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2015
BERKSHIRE HATHAWAY ENERGY
With our roots in renewable energy, Berkshire Hathaway Energy is an
$80 billion portfolio of locally managed businesses that share a vision for
the energy future. These businesses deliver affordable, safe and reliable service
each day to more than 11.5 million electric and gas customers and end-users
around the world and consistently rank high among energy companies in
customer satisfaction. Berkshire Hathaway Energy is headquartered in
Des Moines, Iowa, U.S.A.
CONTENTS
1
WHAT WE STAND FOR
3
A LETTER TO OUR CUSTOMERS, COMMUNITIES AND EMPLOYEES
5
OUR BUSINESSES
7
OUR CORE PRINCIPLES
13
OUR LEADERSHIP TEAM
Learn more at www.berkshirehathawayenergyco.com
WHAT WE STAND FOR
CUSTOMER SERVICE
We are focused on delivering
reliability, dependability, fair
prices and exceptional service
to our customers around the
world.
1
EMPLOYEE COMMITMENT
We equip employees with the
resources and support they
need to be successful. We
encourage teamwork and
provide a safe, rewarding work
environment. We make no
compromise when it comes to
safety.
ENVIRONMENTAL RESPECT
Natural resources are essential
for the production of energy.
We are committed to using
these resources wisely and
protecting our environment for
the benefit of future
generations.
REGULATORY INTEGRITY
We adhere to a policy of strict
regulatory compliance and
pursue frequent, open
communication with regulators
regarding our business
performance.
OPERATIONAL EXCELLENCE
Together with our employees,
we pride ourselves on
excellence in every aspect of
our work. Our high standards
for operations and system
maintenance enable us to
meet and exceed our
customers’ expectations,
perform our work safely, and
preserve our assets.
FINANCIAL STRENGTH
We are excellent stewards of
our substantial financial
resources. Backed by Berkshire
Hathaway, we invest in hard
assets and focus on long-term
opportunities that will
contribute to the future
strength of the company.
2
OUR VISION REMAINS UNCHANGED:
TO BE THE BEST ENERGY COMPANY IN SERVING
OUR CUSTOMERS, WHILE DELIVERING
“Berkshire Hathaway Energy reinvests all of its earnings back into its
businesses. Last year we retained more dollars of earnings – by far –
than any other American electric utility. We and our regulators see this
as an important advantage that benefits both us and our customers.”
SUSTAINABLE ENERGY SOLUTIONS
TO OUR CUSTOMERS, COMMUNITIES AND EMPLOYEES:
Berkshire Hathaway Energy had a successful 2014. As we look at our performance
against our six core principles, we had some remarkable accomplishments.
WARREN E. BUFFETT
WALTER SCOTT, JR.
GREGORY E. ABEL
3
OUR VISION TO BE THE BEST ENERGY COMPANY IN SERVING OUR
CUSTOMERS WILL CONTINUE IN 2015. Significant progress on customer
satisfaction was achieved in 2014. Our pipeline and utility businesses held their
strong industry-leading rankings – and while Berkshire Hathaway Energy moved from
No. 1 to No. 2 in the TQS survey, no surveyed customer expressed dissatisfaction
with their service from our utilities. Based upon the input we received from our
customers in 2014, we are building plans to deliver service in 2015 worthy of a
No. 1 ranking.
OUR WORK ENVIRONMENT IS SAFER THAN IT WAS ONE YEAR AGO.
Our collective incident rate in 2014 was the best it has ever been. NV Energy nearly
halved its incident rate relative to 2013, and CalEnergy Philippines hit a significant
milestone, registering 2 million work-hours – over 12.5 years – without a recordable
incident. Northern Powergrid continued to deliver industry-leading safety results in
the U.K. We continued to improve our safety performance across Berkshire Hathaway
Energy; however, incidents still occur, reminding us that we can never lose focus
when it comes to safety. We will work to create an even safer work environment
in 2015.
WE CONTINUE TO CONDUCT OUR BUSINESS IN AN ENVIRONMENTALLY
RESPONSIBLE WAY. We strive to be great stewards of the environment, and we
make investments to reduce our impacts. NV Energy received approval to acquire
replacement generation that will reduce its carbon emissions. Our businesses
submitted constructive responses to the Environmental Protection Agency’s proposed
clean power rules associated with reducing carbon. As BHE Renewables continued
to grow its business, it put over 600 megawatts into service without a single
significant environmental issue at its construction projects. We will further pursue
new renewable projects in the future.
Warren E. Buffett and Walter Scott, Jr.
