Financial Times:

An electric utility owned by Warren Buffett’s Berkshire Hathaway is feeling the heat in America’s coal heartland.

PacifiCorp this year accelerated plans to install wind turbines, solar panels and battery storage, while retiring coal-fired generators in the U.S. west. The announcement was not received well in Wyoming, which mines 40 percent of U.S. coal.

The state’s utility regulator has already begun an investigation into PacifiCorp’s latest Integrated Resource Plan, a vision for future generation that normally receives a rubber stamp. And this week, the office of Governor Mark Gordon was preparing to hand down instructions to the regulator designed to intensify scrutiny of the plan.

While there has been a sharp decline in coal use across the U.S., “all of a sudden now it’s coming here,” said Renny MacKay, the governor’s policy director. Coal still fuels 85 per cent of the power generated inside Wyoming, compared to less than a quarter across the U.S., the Energy Information Administration estimates.

PacifiCorp is the largest holding in Berkshire Hathaway Energy, which itself is one of the most important businesses inside Mr Buffett’s famous investment company. Greg Abel, its chairman and former chief executive, is tipped as the most likely successor to Mr Buffett to run Berkshire Hathaway itself.

PacifiCorp provides power in six U.S. states that are often at odds over energy and environmental policy. Coastal Washington and Oregon will ban sales of coal-fired electricity by 2025 and 2030, respectively, as they attempt to limit contributions to climate change.

Wyoming, however, is trying to prop up demand for coal and delay the shutdown of coal-fired plants. This year it passed a law requiring companies to seek buyers for power plants before they can be retired.

Berkshire Hathaway Energy has invested almost $27bn of a $30bn commitment to renewable energy generation, “and we fully expect to exceed this commitment as we pursue additional cost-effective opportunities,” a spokeswoman said.

Global coal use would remain stable as demand grows in Asia, the International Energy Agency said in a report this week. But in the U.S. it is declining by double-digit percentages.

“The coal industry has been a big part of the Wyoming state budget and Wyoming culture for 40 years now, but the economics are no longer in coal’s favour,” said Dennis Wamsted, analyst at the Institute for Energy Economics and Financial Analysis, a research group. “This transition is going to be difficult. But if you’re in favour of letting the cheapest supply cost win, the transition is going to happen.”

[Gregory Meyer]

More: Warren Buffett’s power company takes flak for coal plant closures