Financial Upheaval and the Energy Industry

Lynne Kiesling

One of the consequences of the current financial market upheaval is MidAmerican’s buyout of Constellation Energy. See also the discussion at WSJ’s Environmental Capital of this and other possible consequences for energy industries.

Keith Johnson at WSJ also thinks that this move shows an interest on Warren Buffet’s part in nuclear assets.

Electricité de France has bid, and rebid in the face of rejection, for Constellation, arguing that the MidAmerican bid is too low. However, Constellation is not going for it, in part because of the increased national security scrutiny that would accompany foreign ownership of nuclear power plants.

We live in interesting times …

One thought on “Financial Upheaval and the Energy Industry

  1. There are specific legal prohibitions on foreign holders of nuclear power plant operating licenses. EdF would have to divest the nukes into a separate holding structure and sell the majority of that to American citizens or “persons.”

    Buffett has long discussed building a new nuclear power plant in Idaho to supply the California market (which is hurting for power.) He recently cancelled that, maybe due to opposition from California officials who remain anti-nuke. Plus the NRC has stated that they will prioritize their limited resources to applications that come from established nuclear operators like Exelon and, well, Constellation.

    Here is another case of where extensive government regulation offers competitive advantage to the big oligarchs at the expense of the small innovator.

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