BRK BRK/B))) most important subsidiaries, Berkshire Hathaway Energy, now valued at close to $90 billion, Barron’s reports.

Expansive Operations

Berkshire Hathaway Energy’s operations are vast and varied. It ranks as one of the largest electric utilities in the country, serving 5.2 million customers, and is the second-largest owner of renewable energy, primarily wind. The company also operates a large U.K. utility, a leading natural-gas pipeline, and the U.S. real estate brokerage business HomeServices of America.

Recent Acquisitions

Earlier this week, the company increased its stake in the Maryland LNG facility, Cove Point, to 75% by purchasing a 50% interest for $3.3 billion from Dominion Energy (D). Berkshire Hathaway Energy also holds Berkshire’s successful investment in Chinese electric vehicle producer BYD, which was worth over $8 billion at its peak last year.

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Steady Growth

Berkshire Hathaway Energy has grown steadily through acquisitions and internal development, earning $4.4 billion last year, up from about $122 million in 2000. Buffett has praised the company’s societal accomplishment as well as its financial performance, calling it one of Berkshire’s four “jewels.”

Future Prospects

With its robust outlook, Berkshire Hathaway Energy is expected to continue powering its parent’s profits for years to come. The company has projected capital spending of more than $9 billion in both 2023 and 2024, with about $2 billion of that earmarked for wind and solar.

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