WE MADE GREAT PROGRESS WITH
OUR KEY REGULATORY RELATIONSHIPS,
REDUCING THE IMPACTS ON OUR
CUSTOMERS’ RATES. NV Energy will not
increase electric base rates for southern Nevada
customers for the next three years. Electric rate
cases were not filed in California, Idaho or
Oregon because PacifiCorp managed its total
costs effectively. MidAmerican Energy’s Iowa
electric rate case was approved, reducing the
need for rate cases in the future. Northern
Powergrid has been a leading performer on a
cost and efficiency basis in the current regulatory
period and made a proposal to reduce
customers’ rates while further reducing costs and
improving outputs. Our businesses will continue
to work hard to deliver innovative solutions to our
stakeholders.
BEING AN EFFICIENT AND EFFECTIVE
OPERATOR HELPS US DELIVER EXCEPTIONAL
SERVICE TO OUR CUSTOMERS. In spite of
challenging weather conditions, the gas pipelines
and electric transmission and distribution systems
operated well. Our natural gas pipelines
provided uninterrupted service during a polar
vortex event. PacifiCorp helped develop and then
successfully entered the energy imbalance
market, which will more effectively match
resources to customers’ needs in the Western U.S.
HomeServices’ brokerage operations managed
through lower-than-expected sales volumes, the
Berkshire Hathaway HomeServices franchise
brand continued its successful rollout, and a new
stand-alone mortgage business was launched to
serve the HomeServices customers. During
2015, we will place an even greater focus on
human performance improvements to better
serve our customers.
WE CONTINUE TO MAKE SMART
INVESTMENTS
THAT
STRENGTHEN
OUR ASSETS AND DELIVER REASONABLE
RETURNS. By delivering on our other core
principles, we had the financial strength in 2014
to reinvest back into our existing businesses,
including over 1,300 megawatts of new
generation investments to meet our customers’
needs. We welcomed AltaLink, with its
outstanding employees, impressive assets, and
a remarkably similar culture to our family of
businesses. Transmission infrastructure is needed
throughout North America, and we look forward
to investing in more transmission projects in the
future.
Our
employees
delivered
outstanding
performance in 2014, and have a solid
foundation for success in 2015 and beyond.
Our vision remains the same, and our core
principles do not change; we want to be the best
energy company as we accept personal
responsibility in serving our customers.
Gregory E. Abel
Chairman, President and CEO
4
OUR BUSINESSES
INFRASTRUCTURE
BUSINESS
Electricity
BUSINESS
Electricity, natural gas
BUSINESS
Electricity, natural gas
BUSINESS
Electricity distribution
LOCATIONS
California, Idaho, Oregon,
Utah, Washington, Wyoming
LOCATIONS
Iowa, Illinois,
Nebraska, South
Dakota
LOCATION
Nevada
LOCATION
Northeast England
CUSTOMERS
1.4 million
END-USERS
3.9 million
EMPLOYEES
2,400
EMPLOYEES
2,500
BUSINESS
Solar, wind, geothermal,
hydro and natural gas
CUSTOMERS
1.8 million
EMPLOYEES
5,900
CUSTOMERS
1.4 million
EMPLOYEES
3,600
BUSINESS
Natural gas transmission
BUSINESS
Electric transmission
BUSINESS
Electric transmission
LOCATIONS
from Texas to Michigan
from Wyoming to California
LOCATION
Alberta, Canada
LOCATIONS
Arizona, California,
Kansas, Texas
EMPLOYEES
1,000
SIZE
16,400 pipeline miles;
7.8 billion cubic
feet/day design capacity
END-USERS
3 million
EMPLOYEES
20
EMPLOYEES
800
SIZE
1,020 line miles
SIZE
7,800 line miles
LOCATIONS
Arizona, California, Illinois,
New York, Texas, Hawaii,
Philippines
EMPLOYEES
400
BERKSHIRE HATHAWAY ENERGY
2014 DATA
BUSINESS
Residential brokerage,
franchising, mortgage
ASSETS $80 billion
LOCATIONS
25 states
TRANSMISSION LINES 32,600 miles
EMPLOYEES
4,100
CUSTOMERS AND END-USERS 11.5 million electric and natural gas worldwide
NATURAL GAS PIPELINE 16,400 miles
EMPLOYEES 21,000 worldwide
GENERATION CAPACITY OWNED AND CONTRACTED More than 35,000 megawatts
GENERATION CAPACITY OWNED AND CONTRACTED FROM RENEWABLES/NONCARBON 28 percent
5
6
When it comes to customer satisfaction, we strive to be the best in
the industry; 2014 was another year of solid performance:
n
n
Each of our U.S. electric utilities ranked in the top 10 percent
nationally in TQS Research Associates’ Key Accounts Benchmark
Study. Combined results for Berkshire Hathaway Energy ranked in
the top three among domestic holding companies in the TQS
customer satisfaction study for the 11th consecutive year.
