No. of Recommendations: 11
When Berkshire Hathaway agreed to buy a small Midwestern utility company in 1999, CEO Warren Buffett said it 'was right in our sweet spot' and offered 'good growth potential.'
Buffett was right on both counts as the business, MidAmerican Energy, became the nucleus for what is now one of his company's most important subsidiaries, Berkshire Hathaway Energy, and one of Buffett's biggest scores in his 58 years at Berkshire's helm. Berkshire Hathaway Energy was most recently valued at close to $90 billion, up from the $2 billion that Berkshire Hathaway (ticker: BRK/A, BRK/B) paid for MidAmerican.
Berkshire Hathaway Energy has vast and varied operations. It's one of the largest electric utilities in the country with 5.2 million customers and is the No. two owner of renewable energy'mostly wind'behind industry leader NextEra Energy (NEE). The company is also a leading natural-gas pipeline operator, the owner of a large U.K. utility, the operator of the U.S. real estate brokerage business HomeServices of America, and the 75% owner of one of only seven liquefied natural gas facilities, or LNG, in the country with export capabilities.
The company has grown steadily through acquisitions and internally. Berkshire Hathaway Energy earned $4.4 billion last year, up from about $122 million in 2000, an 18% compound annual growth rate.
If it were publicly traded, Berkshire Hathaway Energy would be the second largest utility in the country ranked by market value'ahead of No. two Southern Co (SO) and No. three Duke Energy (DUK) but behind NextEra Energy.
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