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The Stealth Utility Giant

Warren Buffett has quietly built a utility giant.

The legendary investor’s Berkshire Hathaway Energy subsidiary has a footprint across nearly half the U.S., as well as parts of Canada and the U.K.

And last year, it was the second-largest utility in the U.S. in terms of net income.

Now, Buffett is set to further expand his burgeoning utility empire by scooping up a company out of bankruptcy that owns 122,000 miles of electric transmission and distribution wires.

Transmission lines are among the most valuable infrastructure a 21st century electric utility can own. Not only can transmission earn higher returns than power generation, expanding the grid will be crucial to accommodate the rise of renewables.

But Buffett has been burned by the company’s owner before. In fact, his ill-fated bet on $2 billion worth of bonds led to Berkshire eventually booking a loss of $873 million on the investment—one of Buffett’s biggest blunders of all time.

This time around, the assets involved are far less risky, but state regulators are notoriously prickly. They’ve previously rejected two other takeover offers. Meanwhile, other suitors are circling.

In Sunday’s Income Without Borders, we’ll look at Buffett’s odds of success with this deal.

We’ll also consider what’s next for NextEra Energy Inc. (NYSE: NEE), the utility giant that fell short in its own bid for Oncor.

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