MidAmerican Energy Company ranked first in J.D. Power and
Associates’ residential electric customer survey among large
Midwestern companies for the seventh consecutive year.
MidAmerican Energy Company also earned the highest engaged
OUR BUSINESSES SHARE A VIEW THAT THE KEY TO A
STABLE AND PROSPEROUS ENERGY FUTURE IS TO
MAINTAIN A CULTURE OF PERSONAL
RESPONSIBILITY TO CUSTOMERS. Every decision we
make begins with the needs of our customers. We think
ahead to decide what must be done to provide
excellent service a decade or more into the future, ever
mindful of the need to keep our products reliable and
fairly priced, and deliver them safely. To maintain a
clear view of what the customers of each business need,
we prefer that management, employees, operations and
decisions remain at the local level.
n
customer relationship score among combination utilities in Cogent
Reports’ first-ever national study of brand trust and customer
engagement, achieving the title of Customer Champion.
Combined results for our gas pipeline companies were first in
Mastio & Company’s annual customer satisfaction survey for
major organizations for the ninth consecutive year. Kern River Gas
Transmission Company and Northern Natural Gas ranked first
and second, respectively, among interstate natural gas pipelines.
EMPOWERING CUSTOMERS
We are committed to offering a variety of choices and programs that
help our customers manage their own energy use. For example, NV
Energy’s new digital meters are being coupled with a number of tools
that are changing how customers engage with the company to
manage energy use. In addition to helping customers use energy
more efficiently, this smart meter/smart grid technology allows twoway communication, which helps identify and respond to power
outages.
7
EMPLOYEE COMMITMENT
We equip employees with the tools, training, development
opportunities and work environment they need to be successful, and
we value the productive working relationships with our employees
who are represented by unions. Our employees embrace our core
principles to work safely and deliver exceptional customer service.
Together with our employees, we invest through charitable donations
of money and time to help the communities we serve. In 2014, the
businesses of Berkshire Hathaway Energy contributed more than
$13 million to organizations that support the communities we serve,
particularly those entities supported by our employees through their
time and donations.
INDUSTRY LEADERSHIP
As with customer service, Berkshire Hathaway Energy aspires to be
the industry leader in employee safety. When employees feel safe,
they do their best and most productive work. We want every
EMPLOYEE COMMITMENT
CUSTOMER SERVICE
EXCEEDING CUSTOMERS’ EXPECTATIONS
Each of our businesses has a customer service improvement plan
with metrics to measure progress. These plans are dynamic and are
driven by feedback gained from customer surveys and our
continuous improvement philosophy.
EVERY ONE OF OUR EMPLOYEES PLAYS A
ROLE IN SERVING THE CUSTOMER, WHETHER
DIRECTLY OR INDIRECTLY. ACCORDINGLY,
MAXIMIZING EMPLOYEE ENGAGEMENT IS
CRITICAL TO OUR SUCCESS. The key
ingredients of employee engagement are
well-known: clear goals, adequate resources,
supportive leaders and a rewarding work
environment. But above all, we know employees
value safety in the workplace.
employee to complete their work and return home each day without
accident or injury. Our goal is to continuously improve the safety of
our work environment for our employees, our customers and the
general public. We communicate frequently with our employees
about safety incidents and near misses so we can apply the lessons
we learned.
FIVE CONSECUTIVE YEARS OF IMPROVEMENT
Berkshire Hathaway Energy’s overall safety incident rate improved
15 percent in 2014, our fifth consecutive year of improvement. In
both 2013 and 2014, our incident rate ranked in the best 10 percent
for utilities nationwide.
Both NV Energy and Northern Powergrid delivered their best-ever
performance on several safety metrics in 2014. Northern Powergrid
and CalEnergy Philippines have held their annual recordable incident
rate at or below 1.0 for 12 and 20 consecutive years, respectively,
a remarkable achievement.
8
MidAmerican Energy Company and PacifiCorp own the largest and
second-largest portfolios, respectively, of wind-powered generating
capacity in the U.S. among rate-regulated utilities.
With nearly 1,300 megawatts of solar energy capacity under
construction and in operation, BHE Renewables owns two of the largest
solar projects in the world, the Topaz and Solar Star projects in
California.
