Warren Buffett speaks during the 2015 SelectUSA Investment Summit. Warren Buffet's Berkshire Hathaway Energy has proposed building 10 new natural gas power plants in Texas at a cost of $8 billion. | USA International Trade Administration, Public domain, via Wikimedia Commons
Warren Buffett speaks during the 2015 SelectUSA Investment Summit. Warren Buffet's Berkshire Hathaway Energy has proposed building 10 new natural gas power plants in Texas at a cost of $8 billion. | USA International Trade Administration, Public domain, via Wikimedia Commons
Representatives from Warren Buffett's Berkshire Hathaway Energy are currently proposing to build 10 new natural gas power plants in Texas at a cost of $8 billion.
The Texas Tribune reported that lawmakers would provide Berkshire a return on its investment by creating an additional charge on Texans’ power bills. Critics, however, question whether this deal will be good for Texans.
"Buffett obviously thinks he can make money by building new generation in Texas," Bill Peacock, policy director at The Energy Alliance, told Austin News. "Unfortunately, he doesn't want to take any risk on his investment. Instead he wants Texans to bear all of the costs for the new generation through higher electricity bills that would all but guarantee his profits."
Buffett's representatives said the extra cost would be $1.42 per month for residential customers, $9.61 for commercial customers and $58.94 for industrial customers and the money will fund the cost of building the plants. The cost of fuel once the plants were operational will also be passed to customers.
"Buffett wants to get paid for building [the] new generation--whether or not the plants are ever needed," Peacock added. "But if they are needed, he'll get paid again. Essentially Texans would pay Buffett twice for the electricity they use."
The proposal comes at a time when Texas lawmakers are looking for ways to improve the state's power grid ability to withstand extreme weather conditions such as the recent winter storms that killed more than 100 Texas residents. Peacock told Austin News that the state can build power capacity by eliminating subsidies for energy companies.
"Yes, Texas needs more electricity capacity. But the market can provide for that," Peacock said. "Rather than increase subsidies through Buffett's proposal of legislation, the path forward to reliable and affordable electricity in Texas is to eliminate all subsidies for generators and transmission companies. This way Texans will no longer have to pay twice for the electricity they use--once on the electric bill and once on their tax bill."
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