House of Paine

warren bets electric

my ex boss 

the king hell investor 
               of the dirth
wants a bigger piece 
of the  energy utility  pie 


why ?

does he have an inside view ......


  "Billionaire Warren E. Buffett
 placed his biggest wager yet
 on the utility industry Tuesday
 when his MidAmerican Energy Holdings Co.
 agreed to buy
electric-power supplier PacifiCorp 
for $5.1 billion in cash".



" The deal came as Buffett 
was looking for ways to invest 
Berkshire's $40-billion cash hoard
 as well as opportunities 
to expand his growing presence 
in the utility sector"

"We like the business generally,"
                 Buffett said in an interview...

 "By definition it can't be 
a great business 
because you're regulated
 and the return  
you're allowed is reasonable
  not mouthwatering......
  But it's predictable...."


-------------now whats predictable to him
but not to us groundlings ....---------- 

The acquisition would give
Buffet's
  MidAmerican Energy,
 based in Des Moines
a total of  about 
6.6 million customers 
               worldwide
 including 3 million 
in the United States
 and $10 billion in annual revenue" 

" Berkshire acquired control
 of MidAmerican Energy for $3.3 billion 
in two transactions in 2000 and 2002,
 and it has made some smaller
 energy-related acquisitions as well
 For instance,
 it acquired Kern River Gas Transmission Co.
 a pipeline system that brings
 natural gas to California, Utah and Nevada" 

 " PacifiCorp has ambitious plans 
to upgrade and expand its system,
 a project that will cost
 about $1 billion a year 
over the next five years"





" in other merger activity  
Two weeks ago
 Duke Energy Corp.
 agreed to buy rival power company 
Cinergy Corp. in a $9-billion stock deal"
 




--------  now enters
             the  hidden value pop ...
seems there's 
 this  bug a boo law  
    passed by
 the F-ing 
            new deal  congress
  way back in the 30's 
which " restricts "  the "industry ".....---------

 

" at a time when 
it is planning
  multibillion-dollar 
capital projects "


  -------------and so ------------

" the industry  is  putting pressure 
on Congress to repeal the law"


 --------
but  warren 
what of  

"unhealthy consolidation" 

what of
rate payer high jackings ........


"heh heh heh"        ---------------.

Buffett sez
 

" repeal of the law will  mean 
          less hoops to jump through"

------------------- and profit barriers to jump over ---------------



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