Units of Warren Buffett’s Berkshire Hathaway Inc., including PacifiCorp and NV Energy, were barred from selling power at market rates and must instead set prices based on the cost of running their plants.
More than a dozen Berkshire Hathaway power suppliers serving consumers in the West failed to prove they couldn’t exercise market power, according to an order from the U.S. Federal Energy Regulatory Commission late Thursday. The companies must revise rates from Jan. 9, 2015, to April 9 and provide refunds within 30 days of the order, according to the filing.
Berkshire Hathaway, formerly MidAmerican Energy Holdings Co., purchased Las Vegas-based NV Energy in May, 2013, making it one of the largest U.S. utility owners. It controls over 33,000 megawatts of generating capacity with 11.6 million customers in 2015, according to the company’s website.
"We find that continuation of their market-based rate authority" in the Western power markets areas "is not just and reasonable," according to the order. We find that the Berkshire sellers "have not adequately rebutted the presumption of horizontal market power."
The finding comes as Berkshire Hathaway courts power transmission operators in the western U.S. to join its utilities and the California grid in trading power across their borders electronically and instantaneously through a so-called Energy Imbalance Market.
"We received the order and are assessing its impact and reviewing our options, Bob Gravely, a spokesman for PacifiCorp, said by phone Friday. A spokeswoman at Berkshire Hathaway directed calls to the power suppliers named in the order.
The order covers power sales in parts of Utah, Idaho, Montana, Wyoming, California, and Oregon.