CUSTOMER SERVICE
We are focused on delivering reliability, dependability, fair prices and exceptional service to our customers around the world.
EMPLOYEECOMMITMENT
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.
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.
Learn more at www.berkshirehathawayenergyco.com
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
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.
TO OUR
CUSTOMERS, COMMUNITIES
AND
EMPLOYEES:
WARREN E. BUFFETT
WALTER SCOTT, JR.
GREGORY E. ABEL
Berkshire Hathaway Energy had a successful 2014. As we look at our performance against our six core principles, we had some remarkable accomplishments.
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.
OUR VISION REMAINS UNCHANGED:
TO BE THE BEST ENERGY COM PANY IN SERVING
OUR CUSTOMERS, WHILE DELIVERING
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
“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.”
BUSINESS
Solar, wind, geothermal, hydro and natural gas LOCATIONS
Arizona, California, Illinois, New York, Texas, Hawaii, Philippines
EMPLOYEES 400
BUSINESS
Natural gas transmission LOCATIONS
from Texas to Michigan from Wyoming to California EMPLOYEES
1,000 SIZE
16,400 pipeline miles; 7.8 billion cubic
feet/day design capacity
BUSINESS Electric transmission LOCATIONS Arizona, California, Kansas, Texas EMPLOYEES 20 SIZE 1,020 line miles BUSINESS Residential brokerage, franchising, mortgage LOCATIONS 25 states EMPLOYEES 4,100 BUSINESS Electricity LOCATIONS
California, Idaho, Oregon, Utah, Washington, Wyoming CUSTOMERS
1.8 million EMPLOYEES 5,900
BUSINESS
Electricity, natural gas LOCATIONS Iowa, Illinois, Nebraska, South Dakota CUSTOMERS 1.4 million EMPLOYEES 3,600
INFRASTRUCTURE
OUR BUSINESSES
ASSETS$80 billionCUSTOMERS AND END-USERS11.5 million electric and natural gas worldwide
TRANSMISSION LINES 32,600 miles
NATURAL GAS PIPELINE 16,400 miles
EMPLOYEES 21,000 worldwide
GENERA TION CAPACITY OWNED AND CONTRACTEDMore than 32,000 megawatts
GENERATION CAPACITY OWNED AND CONTRACTED FROM RENEWABLES/NONCARBON 31 percent
BUSINESS
Electricity, natural gas LOCATION Nevada CUSTOMERS 1.4 million EMPLOYEES 2,400 BUSINESS Electricity distribution LOCATION Northeast England END-USERS 3.9 million EMPLOYEES 2,500 BUSINESS Electric transmission LOCATION Alberta, Canada END-USERS 3 million EMPLOYEES 800 SIZE 7,800 line miles
BERKSHIRE HATHAWAY ENERGY
2014 DATA
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.
When it comes to customer satisfaction, we strive to be the best in the industry; 2014 was another year of solid performance:
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.
n 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.
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.
n 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 two-way communication, which helps identify and respond to power outages.
CUST
OMER
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
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.
EMPL
O
YEE
“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.”
Iowa Governor Terry E. Branstad A DIVERSIFIED GENERATION PORTFOLIO
Berkshire Hathaway Energy:
n Reduced coal from 51 percent to approximately 35 percent of its combined fuel mix over the last 14 years.
n Added clean natural gas to our fleet in 2013 and 2014. n Invested nearly $17 billion to date in renewable energy generation.
Today, over 31 percent of our owned and contracted generation capacity comes from renewable and noncarbon sources such as wind, water, solar and geothermal heat.
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.
TAKING ACTION
Berkshire Hathaway Energy continues to take action to protect the environment by doing the following:
n Eliminating 76 percent of our coal-fueled capacity in Nevada by year-end 2019.
n Offering programs that empower our customers to conserve and manage their energy use, including energy efficiency incentives, energy assessments and smart metering.
n Working to avoid methane and sulfur hexafluoride releases from our gas and electricity transmission and distribution operations.
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.
ENVIRONMENT
AL
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. 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.
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.
n 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 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.
REGULA
TO
RY
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.
OPERA
TIONAL
EX
CELLENCE
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.
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.
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.
We participate in several ways:
n PacifiCorp and the California ISO established a new energy 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.
n PacifiCorp is permitting and constructing the $6 billion Energy Gateway transmission project, which will add approximately 2,000 miles of new high-voltage lines in the Western U.S.
n BHE U.S. Transmission has developed approximately $1.6 billion of transmission projects, both in traditional utility and stand-alone projects.
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.
FINANCIAL
STRENG
TH
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.
STRONG CREDIT RATINGS
All of our regulated busi nesses 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.
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.
OUR LEADERSHIP TEAM
R. PATRICK REITEN
President and CEO PacifiCorp Transmission
RONALD J. PELTIER
Chairman and CEO HomeServices of America, Inc.
SCOTT W. THON
President and CEO AltaLink JOSEPH L. SULLIVAN President CalEnergy Philippines RICHARD G. WEECH President BHE Renewables International PHILIP A. JONES
President and CEO Northern Powergrid
MATTHEW L. FINNEGAN
President Kern River Gas Transmission Company
DOUGLAS L. ANDERSON Chief Corporate Counsel
PATRICK J. GOODMAN Executive Vice President and Chief Financial Officer
ANDREA L. KELLY
Senior Vice President JONATHAN M. WEISGALLVice President, Legislative and Regulatory Affairs
GREGORY E. ABEL Chairman, President and CEO
A. RICHARD WALJE
President and CEO Gateway Projects, PacifiCorp
MARK A. HEWETT
President and CEO BHE Pipeline Group
STEFAN A. BIRD
President and CEO Pacific Power
WILLIAM J. FEHRMAN
President and CEO MidAmerican Energy Company and BHE Renewables THOMAS J. BUDLER President BHE Wind PAUL J. CAUDILL
President and CEO NV Energy
CINDY A. CRANE
President and CEO Rocky Mountain Power
JOHN A. CUPPARO
President and CEO BHE U.S. Transmission
CATHY S. WOOLLUMS Senior Vice President, Environmental Services and Chief Environmental Counsel
NATALIE L. HOCKEN Senior Vice President and General Counsel
BERKSHIRE HATHAWAY ENERGY
666 GRAND AVE. P.O. BOX 657
DES MOINES, IA 50306-0657, U.S.A.
