Warren Buffet is one of the world’s richest men. In 2007, he allied himself with a man who was relatively unknown outside of political circles. That man was Barack Obama and with the help of Buffet, became President. What sort of favors would be owed to that man by the Democrats?
Warren Buffet and NV Energy
Last year, Warren Buffet made a small purchase in Nevada. Here is the story of that purchase from the Nevada Policy Research Institute deputy director Geoffrey Lawrence.
Warren Buffet and NV Energy
Last year, Warren Buffet made a small purchase in Nevada. Here is the story of that purchase from the Nevada Policy Research Institute deputy director Geoffrey Lawrence.
For many, it was exciting to hear that an investor of Warren Buffett’s stature would put billions into Nevada in order to acquire the state’s electric utility company.
The real story behind Buffett’s acquisition of NV Energy, however, centered on Senate Bill 123, a bill moving through the Nevada Legislature on its way to passage. That bill will substantially raise power rates while also resulting in untold millions in additional profits for the utility’s shareholders.
At the time the sale was announced, Senate Bill 123, dubbed NVision, had moved out of the state Senate, and the Assembly commerce committee was debating it. Sen. Kelvin Atkinson had sponsored the bill at the request of representatives of NV Energy and U.S. Sen. Harry Reid — who personally appeared in Carson City to push the measure.
NV Energy wanted the Legislature to order it to close its coal-fired power plants ahead of schedule and to replace the lost capacity with new natural-gas-fired power plants. But the utility also wanted to continue charging ratepayers for the shuttered coal plants until it received all of the remaining undepreciated balance on these plants, plus decommissioning costs, a guaranteed profit share and compensation for the stockpiles of coal the utility had purchased but no longer wished to use.
At the same time, ratepayers would be charged for the construction of the new, replacement power plants.
On net, there would be no increase in generating capacity. Rates, however, would increase. The plan made perfect sense for NV Energy shareholders, since their profits are determined as a set percentage of the utility’s costs. Hence, shareholders can realize greater earnings by operating less efficiently — particularly by building and switching to new power plants before they’re needed.
Colorado’s electric utility was able to shepherd a similar proposal through that state’s legislature in 2010. At the time, the utility estimated that the plan would cause electric rates to rise only 2 percent faster by 2020. However, economists now expect the mandate — which required Colorado’s utility to close 900 MW of coal-fired generation and replace it primarily with new natural gas — will cause electric rates there to rise at least 11 percent and as much as 50 percent.
http://misguidedchildren.com/economy/2014/04/warren-buffet-and-his-role-in-nevada/18757