“MIDAMERICAN ENERGY’S COMMITMENT TO
WIND GENERATION GARNERS LONG-LASTING
BENEFITS AND MAKES IOWA A COMPETITIVE
ECONOMIC FORCE NOT ONLY IN THE UNITED
STATES BUT ALSO IN THE WORLD … Iowa has
attracted major tech companies such as Google,
Microsoft and Facebook, because of our low energy
prices and commitment to renewable energy.”
REASONABLE PRICES
Our focus on cost control is reflected in our prices; our rates are
below regional averages in all three areas of the U.S. in which we
operate, and our U.K. business has delivered significant price
reductions while improving service performance.
When requesting a rate change is a necessity, we work hard to reach
agreements on reasonable terms with all stakeholders. For example, in
Nevada, we agreed to not increase our general revenue requirement –
the smallest impact in over a decade for a southern Nevada general rate
filing. The agreement provides predictable base rates for southern
Nevada customers for the next three years.
CANDOR AND RESPECT
Consistent with our operating philosophy, we approached the
acquisition of AltaLink with candor and respect for regulators and
many other stakeholders and received approvals in six months.
REGULATORY INTEGRITY
ENVIRONMENTAL RESPECT
A DIVERSIFIED GENERATION PORTFOLIO
Berkshire Hathaway Energy:
Reduced coal from 51 percent to approximately 35 percent of its
n
combined fuel mix over the last 14 years.
Added clean natural gas to our fleet in 2013 and 2014.
n
Invested nearly $17 billion to date in renewable energy generation.
n
Today, over 28 percent of our owned and contracted generation
capacity comes from renewable and noncarbon sources such as
wind, water, solar and geothermal heat.
FOR RATE-REGULATED UTILITIES, ACHIEVING
SATISFACTORY REGULATORY OUTCOMES WILL
ALWAYS BE CRITICAL FOR LONG-TERM BUSINESS
SUCCESS. We believe in working with external
stakeholders to find solutions, and we always strive to be
completely transparent when dealing with regulators and
stakeholders. If properly executed, these approaches can
achieve balanced regulatory outcomes for all participants.
Iowa Governor Terry E. Branstad
TAKING ACTION
Berkshire Hathaway Energy continues to take action to protect the
environment by doing the following:
Eliminating 76 percent of our coal-fueled capacity in Nevada by
n
year-end 2019.
Offering programs that empower our customers to conserve and
n
manage their energy use, including energy efficiency incentives,
energy assessments and smart metering.
Working to avoid methane and sulfur hexafluoride releases from our
n
gas and electricity transmission and distribution operations.
9
LOOKING TO THE FUTURE
Our efforts to reduce power plant emissions will continue; we will work
with policymakers as they create responsible environmental laws and
regulations. As we plan changes to our generation mix in response to
regulatory requirements, we must strike a balance between
environmental concerns and keeping electricity rates affordable for
customers.
AltaLink is recognized for having one of Canada’s 10 Most Admired
Corporate Cultures in 2014 and is a great fit for Berkshire Hathaway
Energy.
SUSTAINABLE ENERGY FOR ALL
With sustainable operations in both regulated and non-regulated
markets, we are in a unique position to provide our customers with
distributed generation choices. Renewable energy offers many
advantages to our customers, but there are some challenges when
considering distributed generation.
Energy usage differs among customers
n
The grid was built to support central power generation
n
Low electric rates across our utilities impact the economics
n
Adapting to these challenges offers new opportunities to serve
customers and will require new investments, as well as rates designed
to be fair for all customers – including those residential customers who
choose not to adopt rooftop solar or other distributed generation
technologies.
10
RELIABLE GAS SUPPLY
Customers rely on our pipelines to keep the gas flowing, especially
during harsh winter weather. In 2014, Northern Natural Gas and Kern
River Gas Transmission Company met the challenge during bitter cold
temperatures and all-time record demand; the two pipelines maintained
uninterrupted service to their customers and came to the aid of other
suppliers.
WE PROUDLY PROVIDE AN ESSENTIAL SERVICE TO
SOCIETY. ENERGY POWERS OUR COMMUNITIES;
ENABLES TRANSPORTATION, EDUCATION AND
INFORMATION TECHNOLOGIES; AND KEEPS US
CONNECTED, COMFORTABLE, HEALTHY AND
SAFE. We will always seek to maximize the reliability,
productivity and safety of our assets. Doing so helps
keep our rates reasonable and reduces risk for
customers and employees.
11
HIGH QUALITY, DIVERSIFIED PORTFOLIO
We own high-quality assets. Investment-grade, rate-regulated
businesses provide about 90 percent of our operating income.
