As the debate over infrastructure funding has gained more publicity, more business leaders have been weighing in with their thoughts about where the US’ priorities should lie, including Charles Munger, vice-chairman of Berkshire Hathaway.
Munger was asked during Saturday’s question-and-answer session with 35,000 Berkshire shareholders of the diversified investment firm chaired by Warren Buffet whether the US government should put more stimulus money toward infrastructure spending.
He answered the “number one” investment the government should make in US infrastructure is a nationwide electricity grid.
Power producers have been pushing for investments in the nation’s electrical transmission infrastructure as a way to ease bottlenecks that exist between points of production and consumption on the US’ electric grid. Almost 300,000 megawatts of wind projects, enough to meet 20 percent of the US’ electricity needs, are unable to connect to the electric grid due to inadequate transmission capacity, according to a recent report co-authored by the American Wind Energy Association and the Solar Energy Industries Association.
However, modernising the US’ electric grid would not be cheap. Estimates range between $100 billion to $2 trillion, according to the NPR, and money at the federal level is scarce. The $787 billion American Recovery and Reinvestment Act signed into law in February set aside only $11 billion aside for modernising the US electric grid, according to a tabulation by the American Council on Renewable Energy.
In response to the scarcity of federal funds, some states have rolled out their own initiatives. Texas, a major source of wind production in the US, set up the Competitive Renewable Energy Zones (CREZ) program, which allocates transmission zones to developers for construction and maintenance. The state is awarding $5 billion of projects under the program. In January, a joint venture backed by Toronto-based Brookfield Asset Management won a $500 million CREZ project.
Investment in the US’ electric grid would benefit Berkshire, which owns energy producer MidAmerican Energy Holdings. MidAmerican has total generation capacity of approximately 22,000 megawatts and owns 171,000 miles of electric transmission lines, according to its website.
Suzanne Weinstock contributed reporting to this article from Omaha.