Berkshire Hathaway Energy's Competitiveness

The Pipeline Companies primarily compete based on delivered price, which encompasses natural gas commodity and transmission costs. Their competitors include midstream operators and gas marketers offering transmission, storage, and related services. Natural gas also competes with alternative energy sources such as coal, nuclear energy, wind, geothermal, solar, and fuel oil. The Pipeline Companies generate significant revenue from long-term firm contracts, providing protection from competition during the contract terms. Upon expiration, they face competitive pressures from other natural gas pipeline facilities and seek to recontract or remarket capacity at maximum tariff rates, occasionally offering discounts to remain competitive. Their pricing competitiveness is supported by access to low-cost supply basins, cost control measures, and high levels of firm entitlement sold on seasonal and annual bases, which reduce per unit transmission costs. In Illinois, state law permits customers to select their retail energy supplier; however, MidAmerican Energy is obligated to deliver energy and serve customers at regulated rates. This regulatory environment has not materially affected MidAmerican Energy's financial results. Competitors identified in filings include MidAmerican Energy and PacifiCorp.