Our portfolio is well-diversified geographically. We operate regulated
businesses in 11 states, England and Canada. In 2014, we acquired
AltaLink, a regulated transmission-only business that provides
electricity to 85 percent of Albertans. Our 16,400 miles of gas
pipelines reach from Texas to Michigan and from Wyoming to
California. No single state provides more than 20 percent of our
energy revenue. This broad geographic scope limits exposure to the
impacts of weather, local economies, regulation and natural
disasters. Lenders and credit rating agencies view our geographic
breadth favorably, as it improves the predictability of financial results
and reduces business risk.
FINANCIAL STRENGTH
OPERATIONAL EXCELLENCE
CONTINUOUS IMPROVEMENT PHILOSOPHY
Our leaders are responsible for instilling a continuous improvement
philosophy that drives operational excellence. A good example is our
improvement in power plant availability. Our businesses ranked in the
top 10 percent of industry peers based on 2014 natural gas generation
equivalent availability.
WE ARE STAUNCH ENERGY INFRASTRUCTURE
ADVOCATES, INVESTING IN HARD ASSETS FOR
THE LONG TERM. Our financial strength –
predictable earnings, cash retention and strong credit
ratings – gives us access to the capital needed to
make these investments and grow our business. Our
parent company, Berkshire Hathaway, has embraced
this concept and is our biggest supporter.
STRENGTHENING THE GRID
Berkshire Hathaway Energy believes the growing interest in
alternative energy sources, combined with organic growth in
demand, will require strengthening and expansion of the electric
transmission grid.
STRONG CREDIT RATINGS
All of our regulated businesses have credit ratings of A-/A3 or better,
as measured by Standard & Poor’s Investors Service and Moody’s,
respectively. When it’s necessary to raise capital, our strong credit
ratings help us do so on favorable terms.
We participate in several ways:
PacifiCorp and the California ISO established a new energy
n
imbalance market for the Western U.S. This market will enhance
system flexibility, improve reliability and help control the cost of
electric service in the Western U.S.
PacifiCorp is permitting and constructing the $6 billion Energy
n
Gateway transmission project, which will add approximately
2,000 miles of new high-voltage lines in the Western U.S.
BHE U.S. Transmission has developed approximately $1.6 billion
n
of transmission projects, both in traditional utility and stand-alone
projects.
BERKSHIRE HATHAWAY OWNERSHIP
Our private ownership structure is a major source of financial
strength and a competitive advantage. With no dividend
requirement, we are able to reinvest 100 percent of net income back
into our businesses in a cost-effective manner to better serve
customers. Berkshire Hathaway’s long-term ownership perspective
promotes stability and helps make us the buyer of choice in the eyes
of many sellers and regulators.
12
OUR LEADERSHIP TEAM
GREGORY E. ABEL
DOUGLAS L. ANDERSON
PATRICK J. GOODMAN
ANDREA L. KELLY
Chairman, President
and CEO
Executive Vice President and
General Counsel
Executive Vice President and
Chief Financial Officer
Senior Vice President,
Strategic Business
Performance
MAUREEN E. SAMMON
JONATHAN M. WEISGALL
CATHY S. WOOLLUMS
Senior Vice President and
Chief Administrative Officer
Vice President, Legislative and
Regulatory Affairs
Senior Vice President,
Environmental Services and
Chief Environmental Counsel
THOMAS J. BUDLER
13
PAUL J. CAUDILL
CINDY A. CRANE
President and CEO
Rocky Mountain Power
JOHN A. CUPPARO
President and CEO
BHE U.S. Transmission
MICHEAL G. DUNN
President
BHE Wind
President and CEO
NV Energy
WILLIAM J. FEHRMAN
MATTHEW L. FINNEGAN MARK A. HEWETT
PHILIP A. JONES
RONALD J. PELTIER
President and CEO
MidAmerican Energy
Company and
BHE Renewables
President
Kern River Gas
Transmission Company
President and CEO
BHE Pipeline Group
President and CEO
Northern Powergrid
Chairman and CEO
HomeServices of America, Inc.
R. PATRICK REITEN
JOSEPH L. SULLIVAN
SCOTT W. THON
A. RICHARD WALJE
RICHARD G. WEECH
President and CEO
Pacific Power
President
CalEnergy Philippines
President and CEO
AltaLink
President and CEO
Gateway Projects, PacifiCorp
President
BHE Renewables
International
President and CEO
PacifiCorp Energy
BERKSHIRE HATHAWAY ENERGY
666 GRAND AVE.
P.O. BOX 657
DES MOINES, IA 50306-0657, U.S.A.
WWW.BERKSHIREHATHAWAYENERGYCO.COM