Appeal for Energy Diversification in Utah

Mr. Warren E. Buffett
BERKSHIRE HATHAWAY, INC.
1440 Kiewit Plaza
Omaha, Nebraska 68131  

RE:  Mid American Energy and Rocky Mountain Power 

Dear Mr. Buffett,  

We are a collection of citizens, business owners and managers, service professionals, public servants, and organization representatives with a common sense of home, including what makes it special and what we need to do to preserve it.  As your friends and new customers here in Utah, we would like to take a moment to share with you a concern of ours regarding the future of Rocky Mountain Power’s power generation portfolio in our region.  Through Utah’s Public Services Commission, we learned that Rocky Mountain Power seeks to expand its power generation resources through the construction of up to three large, coal-fired power plants.  We feel this is anathema to the direction we want our state to go, and indeed to the direction the country is headed. 

Our concerns come down to three basic interrelated themes – our regions’ climate, its health, and its economic vitality.  We feel strongly that additional coal fired plants in our region compromise all three which, in turn, will have negative consequences for Rocky Mountain Power’s future projected customer base and its shareholders. 

Access to cheap energy is certainly attractive, but because we already source about 95% of our energy from coal (while the national average is roughly 53%), we believe we must consider much more seriously the myriad of collateral costs when choosing the future sources of our energy.  Coal is currently the source of 60% of U.S. sulfur dioxide emissions, 33% of U.S. mercury emissions, 25% of nitrogen oxide emissions, and more than 33% of the nation's carbon dioxide air emissions.[1]  Particulate matter is also a major concern, particularly for asthma-prone children and the elderly. 

In addition to the health and environmental effects, Utah’s disproportionate dependence on coal brings disproportionate impact, illustrated in our area in what are known as inversions.  During the winter months in Salt Lake City, as the temperature drops and more pollution accumulates, these immense blankets of toxins grow consistently thicker in altitude, denser and more yellow in appearance, and more rancid in taste, completely obscuring the 11,000 foot peaks right outside our doors.  Simply breathing becomes more of a self-conscious exercise in these conditions! 

But how does this affect Rocky Mountain Power? 

We believe that the collective negative impact on our health and environment threatens our future economic vitality.  Utah’s natural beauty and environment are recognized worldwide for providing a high quality of life, resulting in national and international commerce operations deciding to build their headquarters here,  as reflected in this great accolade (as reprinted on EDCUTAH’s website):

Outside Magazine ranked Salt Lake City as the “Best Place to Live” in its August 2005 edition. It attributed this ranking to such qualities as “livability” remarking how Utah’s natural landscape “earns glowing reviews  from recreationists.” (Outside Magazine, August 2005)

It is this attribute of our home that we enjoy so much and are working hard to protect and enhance.  However, if the cumulative effects of our activities compromise our health, obscure our viewsheds, shrink and contaminate our watersheds, and thin out our most beloved snowpack, then our attractiveness as a place to live and work is also threatened, and so is our economic competitiveness as a major metro area and a state, compromising our recent gains in income and property values.   

Parallel to this is the trend we see towards more regulation over pollution, particularly greenhouse gas emissions.  While coal may appear inexpensive now, that the externalized costs, including increased health care spending (particularly for pediatric and geriatric care), remediation of emissions effects and spent fuel disposal, tighter extraction regulations increasing suppliers’ costs, increased transportation costs, new emissions controls, and the anticipated costs from climate change impacts will vastly outweigh any future savings from coal.  We believe the proposed rates presented to the Utah Public Services Commission avoid the full effect of these costs, artificially deflating the projected cost of coal-derived energy and concealing a necessary rate hike to us, your rate payers, in the future when these costs come due. 

As a way to hedge against such costs, those that will likely be borne by ratepayers, we believe that Utah’s energy portfolio should be diversified with other energy sources, specifically wind, geothermal, natural gas, solar, and biomass. It is our understanding that technological advances in these four areas are advancing at such a rapid pace, we will be referring to such energy sources in the not-so-distant future as mainstream while coal will be considered alternative.   

In conclusion, while we understand that coal is not the only source of our pollution, we must continue to reduce our fossil-based energy footprints to help reduce the negative effects of such sources.  We hope that you can appreciate what we seek to protect here in Utah and will work with us to develop a more diversified approach to provisioning power that is more fair to your customers while still defensible to your shareholders. Such is our appeal to you, our guest and friend, as you lead your newest acquisition into the future. 

Kindest regards, we are: