UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2022

or

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ______ to _______

	Exact name of registrant as specified in its charter
	State or other jurisdiction of incorporation or organization
Commission	Address of principal executive offices	IRS Employer
File Number	Registrant's telephone number, including area code	Identification No.
001-14881	BERKSHIRE HATHAWAY ENERGY COMPANY	94-2213782
	(An Iowa Corporation)
	666 Grand Avenue
	Des Moines, Iowa 50309-2580
	515-242-4300
001-05152	PACIFICORP	93-0246090
	(An Oregon Corporation)
	825 N.E. Multnomah Street, Suite 1900
	Portland, Oregon 97232
	888-221-7070
333-90553	MIDAMERICAN FUNDING, LLC	47-0819200
	(An Iowa Limited Liability Company)
	666 Grand Avenue
	Des Moines, Iowa 50309-2580
	515-242-4300
333-15387	MIDAMERICAN ENERGY COMPANY	42-1425214
	(An Iowa Corporation)
	666 Grand Avenue
	Des Moines, Iowa 50309-2580
	515-242-4300
000-52378	NEVADA POWER COMPANY	88-0420104
	(A Nevada Corporation)
	6226 West Sahara Avenue
	Las Vegas, Nevada 89146
	702-402-5000
000-00508	SIERRA PACIFIC POWER COMPANY	88-0044418
	(A Nevada Corporation)
	6100 Neil Road
	Reno, Nevada 89511
	775-834-4011
001-37591	EASTERN ENERGY GAS HOLDINGS, LLC	46-3639580
	(A Virginia Limited Liability Company)
	6603 West Broad Street
	Richmond, Virginia 23230
	804-613-5100
	N/A
	(Former name or former address, if changed from last report)

Registrant	Securities registered pursuant to Section 12(b) of the Act:
BERKSHIRE HATHAWAY ENERGY COMPANY	None
PACIFICORP	None
MIDAMERICAN FUNDING, LLC	None
MIDAMERICAN ENERGY COMPANY	None
NEVADA POWER COMPANY	None
SIERRA PACIFIC POWER COMPANY	None
EASTERN ENERGY GAS HOLDINGS, LLC	None

Registrant	Name of exchange on which registered:
BERKSHIRE HATHAWAY ENERGY COMPANY	None
PACIFICORP	None
MIDAMERICAN FUNDING, LLC	None
MIDAMERICAN ENERGY COMPANY	None
NEVADA POWER COMPANY	None
SIERRA PACIFIC POWER COMPANY	None
EASTERN ENERGY GAS HOLDINGS, LLC	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Registrant	Yes	No
BERKSHIRE HATHAWAY ENERGY COMPANY	☒
PACIFICORP	☒
MIDAMERICAN FUNDING, LLC		☒
MIDAMERICAN ENERGY COMPANY	☒
NEVADA POWER COMPANY	☒
SIERRA PACIFIC POWER COMPANY	☒
EASTERN ENERGY GAS HOLDINGS, LLC	☒

Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit such files). Yes  x  No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Registrant	Large accelerated filer	Accelerated filer	Non-accelerated filer	Smaller reporting company	Emerging growth company
BERKSHIRE HATHAWAY ENERGY COMPANY	☐	☐	☒	☐	☐
PACIFICORP	☐	☐	☒	☐	☐
MIDAMERICAN FUNDING, LLC	☐	☐	☒	☐	☐
MIDAMERICAN ENERGY COMPANY	☐	☐	☒	☐	☐
NEVADA POWER COMPANY	☐	☐	☒	☐	☐
SIERRA PACIFIC POWER COMPANY	☐	☐	☒	☐	☐
EASTERN ENERGY GAS HOLDINGS, LLC	☐	☐	☒	☐	☐

If an emerging growth company, indicate by check mark if the registrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o

Indicate by check mark whether the registrants are a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ☐  No  x

All shares of outstanding common stock of Berkshire Hathaway Energy Company are privately held by a limited group of investors. As of April 28, 2022, 76,368,874 shares of common stock, no par value, were outstanding.

All shares of outstanding common stock of PacifiCorp are indirectly owned by Berkshire Hathaway Energy Company. As of April 28, 2022, 357,060,915 shares of common stock, no par value, were outstanding.

All of the member's equity of MidAmerican Funding, LLC is held by its parent company, Berkshire Hathaway Energy Company, as of April 28, 2022.

All shares of outstanding common stock of MidAmerican Energy Company are owned by its parent company, MHC Inc., which is a direct, wholly owned subsidiary of MidAmerican Funding, LLC. As of April 28, 2022, 70,980,203 shares of common stock, no par value, were outstanding.

All shares of outstanding common stock of Nevada Power Company are owned by its parent company, NV Energy, Inc., which is an indirect, wholly owned subsidiary of Berkshire Hathaway Energy Company. As of April 28, 2022, 1,000 shares of common stock, $1.00 stated value, were outstanding.

All shares of outstanding common stock of Sierra Pacific Power Company are owned by its parent company, NV Energy, Inc. As of April 28, 2022, 1,000 shares of common stock, $3.75 par value, were outstanding.

All of the member's equity of Eastern Energy Gas Holdings, LLC is held indirectly by its parent company, Berkshire Hathaway Energy Company, as of April 28, 2022.

This combined Form 10-Q is separately filed by Berkshire Hathaway Energy Company, PacifiCorp, MidAmerican Funding, LLC, MidAmerican Energy Company, Nevada Power Company, Sierra Pacific Power Company and Eastern Energy Gas Holdings, LLC. Information contained herein relating to any individual company is filed by such company on its own behalf. Each company makes no representation as to information relating to the other companies.

TABLE OF CONTENTS

PART I

Item 1.	Financial Statements	1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	159
Item 4.	Controls and Procedures	159

PART II

Item 1.	Legal Proceedings	160
Item 1A.	Risk Factors	161
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	161
Item 3.	Defaults Upon Senior Securities	161
Item 4.	Mine Safety Disclosures	161
Item 5.	Other Information	161
Item 6.	Exhibits	161
Signatures		164

i

Definition of Abbreviations and Industry Terms

When used in Forward-Looking Statements, Part I - Items 2 through 3, and Part II - Items 1 through 6, the following terms have the definitions indicated.

Berkshire Hathaway Energy Company and Related Entities
BHE	Berkshire Hathaway Energy Company
Berkshire Hathaway	Berkshire Hathaway Inc.
Berkshire Hathaway Energy or the Company	Berkshire Hathaway Energy Company and its subsidiaries
PacifiCorp	PacifiCorp and its subsidiaries
MidAmerican Funding	MidAmerican Funding, LLC and its subsidiaries
MidAmerican Energy	MidAmerican Energy Company
NV Energy	NV Energy, Inc. and its subsidiaries
Nevada Power	Nevada Power Company and its subsidiaries
Sierra Pacific	Sierra Pacific Power Company and its subsidiaries
Nevada Utilities	Nevada Power Company and its subsidiaries and Sierra Pacific Power Company and its subsidiaries
Eastern Energy Gas	Eastern Energy Gas Holdings, LLC and its subsidiaries
Registrants	Berkshire Hathaway Energy Company, PacifiCorp and its subsidiaries, MidAmerican Funding, LLC and its subsidiaries, MidAmerican Energy Company, Nevada Power Company and its subsidiaries, Sierra Pacific Power Company and its subsidiaries and Eastern Energy Gas Holdings, LLC and its subsidiaries
Northern Powergrid	Northern Powergrid Holdings Company and its subsidiaries
BHE Pipeline Group	BHE GT&S, LLC, Northern Natural Gas Company and Kern River Gas Transmission Company
BHE GT&S	BHE GT&S, LLC and its subsidiaries
Northern Natural Gas	Northern Natural Gas Company
Kern River	Kern River Gas Transmission Company
BHE Transmission	BHE Canada Holdings Corporation and BHE U.S. Transmission, LLC
BHE Canada	BHE Canada Holdings Corporation and its subsidiaries
AltaLink	AltaLink, L.P.
BHE U.S. Transmission	BHE U.S. Transmission, LLC and its subsidiaries
BHE Renewables	BHE Renewables, LLC and its subsidiaries
HomeServices	HomeServices of America, Inc. and its subsidiaries
Utilities	PacifiCorp and its subsidiaries, MidAmerican Energy Company, Nevada Power Company and its subsidiaries and Sierra Pacific Power Company and its subsidiaries
EGTS	Eastern Gas Transmission and Storage, Inc.

ii

Certain Industry Terms
2017 Tax Reform	The Tax Cuts and Jobs Act enacted on December 22, 2017, effective January 1, 2018
AFUDC	Allowance for Funds Used During Construction
AUC	Alberta Utilities Commission
BART	Best Available Retrofit Technology
COVID-19	Coronavirus Disease 2019
CSAPR	Cross-State Air Pollution Rule
D.C. Circuit	United States Court of Appeals for the District of Columbia Circuit
Dth	Decatherm
EPA	United States Environmental Protection Agency
FERC	Federal Energy Regulatory Commission
FIP	Federal Implementation Plan
GAAP	Accounting principles generally accepted in the United States of America
GHG	Greenhouse Gases
GTA	General Tariff Application
GWh	Gigawatt Hour
IRP	Integrated Resource Plan
IUB	Iowa Utilities Board
kV	Kilovolt
MW	Megawatt
MWh	Megawatt Hour
NAAQS	National Ambient Air Quality Standards
NOx	Nitrogen Oxides
OPUC	Oregon Public Utility Commission
PTC	Production Tax Credit
PUCN	Public Utilities Commission of Nevada
RFP	Request for Proposals
RPS	Renewable Portfolio Standards
SCR	Selective Catalytic Reduction
SEC	United States Securities and Exchange Commission
SIP	State Implementation Plan
SO2	Sulfur Dioxide
UPSC	Utah Public Service Commission
WUTC	Washington Utilities and Transportation Commission

iii

Forward-Looking Statements

This report contains statements that do not directly or exclusively relate to historical facts. These statements are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can typically be identified by the use of forward-looking words, such as "will," "may," "could," "project," "believe," "anticipate," "expect," "estimate," "continue," "intend," "potential," "plan," "forecast" and similar terms. These statements are based upon the relevant Registrant's current intentions, assumptions, expectations and beliefs and are subject to risks, uncertainties and other important factors. Many of these factors are outside the control of each Registrant and could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include, among others:

•general economic, political and business conditions, as well as changes in, and compliance with, laws and regulations, including income tax reform, initiatives regarding deregulation and restructuring of the utility industry, and reliability and safety standards, affecting the respective Registrant's operations or related industries;

•changes in, and compliance with, environmental laws, regulations, decisions and policies that could, among other items, increase operating and capital costs, reduce facility output, accelerate facility retirements or delay facility construction or acquisition;

•the outcome of regulatory rate reviews and other proceedings conducted by regulatory agencies or other governmental and legal bodies and the respective Registrant's ability to recover costs through rates in a timely manner;

•changes in economic, industry, competition or weather conditions, as well as demographic trends, new technologies and various conservation, energy efficiency and private generation measures and programs, that could affect customer growth and usage, electricity and natural gas supply or the respective Registrant's ability to obtain long-term contracts with customers and suppliers;

•performance, availability and ongoing operation of the respective Registrant's facilities, including facilities not operated by the Registrants, due to the impacts of market conditions, outages and associated repairs, transmission constraints, weather, including wind, solar and hydroelectric conditions, and operating conditions;

•the effects of catastrophic and other unforeseen events, which may be caused by factors beyond the control of each respective Registrant or by a breakdown or failure of the Registrants' operating assets, including severe storms, floods, fires, extreme temperature events, wind events, earthquakes, explosions, landslides, an electromagnetic pulse, mining incidents, litigation, wars (including, for example, Russia's invasion of Ukraine in February 2022), terrorism, pandemics, embargoes, and cyber security attacks, data security breaches, disruptions, or other malicious acts;

•the risks and uncertainties associated with wildfires that have occurred, are occurring or may occur in the respective Registrant's service territory, including the wildfires that began in September 2020 in Oregon and California, and any other wildfires for which the cause has yet to be determined; the damage caused by such wildfires; the extent of the respective Registrant's liability in connection with such wildfires (including the risk that the respective Registrant may be found liable for damages regardless of fault); investigations into such wildfires; the outcome of any legal proceedings initiated against the respective Registrant; the risk that the respective Registrant is not able to recover costs from insurance or through rates; and the effect on the respective Registrant's reputation of such wildfires, investigations and proceedings;

•the respective Registrant's ability to reduce wildfire threats and improve safety, including the ability to comply with the targets and metrics set forth in its wildfire mitigation plans; to retain or contract for the workforce necessary to execute its wildfire mitigation plans; the effectiveness of its system hardening; ability to achieve vegetation management targets; and the cost of these programs and the timing and outcome of any proceeding to recover such costs through rates;

•the ability to economically obtain insurance coverage, or any insurance coverage at all, sufficient to cover losses arising from catastrophic events, such as wildfires where the Registrants may be found liable for real and personal property damages regardless of fault;

•a high degree of variance between actual and forecasted load or generation that could impact a Registrant's hedging strategy and the cost of balancing its generation resources with its retail load obligations;

•changes in prices, availability and demand for wholesale electricity, coal, natural gas, other fuel sources and fuel transportation that could have a significant impact on generating capacity and energy costs;

•the financial condition, creditworthiness and operational stability of the respective Registrant's significant customers and suppliers;

iv

•changes in business strategy or development plans;

•availability, terms and deployment of capital, including reductions in demand for investment-grade commercial paper, debt securities and other sources of debt financing and volatility in interest rates;

•changes in the respective Registrant's credit ratings;

•risks relating to nuclear generation, including unique operational, closure and decommissioning risks;

•hydroelectric conditions and the cost, feasibility and eventual outcome of hydroelectric relicensing proceedings;

•the impact of certain contracts used to mitigate or manage volume, price and interest rate risk, including increased collateral requirements, and changes in commodity prices, interest rates and other conditions that affect the fair value of certain contracts;

•the impact of inflation on costs and the ability of the respective Registrants to recover such costs in regulated rates;

•fluctuations in foreign currency exchange rates, primarily the British pound and the Canadian dollar;

•increases in employee healthcare costs;

•the impact of investment performance, certain participant elections such as lump sum distributions and changes in interest rates, legislation, healthcare cost trends, mortality, morbidity on pension and other postretirement benefits expense and funding requirements;

•changes in the residential real estate brokerage, mortgage and franchising industries and regulations that could affect brokerage, mortgage and franchising transactions;

•the ability to successfully integrate future acquired operations into a Registrant's business;

•the impact of supply chain disruptions and workforce availability on the respective Registrant's ongoing operations and its ability to timely complete construction projects;

•unanticipated construction delays, changes in costs, receipt of required permits and authorizations, ability to fund capital projects and other factors that could affect future facilities and infrastructure additions;

•the availability and price of natural gas in applicable geographic regions and demand for natural gas supply;

•the impact of new accounting guidance or changes in current accounting estimates and assumptions on the financial results of the respective Registrants; and

•other business or investment considerations that may be disclosed from time to time in the Registrants' filings with the SEC or in other publicly disseminated written documents.

Further details of the potential risks and uncertainties affecting the Registrants are described in the Registrants' filings with the SEC, including Part II, Item 1A and other discussions contained in this Form 10-Q. Each Registrant undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing factors should not be construed as exclusive.

v

Item 1.Financial Statements

Berkshire Hathaway Energy Company and its subsidiaries
Report of Independent Registered Public Accounting Firm	4
Consolidated Balance Sheets	5
Consolidated Statements of Operations	7
Consolidated Statements of Comprehensive (Loss) Income	8
Consolidated Statements of Changes in Equity	9
Consolidated Statements of Cash Flows	10
Notes to Consolidated Financial Statements	11
PacifiCorp and its subsidiaries
Report of Independent Registered Public Accounting Firm	46
Consolidated Balance Sheets	47
Consolidated Statements of Operations	49
Consolidated Statements of Changes in Shareholders' Equity	50
Consolidated Statements of Cash Flows	51
Notes to Consolidated Financial Statements	52
MidAmerican Energy Company
Report of Independent Registered Public Accounting Firm	68
Balance Sheets	69
Statements of Operations	71
Statements of Changes in Shareholder's Equity	72
Statements of Cash Flows	73
Notes to Financial Statements	74
MidAmerican Funding, LLC and its subsidiaries
Report of Independent Registered Public Accounting Firm	81
Consolidated Balance Sheets	82
Consolidated Statements of Operations	84
Consolidated Statements of Changes in Member's Equity	85
Consolidated Statements of Cash Flows	86
Notes to Consolidated Financial Statements	87
Nevada Power Company and its subsidiaries
Report of Independent Registered Public Accounting Firm	101
Consolidated Balance Sheets	102
Consolidated Statements of Operations	103
Consolidated Statements of Changes in Shareholder's Equity	104
Consolidated Statements of Cash Flows	105
Notes to Consolidated Financial Statements	106
Sierra Pacific Power Company and its subsidiaries
Report of Independent Registered Public Accounting Firm	120
Consolidated Balance Sheets	121
Consolidated Statements of Operations	122
Consolidated Statements of Changes in Shareholder's Equity	123
Consolidated Statements of Cash Flows	124
Notes to Consolidated Financial Statements	125
Eastern Energy Gas Holdings, LLC and its subsidiaries
Report of Independent Registered Public Accounting Firm	141
Consolidated Balance Sheets	142
Consolidated Statements of Operations	144
Consolidated Statements of Comprehensive Income	145
Consolidated Statements of Changes in Equity	146
Consolidated Statements of Cash Flows	147
Notes to Consolidated Financial Statements	148

1

Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations

Berkshire Hathaway Energy Company and its subsidiaries	27
PacifiCorp and its subsidiaries	61
MidAmerican Funding, LLC and its subsidiaries and MidAmerican Energy Company	91
Nevada Power Company and its subsidiaries	113
Sierra Pacific Power Company and its subsidiaries	133
Eastern Energy Gas Holdings, LLC and its subsidiaries	156

2

Berkshire Hathaway Energy Company and its subsidiaries

Consolidated Financial Section

3

PART I

Item 1.Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Berkshire Hathaway Energy Company

Results of Review of Interim Financial Information

We have reviewed the accompanying consolidated balance sheet of Berkshire Hathaway Energy Company and subsidiaries (the "Company") as of March 31, 2022, the related consolidated statements of operations, comprehensive (loss) income, changes in equity, and cash flows for the three-month periods ended March 31, 2022 and 2021, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2021, and the related consolidated statements of operations, comprehensive income, changes in equity, and cash flows for the year then ended (not presented herein); and in our report dated February 25, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Deloitte & Touche LLP

Des Moines, Iowa

April 29, 2022

4

BERKSHIRE HATHAWAY ENERGY COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Amounts in millions)

	As of
	March 31,		December 31,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,432	$	1,096
Restricted cash and cash equivalents	129		127
Trade receivables, net	2,342		2,468
Income tax receivable	656		344
Inventories	1,091		1,122
Mortgage loans held for sale	975		1,263
Derivative contracts	437		188
Regulatory assets	627		544
Other current assets	815		1,096
Total current assets	8,504		8,248
Property, plant and equipment, net	90,283		89,816
Goodwill	11,649		11,650
Regulatory assets	3,458		3,419
Investments and restricted cash, cash equivalents and investments	14,394		15,788
Other assets	3,181		3,144
Total assets	$	131,469	$	132,065

The accompanying notes are an integral part of these consolidated financial statements.

5

BERKSHIRE HATHAWAY ENERGY COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited) (continued)

(Amounts in millions)

	As of
	March 31,		December 31,
	2022		2021
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1,820	$	2,136
Accrued interest	644		537
Accrued property, income and other taxes	606		606
Accrued employee expenses	398		372
Short-term debt	1,849		2,009
Current portion of long-term debt	1,494		1,265
Other current liabilities	1,647		1,837
Total current liabilities	8,458		8,762
BHE senior debt	12,605		13,003
BHE junior subordinated debentures	100		100
Subsidiary debt	35,706		35,394
Regulatory liabilities	7,063		6,960
Deferred income taxes	12,786		12,938
Other long-term liabilities	4,327		4,319
Total liabilities	81,045		81,476
Commitments and contingencies (Note 8)
Equity:
BHE shareholders' equity:
Preferred stock - 100 shares authorized, $0.01 par value, 2 shares issued and outstanding	1,650		1,650
Common stock - 115 shares authorized, no par value, 76 shares issued and outstanding	—		—
Additional paid-in capital	6,374		6,374
Long-term income tax receivable	(744)		(744)
Retained earnings	40,608		40,754
Accumulated other comprehensive loss, net	(1,358)		(1,340)
Total BHE shareholders' equity	46,530		46,694
Noncontrolling interests	3,894		3,895
Total equity	50,424		50,589
Total liabilities and equity	$	131,469	$	132,065

The accompanying notes are an integral part of these consolidated financial statements.

6

BERKSHIRE HATHAWAY ENERGY COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Amounts in millions)

	Three-Month Periods
	Ended March 31,
	2022		2021
Operating revenue:
Energy	$	4,823	$	4,849
Real estate	1,207		1,232
Total operating revenue	6,030		6,081
Operating expenses:
Energy:
Cost of sales	1,460		1,569
Operations and maintenance	943		934
Depreciation and amortization	1,007		915
Property and other taxes	205		210
Real estate	1,179		1,120
Total operating expenses	4,794		4,748
Operating income	1,236		1,333
Other income (expense):
Interest expense	(532)		(530)
Capitalized interest	17		14
Allowance for equity funds	38		26
Interest and dividend income	23		21
Losses on marketable securities, net	(1,257)		(1,118)
Other, net	5		8
Total other income (expense)	(1,706)		(1,579)
Loss before income tax benefit and equity loss	(470)		(246)
Income tax benefit	(507)		(535)
Equity loss	(57)		(179)
Net (loss) income	(20)		110
Net income attributable to noncontrolling interests	109		106
Net (loss) income attributable to BHE shareholders	(129)		4
Preferred dividends	16		38
Loss on common shares	$	(145)	$	(34)

The accompanying notes are an integral part of these consolidated financial statements.

7

BERKSHIRE HATHAWAY ENERGY COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited)

(Amounts in millions)

	Three-Month Periods
	Ended March 31,
	2022		2021
Net (loss) income	$	(20)	$	110
Other comprehensive (loss) income, net of tax:
Unrecognized amounts on retirement benefits, net of tax of $3 and $4	15		7
Foreign currency translation adjustment	(110)		91
Unrealized gains on cash flow hedges, net of tax of $28 and $5	77		14
Total other comprehensive (loss) income, net of tax	(18)		112
Comprehensive (loss) income	(38)		222
Comprehensive income attributable to noncontrolling interests	109		106
Comprehensive (loss) income attributable to BHE shareholders	$	(147)	$	116

The accompanying notes are an integral part of these consolidated financial statements.

8

BERKSHIRE HATHAWAY ENERGY COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)

(Amounts in millions)

	BHE Shareholders' Equity
							Long-term				Accumulated
					Additional		Income				Other
	Preferred		Common		Paid-in		Tax		Retained		Comprehensive		Noncontrolling		Total
	Stock		Stock		Capital		Receivable		Earnings		Loss, Net		Interests		Equity
Balance, December 31, 2020	$	3,750	$	—	$	6,377	$	(658)	$	35,093	$	(1,552)	$	3,967	$	46,977
Net income	—		—		—		—		4		—		106		110
Other comprehensive income	—		—		—		—		—		112		—		112
Preferred stock dividend	—		—		—		—		(38)		—		—		(38)
Distributions	—		—		—		—		—		—		(113)		(113)
Other equity transactions	—		—		—		—		1		—		2		3
Balance, March 31, 2021	$	3,750	$	—	$	6,377	$	(658)	$	35,060	$	(1,440)	$	3,962	$	47,051
Balance, December 31, 2021	$	1,650	$	—	$	6,374	$	(744)	$	40,754	$	(1,340)	$	3,895	$	50,589
Net (loss) income	—		—		—		—		(129)		—		109		(20)
Other comprehensive loss	—		—		—		—		—		(18)		—		(18)
Preferred stock dividend	—		—		—		—		(16)		—		—		(16)
Distributions	—		—		—		—		—		—		(116)		(116)
Other equity transactions	—		—		—		—		(1)		—		6		5
Balance, March 31, 2022	$	1,650	$	—	$	6,374	$	(744)	$	40,608	$	(1,358)	$	3,894	$	50,424

The accompanying notes are an integral part of these consolidated financial statements.

9

BERKSHIRE HATHAWAY ENERGY COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Amounts in millions)

	Three-Month Periods
	Ended March 31,
	2022		2021
Cash flows from operating activities:
Net (loss) income	$	(20)	$	110
Adjustments to reconcile net (loss) income to net cash flows from operating activities:
Losses on marketable securities, net	1,257		1,118
Depreciation and amortization	1,022		927
Allowance for equity funds	(38)		(26)
Equity loss, net of distributions	88		221
Changes in regulatory assets and liabilities	(42)		(9)
Deferred income taxes and investment tax credits, net	(203)		(135)
Other, net	6		9
Changes in other operating assets and liabilities, net of effects from acquisitions:
Trade receivables and other assets	333		(249)
Derivative collateral, net	85		14
Pension and other postretirement benefit plans	(11)		(21)
Accrued property, income and other taxes, net	(347)		(453)
Accounts payable and other liabilities	91		19
Net cash flows from operating activities	2,221		1,525
Cash flows from investing activities:
Capital expenditures	(1,553)		(1,295)
Purchases of marketable securities	(170)		(128)
Proceeds from sales of marketable securities	149		104
Equity method investments	(17)		(26)
Other, net	19		(29)
Net cash flows from investing activities	(1,572)		(1,374)
Cash flows from financing activities:
Repayments of BHE senior debt	—		(450)
Proceeds from subsidiary debt	405		—
Repayments of subsidiary debt	(193)		(26)
Net (repayments of) proceeds from short-term debt	(165)		409
Distributions to noncontrolling interests	(117)		(115)
Other, net	(240)		(9)
Net cash flows from financing activities	(310)		(191)
Effect of exchange rate changes	(1)		1
Net change in cash and cash equivalents and restricted cash and cash equivalents	338		(39)
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period	1,244		1,445
Cash and cash equivalents and restricted cash and cash equivalents at end of period	$	1,582	$	1,406

The accompanying notes are an integral part of these consolidated financial statements.

10

BERKSHIRE HATHAWAY ENERGY COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1)    General

Berkshire Hathaway Energy Company ("BHE") is a holding company that owns a highly diversified portfolio of locally managed and operated businesses principally engaged in the energy industry (collectively with its subsidiaries, the "Company") and is a consolidated subsidiary of Berkshire Hathaway Inc. ("Berkshire Hathaway").

The Company's operations are organized as eight business segments: PacifiCorp and its subsidiaries ("PacifiCorp"), MidAmerican Funding, LLC and its subsidiaries ("MidAmerican Funding") (which primarily consists of MidAmerican Energy Company ("MidAmerican Energy")), NV Energy, Inc. and its subsidiaries ("NV Energy") (which primarily consists of Nevada Power Company and its subsidiaries ("Nevada Power") and Sierra Pacific Power Company and its subsidiaries ("Sierra Pacific")), Northern Powergrid Holdings Company and its subsidiaries ("Northern Powergrid") (which primarily consists of Northern Powergrid (Northeast) plc and Northern Powergrid (Yorkshire) plc), BHE Pipeline Group, LLC and its subsidiaries (which primarily consists of BHE GT&S, LLC and its subsidiaries ("BHE GT&S"), Northern Natural Gas Company ("Northern Natural Gas") and Kern River Gas Transmission Company ("Kern River")), BHE Transmission (which consists of BHE Canada Holdings Corporation and its subsidiaries ("BHE Canada") (which primarily consists of AltaLink, L.P. ("AltaLink")) and BHE U.S. Transmission, LLC and its subsidiaries), BHE Renewables, LLC and its subsidiaries ("BHE Renewables") and HomeServices of America, Inc. and its subsidiaries ("HomeServices"). The Company, through these locally managed and operated businesses, owns four utility companies in the U.S. serving customers in 11 states, two electricity distribution companies in Great Britain, five interstate natural gas pipeline companies and interests in a liquefied natural gas ("LNG") export, import and storage facility in the U.S., an electric transmission business in Canada, interests in electric transmission businesses in the U.S., a renewable energy business primarily investing in wind, solar, geothermal and hydroelectric projects, the largest residential real estate brokerage firm in the U.S. and one of the largest residential real estate brokerage franchise networks in the U.S.

The unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and the United States Securities and Exchange Commission's rules and regulations for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures required by GAAP for annual financial statements. Management believes the unaudited Consolidated Financial Statements contain all adjustments (consisting only of normal recurring adjustments) considered necessary for the fair presentation of the unaudited Consolidated Financial Statements as of March 31, 2022 and for the three-month periods ended March 31, 2022 and 2021. The results of operations for the three-month period ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year.

The preparation of the unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited Consolidated Financial Statements and the reported amounts of revenue and expenses during the period. Actual results may differ from the estimates used in preparing the unaudited Consolidated Financial Statements. Note 2 of Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 describes the most significant accounting policies used in the preparation of the unaudited Consolidated Financial Statements. There have been no significant changes in the Company's assumptions regarding significant accounting estimates and policies during the three-month period ended March 31, 2022.

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(2)    Property, Plant and Equipment, Net

Property, plant and equipment, net consists of the following (in millions):

		As of
	Depreciable	March 31,		December 31,
	Life	2022		2021
Regulated assets:
Utility generation, transmission and distribution systems	5-80 years	$	90,560	$	90,223
Interstate natural gas pipeline assets	3-80 years	17,526		17,423
		108,086		107,646
Accumulated depreciation and amortization		(33,248)		(32,680)
Regulated assets, net		74,838		74,966
Nonregulated assets:
Independent power plants	2-50 years	7,932		7,665
Cove Point LNG facility	40 years	3,366		3,364
Other assets	2-30 years	2,688		2,666
		13,986		13,695
Accumulated depreciation and amortization		(3,146)		(3,041)
Nonregulated assets, net		10,840		10,654
Net operating assets		85,678		85,620
Construction work-in-progress		4,605		4,196
Property, plant and equipment, net		$	90,283	$	89,816

Construction work-in-progress includes $4.3 billion as of March 31, 2022 and $3.8 billion as of December 31, 2021, related to the construction of regulated assets.

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(3)    Investments and Restricted Cash, Cash Equivalents and Investments

Investments and restricted cash, cash equivalents and investments consists of the following (in millions):

	As of
	March 31,		December 31,
	2022		2021
Investments:
BYD Company Limited common stock	$	6,446	$	7,693
Rabbi trusts	475		492
Other	315		305
Total investments	7,236		8,490
Equity method investments:
BHE Renewables tax equity investments	4,812		4,931
Iroquois Gas Transmission System, L.P.	744		735
Electric Transmission Texas, LLC	598		595
JAX LNG, LLC	93		92
Bridger Coal Company	44		45
Other	152		156
Total equity method investments	6,443		6,554
Restricted cash, cash equivalents and investments:
Quad Cities Station nuclear decommissioning trust funds	733		768
Other restricted cash and cash equivalents	150		148
Total restricted cash, cash equivalents and investments	883		916
Total investments and restricted cash, cash equivalents and investments	$	14,562	$	15,960
Reflected as:
Current assets	$	168	$	172
Noncurrent assets	14,394		15,788
Total investments and restricted cash, cash equivalents and investments	$	14,562	$	15,960

Investments

Losses on marketable securities, net recognized during the period consists of the following (in millions):

	Three-Month Periods
	Ended March 31,
	2022		2021
Unrealized losses recognized on marketable securities still held at the reporting date	$	(1,257)	$	(1,119)
Net gains recognized on marketable securities sold during the period	—		1
Losses on marketable securities, net	$	(1,257)	$	(1,118)

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Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

Cash equivalents consist of funds invested in money market mutual funds, U.S. Treasury Bills and other investments with a maturity of three months or less when purchased. Cash and cash equivalents exclude amounts where availability is restricted by legal requirements, loan agreements or other contractual provisions. Restricted cash and cash equivalents consist substantially of funds restricted for debt service obligations for certain of the Company's nonregulated renewable energy projects. A reconciliation of cash and cash equivalents and restricted cash and cash equivalents as presented in the Consolidated Statements of Cash Flows is outlined below and disaggregated by the line items in which they appear on the Consolidated Balance Sheets (in millions):

	As of
	March 31,		December 31,
	2022		2021
Cash and cash equivalents	$	1,432	$	1,096
Restricted cash and cash equivalents	129		127
Investments and restricted cash, cash equivalents and investments	21		21
Total cash and cash equivalents and restricted cash and cash equivalents	$	1,582	$	1,244

(4)    Recent Financing Transactions

Long-Term Debt

In April 2022, BHE issued $1 billion of its 4.6% Senior Notes due 2053 and intends to use the net proceeds for general corporate purposes, which may include repaying a portion of BHE's outstanding commercial paper obligations and redeeming a portion of its 4.00% Perpetual Preferred Stock issued to certain subsidiaries of Berkshire Hathaway.

In April 2022, Sierra Pacific purchased the following series of bonds that were held by the public: $30 million of its variable-rate tax-exempt Water Facilities Refunding Revenue Bonds, Series 2016C, due 2036; $25 million of its variable-rate tax-exempt Water Facilities Refunding Revenue Bonds, Series 2016D, due 2036; $25 million of its variable-rate tax-exempt Water Facilities Refunding Revenue Bonds, Series 2016E, due 2036; $75 million of its variable-rate tax-exempt Water Facilities Refunding Revenue Bonds, Series 2016F, due 2036; $20 million of its variable-rate tax-exempt Water Facilities Refunding Revenue Bonds, Series 2016G, due 2036; and $30 million of its variable-rate tax-exempt Pollution Control Refunding Revenue Bonds, Series 2016B, due 2029. Sierra Pacific purchased these bonds as required by the bond indentures. Sierra Pacific is holding these bonds and can re-offer them at a future date.

In April 2022, Northern Powergrid (Northeast) plc issued £350 million of its 3.25% bonds due 2052 and intends to use the net proceeds for general corporate purposes.

In January 2022, Nevada Power entered into a $300 million secured delayed draw term loan facility maturing in January 2024. Amounts borrowed under the facility bear interest at variable rates based on the Secured Overnight Financing Rate or a base rate, at Nevada Power's option, plus a pricing margin. In January 2022, Nevada Power borrowed $200 million under the facility at an initial interest rate of 0.55%. Nevada Power may draw all or none of the remaining unused commitment through June 2022. Nevada Power used the proceeds to repay amounts outstanding under its existing secured credit facility and for general corporate purposes.

14

(5)    Income Taxes

The effective income tax rate for the three-month period ended March 31, 2022, is 108% and results from a $507 million income tax benefit associated with a $470 million pre-tax loss, primarily relating to a pre-tax unrealized loss of $1,247 million on the Company's investment in BYD Company Limited. The $507 million income tax benefit is primarily comprised of a $99 million benefit (21%) from the application of the statutory income tax rate to the pre-tax loss and a $339 million benefit (72%) from income tax credits.

The effective income tax rate for the three-month period ended March 31, 2021, is 217% and results from a $535 million income tax benefit associated with a $246 million pre-tax loss, primarily relating to a pre-tax unrealized loss of $1,124 million on the Company's investment in BYD Company Limited. The $535 million income tax benefit is primarily comprised of a $52 million benefit (21%) from the application of the statutory income tax rate to the pre-tax loss, a $334 million benefit (136%) from income tax credits and a $51 million benefit (21%) from state income tax benefits, net of federal income tax impacts.

A reconciliation of the federal statutory income tax rate to the effective income tax rate applicable to income before income tax benefit is as follows:

	Three-Month Periods
	Ended March 31,
	2022		2021
Federal statutory income tax rate	21	%	21	%
Income tax credits	72		136
State income tax, net of federal income tax impacts	(3)		21
Income tax effect of foreign income	3		6
Effects of ratemaking	8		10
Equity income	3		15
Noncontrolling interest	5		9
Other, net	(1)		(1)
Effective income tax rate	108	%	217	%

Income tax credits relate primarily to PTCs from wind-powered generating facilities owned by MidAmerican Energy, PacifiCorp and BHE Renewables. Federal renewable electricity PTCs are earned as energy from qualifying wind-powered generating facilities is produced and sold and are based on a per-kilowatt hour rate pursuant to the applicable federal income tax law. Wind-powered generating facilities are eligible for the credits for 10 years from the date the qualifying generating facilities are placed in-service. PTCs for the three-month periods ended March 31, 2022 and 2021 totaled $338 million and $315 million, respectively.

The Company's provision for income taxes has been computed on a stand-alone basis. Berkshire Hathaway includes the Company in its consolidated U.S. federal and Iowa state income tax returns and the majority of the Company's U.S. federal income tax is remitted to or received from Berkshire Hathaway. The Company made no payments for federal income taxes to Berkshire Hathaway for the three-month periods ended March 31, 2022 and 2021.

15

(6)    Employee Benefit Plans

Domestic Operations

Net periodic benefit cost for the domestic pension and other postretirement benefit plans included the following components (in millions):

	Three-Month Periods
	Ended March 31,
	2022		2021
Pension:
Service cost	$	7	$	7
Interest cost	19		20
Expected return on plan assets	(27)		(33)
Settlement	2		—
Net amortization	4		6
Net periodic benefit cost	$	5	$	—
Other postretirement:
Service cost	$	2	$	2
Interest cost	5		5
Expected return on plan assets	(7)		(5)
Net amortization	—		(1)
Net periodic benefit cost	$	—	$	1

Amounts other than the service cost for pension and other postretirement benefit plans are recorded in Other, net in the Consolidated Statements of Operations. Employer contributions to the domestic pension and other postretirement benefit plans are expected to be $13 million and $4 million, respectively, during 2022. As of March 31, 2022, $4 million and $3 million of contributions had been made to the domestic pension and other postretirement benefit plans, respectively.

Foreign Operations

Net periodic benefit credit for the United Kingdom pension plan included the following components (in millions):

	Three-Month Periods
	Ended March 31,
	2022		2021
Service cost	$	4	$	4
Interest cost	10		8
Expected return on plan assets	(25)		(28)
Net amortization	6		14
Net periodic benefit credit	$	(5)	$	(2)

Amounts other than the service cost for the United Kingdom pension plan are recorded in Other, net in the Consolidated Statements of Operations. Employer contributions to the United Kingdom pension plan are expected to be £12 million during 2022. As of March 31, 2022, £3 million, or $4 million, of contributions had been made to the United Kingdom pension plan.

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(7)    Fair Value Measurements

The carrying value of the Company's cash, certain cash equivalents, receivables, payables, accrued liabilities and short-term borrowings approximates fair value because of the short-term maturity of these instruments. The Company has various financial assets and liabilities that are measured at fair value on the Consolidated Financial Statements using inputs from the three levels of the fair value hierarchy. A financial asset or liability classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The three levels are as follows:

•Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

•Level 2 — Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

•Level 3 — Unobservable inputs reflect the Company's judgments about the assumptions market participants would use in pricing the asset or liability since limited market data exists. The Company develops these inputs based on the best information available, including its own data.

The following table presents the Company's financial assets and liabilities recognized on the Consolidated Balance Sheets and measured at fair value on a recurring basis (in millions):

	Input Levels for Fair Value Measurements
	Level 1		Level 2		Level 3		Other(1)		Total
As of March 31, 2022:
Assets:
Commodity derivatives	$	13	$	534	$	59	$	(64)	$	542
Interest rate derivatives	11		58		25		—		94
Mortgage loans held for sale	—		975		—		—		975
Money market mutual funds	715		—		—		—		715
Debt securities:
U.S. government obligations	225		—		—		—		225
International government obligations	—		1		—		—		1
Corporate obligations	—		79		—		—		79
Municipal obligations	—		3		—		—		3
Agency, asset and mortgage-backed obligations	—		1		—		—		1
Equity securities:
U.S. companies	415		—		—		—		415
International companies	6,455		—		—		—		6,455
Investment funds	285		—		—		—		285
	$	8,119	$	1,651	$	84	$	(64)	$	9,790
Liabilities:
Commodity derivatives	$	(1)	$	(88)	$	(298)	$	69	$	(318)
Foreign currency exchange rate derivatives	—		(3)		—		—		(3)
Interest rate derivatives	—		—		(12)		—		(12)
	$	(1)	$	(91)	$	(310)	$	69	$	(333)

17

	Input Levels for Fair Value Measurements
	Level 1		Level 2		Level 3		Other(1)		Total
As of December 31, 2021:
Assets:
Commodity derivatives	$	5	$	271	$	73	$	(47)	$	302
Foreign currency exchange rate derivatives	—		3		—		—		3
Interest rate derivatives	1		3		20		—		24
Mortgage loans held for sale	—		1,263		—		—		1,263
Money market mutual funds	554		—		—		—		554
Debt securities:
U.S. government obligations	232		—		—		—		232
International government obligations	—		2		—		—		2
Corporate obligations	—		90		—		—		90
Municipal obligations	—		3		—		—		3
Agency, asset and mortgage-backed obligations	—		2		—		—		2
Equity securities:
U.S. companies	428		—		—		—		428
International companies	7,703		—		—		—		7,703
Investment funds	237		—		—		—		237
	$	9,160	$	1,637	$	93	$	(47)	$	10,843
Liabilities:
Commodity derivatives	$	(2)	$	(113)	$	(224)	$	73	$	(266)
Foreign currency exchange rate derivatives	—		(3)		—		—		(3)
Interest rate derivatives	—		(7)		(1)		—		(8)
	$	(2)	$	(123)	$	(225)	$	73	$	(277)

(1)Represents netting under master netting arrangements and a net cash collateral receivable of $5 million and $26 million as of March 31, 2022 and December 31, 2021, respectively.

Derivative contracts are recorded on the Consolidated Balance Sheets as either assets or liabilities and are stated at estimated fair value unless they are designated as normal purchases or normal sales and qualify for the exception afforded by GAAP. When available, the fair value of derivative contracts is estimated using unadjusted quoted prices for identical contracts in the market in which the Company transacts. When quoted prices for identical contracts are not available, the Company uses forward price curves. Forward price curves represent the Company's estimates of the prices at which a buyer or seller could contract today for delivery or settlement at future dates. The Company bases its forward price curves upon market price quotations, when available, or internally developed and commercial models, with internal and external fundamental data inputs. Market price quotations are obtained from independent brokers, exchanges, direct communication with market participants and actual transactions executed by the Company. Market price quotations are generally readily obtainable for the applicable term of the Company's outstanding derivative contracts; therefore, the Company's forward price curves reflect observable market quotes. Market price quotations for certain electricity and natural gas trading hubs are not as readily obtainable due to the length of the contract. Given that limited market data exists for these contracts, as well as for those contracts that are not actively traded, the Company uses forward price curves derived from internal models based on perceived pricing relationships to major trading hubs that are based on unobservable inputs. The estimated fair value of these derivative contracts is a function of the underlying forward commodity prices, interest rates, currency rates, related volatility, counterparty creditworthiness and duration of contracts.

The Company's mortgage loans held for sale are valued based on independent quoted market prices, where available, or the prices of other mortgage whole loans with similar characteristics. As necessary, these prices are adjusted for typical securitization activities, including servicing value, portfolio composition, market conditions and liquidity.

18

The Company's investments in money market mutual funds and debt and equity securities are stated at fair value. When available, a readily observable quoted market price or net asset value of an identical security in an active market is used to record the fair value. In the absence of a quoted market price or net asset value of an identical security, the fair value is determined using pricing models or net asset values based on observable market inputs and quoted market prices of securities with similar characteristics.

The following table reconciles the beginning and ending balances of the Company's financial assets and liabilities measured at fair value on a recurring basis using significant Level 3 inputs (in millions):

	Three-Month Periods
	Ended March 31,
			Interest
	Commodity		Rate
	Derivatives		Derivatives
2022:
Beginning balance	$	(151)	$	19
Changes included in earnings(1)	(56)		(6)
Changes in fair value recognized in OCI	5		—
Changes in fair value recognized in net regulatory assets	(60)		—
Settlements	23		—
Ending balance	$	(239)	$	13

2021:
Beginning balance	$	116	$	62
Changes included in earnings(1)	(6)		(21)
Changes in fair value recognized in OCI	(1)		—
Changes in fair value recognized in net regulatory assets	16		—
Settlements	(1)		—
Ending balance	$	124	$	41

(1)Changes included in earnings for interest rate derivatives are reported net of amounts related to the satisfaction of the associated loan commitment.

The Company's long-term debt is carried at cost, including fair value adjustments and unamortized premiums, discounts and debt issuance costs as applicable, on the Consolidated Balance Sheets. The fair value of the Company's long-term debt is a Level 2 fair value measurement and has been estimated based upon quoted market prices, where available, or at the present value of future cash flows discounted at rates consistent with comparable maturities with similar credit risks. The carrying value of the Company's variable-rate long-term debt approximates fair value because of the frequent repricing of these instruments at market rates. The following table presents the carrying value and estimated fair value of the Company's long-term debt (in millions):

	As of March 31, 2022				As of December 31, 2021
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Long-term debt	$	49,905	$	52,246	$	49,762	$	57,189

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(8)    Commitments and Contingencies

Legal Matters

The Company is party to a variety of legal actions arising out of the normal course of business. Plaintiffs occasionally seek punitive or exemplary damages. The Company does not believe that such normal and routine litigation will have a material impact on its consolidated financial results. The Company is also involved in other kinds of legal actions, some of which assert or may assert claims or seek to impose fines, penalties and other costs in substantial amounts and are described below.

California and Oregon 2020 Wildfires

In September 2020, a severe weather event resulting in high winds, low humidity and warm temperatures contributed to several major wildfires, real and personal property and natural resource damage, personal injuries and loss of life and widespread power outages in Oregon and Northern California (the "2020 Wildfires"). The wildfires spread across certain parts of PacifiCorp's service territory and surrounding areas across multiple counties in Oregon and California, including Siskiyou County, California; Jackson County, Oregon; Douglas County, Oregon; Marion County, Oregon; Lincoln County, Oregon; and Klamath County, Oregon burning over 500,000 acres in aggregate. Third party reports for these wildfires indicate over 2,000 structures destroyed, including residences; several structures damaged; multiple individuals injured; and several fatalities. Fire suppression costs estimated by various agencies total approximately $150 million. Investigations into the cause and origin of each wildfire are complex and ongoing and being conducted by various entities, including the United States Forest Service, the California Public Utilities Commission, the Oregon Department of Forestry, the Oregon Department of Justice, PacifiCorp and various experts engaged by PacifiCorp.

Multiple lawsuits have been filed in Oregon and California, including a putative class action complaint in Oregon, on behalf of citizens and businesses who suffered damages from fires allegedly caused by PacifiCorp. Additionally, several insurance carriers have filed subrogation complaints in Oregon and California with allegations similar to those made in the aforementioned lawsuits. The final determinations of liability, however, will only be made following comprehensive investigations and litigation processes.

In California, under inverse condemnation, courts have held that investor-owned utilities can be liable for real and personal property damages without the utility being found negligent and regardless of fault. California law also permits inverse condemnation plaintiffs to recover reasonable attorney fees and costs. In both Oregon and California, PacifiCorp has equipment in areas accessed through special use permits, easements or similar agreements that may contain provisions requiring it to pay for damages caused by its equipment regardless of fault. Even if inverse condemnation or other provisions do not apply, PacifiCorp could nevertheless be found liable for all damages proximately caused by negligence, including real and personal property and natural resource damage; fire suppression costs; personal injury and loss of life damages; and interest.

PacifiCorp has accrued $136 million as its best estimate of the potential losses net of expected insurance recoveries associated with the 2020 Wildfires that are considered probable of being incurred. These accruals include estimated losses for fire suppression costs, real and personal property damage, personal injury damages and loss of life damages, but exclude estimated potential losses for natural resource damage as PacifiCorp is unable to reasonably estimate such losses at this time. It is reasonably possible that PacifiCorp will incur additional losses beyond the amounts accrued; however, PacifiCorp is currently unable to estimate the range of possible additional losses that could be incurred due to the number of properties and parties involved and the variation in those types of properties and lack of available details. To the extent losses beyond the amounts accrued are incurred, additional insurance coverage is expected to be available to cover at least a portion of the losses.

20

Environmental Laws and Regulations

The Company is subject to federal, state, local and foreign laws and regulations regarding climate change, renewable portfolio standards, air and water quality, emissions performance standards, coal combustion byproduct disposal, hazardous and solid waste disposal, protected species and other environmental matters that have the potential to impact the Company's current and future operations. The Company believes it is in material compliance with all applicable laws and regulations.

Hydroelectric Relicensing

PacifiCorp is a party to the 2016 amended Klamath Hydroelectric Settlement Agreement ("KHSA"), which is intended to resolve disputes surrounding PacifiCorp's efforts to relicense the Klamath Hydroelectric Project. The KHSA establishes a process for PacifiCorp, the states of Oregon and California ("States") and other stakeholders to assess whether dam removal can occur consistent with the settlement's terms. For PacifiCorp, the key elements of the settlement include: (1) a contribution from PacifiCorp's Oregon and California customers capped at $200 million plus $250 million in California bond funds; (2) complete indemnification from harms associated with dam removal; (3) transfer of the FERC license to a third-party dam removal entity, the Klamath River Renewal Corporation ("KRRC"), who would conduct dam removal; and (4) ability for PacifiCorp to operate the facilities for the benefit of customers until dam removal commences.

In September 2016, the KRRC and PacifiCorp filed a joint application with the FERC to transfer the license for the four mainstem Klamath dams from PacifiCorp to the KRRC. The FERC approved partial transfer of the Klamath license in a July 2020 order, subject to the condition that PacifiCorp remains co-licensee. Under the amended KHSA, PacifiCorp did not agree to remain co-licensee during the surrender and removal process given concerns about liability protections for PacifiCorp and its customers. In November 2020, PacifiCorp entered a memorandum of agreement (the "MOA") with the KRRC, the Karuk Tribe, the Yurok Tribe and the States to continue implementation of the KHSA. The agreement required the States, PacifiCorp and KRRC to file a new license transfer application to remove PacifiCorp from the license for the Klamath Hydroelectric Project and add the States and KRRC as co-licensees for the purposes of surrender. In addition, the MOA provides for additional contingency funding of $45 million, equally split between PacifiCorp and the States, and for PacifiCorp and the States to equally share in any additional cost overruns in the unlikely event that dam removal costs exceed the $450 million in funding to ensure dam removal is complete. The MOA also requires PacifiCorp to cover the costs associated with certain pre-existing environmental conditions. In June 2021, the FERC approved transfer of the four mainstem Klamath dams from PacifiCorp to the KRRC and the States as co-licensees. In July 2021, the Oregon, Wyoming, Idaho and California state public utility commissions conditionally approved the required property transfer applications. In August 2021, PacifiCorp notified the Public Service Commission of Utah of the property transfer, however no formal approval is required in Utah. The transfer will be effective within 30 days following the issuance of a license surrender from the FERC for the project, which remains pending. In February 2022, the FERC staff issued a draft environmental impact statement for the project, concluding that dam removal is the preferred alternative. Comments on the draft were due in April 2022, and a final environmental impact statement is expected later in 2022.

Guarantees

The Company has entered into guarantees as part of the normal course of business and the sale of certain assets. These guarantees are not expected to have a material impact on the Company's consolidated financial results.

21

(9)    Revenue from Contracts with Customers

Energy Products and Services

The following table summarizes the Company's energy products and services revenue from contracts with customers ("Customer Revenue") by regulated and nonregulated, with further disaggregation of regulated by line of business, including a reconciliation to the Company's reportable segment information included in Note 11 (in millions):

	For the Three-Month Period Ended March 31, 2022
	PacifiCorp		MidAmerican Funding		NV Energy		Northern Powergrid		BHE Pipeline Group		BHE Transmission		BHE Renewables		BHE and Other(1)		Total
Customer Revenue:
Regulated:
Retail electric	$	1,185	$	472	$	599	$	—	$	—	$	—	$	—	$	—	$	2,256
Retail gas	—		337		51		—		—		—		—		—		388
Wholesale	55		161		20		—		—		—		—		—		236
Transmission and    distribution	32		15		17		269		—		176		—		—		509
Interstate pipeline	—		—		—		—		745		—		—		(41)		704
Other	20		—		1		—		1		—		—		—		22
Total Regulated	1,292		985		688		269		746		176		—		(41)		4,115
Nonregulated	—		2		—		15		278		7		169		133		604
Total Customer Revenue	1,292		987		688		284		1,024		183		169		92		4,719
Other revenue	5		18		5		31		11		—		(2)		36		104
Total	$	1,297	$	1,005	$	693	$	315	$	1,035	$	183	$	167	$	128	$	4,823

	For the Three-Month Period Ended March 31, 2021
	PacifiCorp		MidAmerican Funding		NV Energy		Northern Powergrid		BHE Pipeline Group		BHE Transmission		BHE Renewables		BHE and Other(1)		Total
Customer Revenue:
Regulated:
Retail electric	$	1,145	$	452	$	511	$	—	$	—	$	—	$	—	$	—	$	2,108
Retail gas	—		460		38		—		—		—		—		—		498
Wholesale	36		125		15		—		17		—		—		—		193
Transmission and    distribution	25		15		21		263		—		172		—		—		496
Interstate pipeline	—		—		—		—		815		—		—		(41)		774
Other	23		—		—		—		2		—		—		—		25
Total Regulated	1,229		1,052		585		263		834		172		—		(41)		4,094
Nonregulated	—		10		—		10		237		8		166		187		618
Total Customer Revenue	1,229		1,062		585		273		1,071		180		166		146		4,712
Other revenue	13		5		6		27		22		—		24		40		137
Total	$	1,242	$	1,067	$	591	$	300	$	1,093	$	180	$	190	$	186	$	4,849

(1)The BHE and Other reportable segment represents amounts related principally to other entities, including MidAmerican Energy Services, LLC, corporate functions and intersegment eliminations.

22

Real Estate Services

The following table summarizes the Company's real estate services Customer Revenue by line of business (in millions):

	HomeServices
	Three-Month Periods
	Ended March 31,
	2022		2021
Customer Revenue:
Brokerage	$	1,092	$	1,022
Franchise	20		18
Total Customer Revenue	1,112		1,040
Mortgage and other revenue	95		192
Total	$	1,207	$	1,232

Remaining Performance Obligations

The following table summarizes the Company's revenue it expects to recognize in future periods related to significant unsatisfied remaining performance obligations for fixed contracts with expected durations in excess of one year as of March 31, 2022, by reportable segment (in millions):

	Performance obligations expected to be satisfied:
	Less than 12 months		More than 12 months		Total
BHE Pipeline Group	$	2,878	$	22,103	$	24,981

(10)    Components of Other Comprehensive Income (Loss), Net

The following table shows the change in accumulated other comprehensive income (loss) by each component of other comprehensive income (loss), net of applicable income tax (in millions):

	Unrecognized		Foreign		Unrealized				AOCI
	Amounts on		Currency		(Losses) Gains				Attributable
	Retirement		Translation		on Cash		Noncontrolling		To BHE
	Benefits		Adjustment		Flow Hedges		Interests		Shareholders, Net
Balance, December 31, 2020	$	(492)	$	(1,062)	$	(8)	$	10	$	(1,552)
Other comprehensive income	7		91		14		—		112
Balance, March 31, 2021	$	(485)	$	(971)	$	6	$	10	$	(1,440)
Balance, December 31, 2021	$	(318)	$	(1,086)	$	59	$	5	$	(1,340)
Other comprehensive income (loss)	15		(110)		77		—		(18)
Balance, March 31, 2022	$	(303)	$	(1,196)	$	136	$	5	$	(1,358)

23

(11)    Segment Information

The Company's reportable segments with foreign operations include Northern Powergrid, whose business is principally in the United Kingdom, and BHE Transmission, whose business includes operations in Canada. Intersegment eliminations and adjustments, including the allocation of goodwill, have been made. Information related to the Company's reportable segments is shown below (in millions):

	Three-Month Periods
	Ended March 31,
	2022		2021
Operating revenue:
PacifiCorp	$	1,297	$	1,242
MidAmerican Funding	1,005		1,067
NV Energy	693		591
Northern Powergrid	315		300
BHE Pipeline Group	1,035		1,093
BHE Transmission	183		180
BHE Renewables	167		190
HomeServices	1,207		1,232
BHE and Other(1)	128		186
Total operating revenue	$	6,030	$	6,081

Depreciation and amortization:
PacifiCorp	$	280	$	264
MidAmerican Funding	250		207
NV Energy	140		136
Northern Powergrid	80		71
BHE Pipeline Group	131		118
BHE Transmission	58		58
BHE Renewables	65		60
HomeServices	15		11
BHE and Other(1)	3		2
Total depreciation and amortization	$	1,022	$	927

24

	Three-Month Periods
	Ended March 31,
	2022		2021
Operating income:
PacifiCorp	$	216	$	234
MidAmerican Funding	100		48
NV Energy	62		70
Northern Powergrid	159		151
BHE Pipeline Group	538		618
BHE Transmission	83		81
BHE Renewables	(2)		33
HomeServices	28		112
BHE and Other(1)	52		(14)
Total operating income	1,236		1,333
Interest expense	(532)		(530)
Capitalized interest	17		14
Allowance for equity funds	38		26
Interest and dividend income	23		21
Losses on marketable securities, net	(1,257)		(1,118)
Other, net	5		8
Total loss before income tax benefit and equity loss	$	(470)	$	(246)

Interest expense:
PacifiCorp	$	106	$	107
MidAmerican Funding	82		78
NV Energy	51		52
Northern Powergrid	32		33
BHE Pipeline Group	37		38
BHE Transmission	38		38
BHE Renewables	41		40
HomeServices	1		1
BHE and Other(1)	144		143
Total interest expense	$	532	$	530

Loss on common shares:
PacifiCorp	$	130	$	169
MidAmerican Funding	241		144
NV Energy	29		34
Northern Powergrid	111		104
BHE Pipeline Group	322		383
BHE Transmission	62		59
BHE Renewables	104		16
HomeServices	21		84
BHE and Other(1)	(1,165)		(1,027)
Total loss on common shares	$	(145)	$	(34)

25

	As of
	March 31,		December 31,
	2022		2021
Assets:
PacifiCorp	$	27,999	$	27,615
MidAmerican Funding	25,451		25,352
NV Energy	15,430		15,239
Northern Powergrid	9,175		9,326
BHE Pipeline Group	20,486		20,434
BHE Transmission	9,618		9,476
BHE Renewables	12,138		11,829
HomeServices	4,036		4,574
BHE and Other(1)	7,136		8,220
Total assets	$	131,469	$	132,065

(1)The differences between the reportable segment amounts and the consolidated amounts, described as BHE and Other, relate principally to other entities, including MidAmerican Energy Services, LLC, corporate functions and intersegment eliminations.

	Three-Month Periods
	Ended March 31,
	2022		2021
Operating revenue by country:
U.S.	$	5,534	$	5,597
United Kingdom	315		300
Canada	181		177
Other	—		7
Total operating revenue by country	$	6,030	$	6,081

Loss before income tax benefit and equity loss by country:
U.S.	$	(654)	$	(423)
United Kingdom	139		132
Canada	46		39
Other	(1)		6
Total loss before income tax benefit and equity loss by country	$	(470)	$	(246)

The following table shows the change in the carrying amount of goodwill by reportable segment for the three-month period ended March 31, 2022 (in millions):

									BHE Pipeline Group
	PacifiCorp		MidAmerican Funding		NV Energy		Northern Powergrid				BHE Transmission		BHE Renewables		HomeServices
																	Total
December 31, 2021	$	1,129	$	2,102	$	2,369	$	992	$	1,814	$	1,563	$	95	$	1,586	$	11,650
Acquisitions	—		—		—		—		—		—		—		3		3
Foreign currency translation	—		—		—		(20)		—		16		—		—		(4)
March 31, 2022	$	1,129	$	2,102	$	2,369	$	972	$	1,814	$	1,579	$	95	$	1,589	$	11,649

26

Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations

The following is management's discussion and analysis of certain significant factors that have affected the consolidated financial condition and results of operations of the Company during the periods included herein. Explanations include management's best estimate of the impact of weather, customer growth, usage trends and other factors. This discussion should be read in conjunction with the Company's historical unaudited Consolidated Financial Statements and Notes to Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q. The Company's actual results in the future could differ significantly from the historical results.

Berkshire Hathaway Energy's operations are organized as eight business segments: PacifiCorp, MidAmerican Funding (which primarily consists of MidAmerican Energy), NV Energy (which primarily consists of Nevada Power and Sierra Pacific), Northern Powergrid (which primarily consists of Northern Powergrid (Northeast) plc and Northern Powergrid (Yorkshire) plc), BHE Pipeline Group (which primarily consists of BHE GT&S, Northern Natural Gas and Kern River), BHE Transmission (which consists of BHE Canada (which primarily consists of AltaLink) and BHE U.S. Transmission), BHE Renewables and HomeServices. BHE, through these locally managed and operated businesses, owns four utility companies in the U.S. serving customers in 11 states, two electricity distribution companies in Great Britain, five interstate natural gas pipeline companies, one of which owns a liquefied natural gas ("LNG") export, import and storage facility, in the U.S., an electric transmission business in Canada, interests in electric transmission businesses in the U.S., a renewable energy business primarily investing in wind, solar, geothermal and hydroelectric projects, the largest residential real estate brokerage firm in the U.S. and one of the largest residential real estate brokerage franchise networks in the U.S. The reportable segment financial information includes all necessary adjustments and eliminations needed to conform to the Company's significant accounting policies. The differences between the reportable segment amounts and the consolidated amounts, described as BHE and Other, relate principally to other entities, including MidAmerican Energy Services, LLC, corporate functions and intersegment eliminations.

27

Results of Operations for the First Quarter of 2022 and 2021

Overview

Operating revenue and earnings on common shares for the Company's reportable segments are summarized as follows (in millions):

	First Quarter
	2022		2021		Change
Operating revenue:
PacifiCorp	$	1,297	$	1,242	$	55	4	%
MidAmerican Funding	1,005		1,067		(62)		(6)
NV Energy	693		591		102		17
Northern Powergrid	315		300		15		5
BHE Pipeline Group	1,035		1,093		(58)		(5)
BHE Transmission	183		180		3		2
BHE Renewables	167		190		(23)		(12)
HomeServices	1,207		1,232		(25)		(2)
BHE and Other	128		186		(58)		(31)
Total operating revenue	$	6,030	$	6,081	$	(51)	(1)	%
Loss on common shares:
PacifiCorp	$	130	$	169	$	(39)	(23)	%
MidAmerican Funding	241		144		97		67
NV Energy	29		34		(5)		(15)
Northern Powergrid	111		104		7		7
BHE Pipeline Group	322		383		(61)		(16)
BHE Transmission	62		59		3		5
BHE Renewables(1)	104		16		88		*
HomeServices	21		84		(63)		(75)
BHE and Other	(1,165)		(1,027)		(138)		(13)
Total loss on common shares	$	(145)	$	(34)	$	(111)	*

(1)Includes the tax attributes of disregarded entities that are not required to pay income taxes and the earnings of which are taxable directly to BHE.

*    Not meaningful

Earnings on common shares decreased $111 million for the first quarter of 2022 compared to 2021. The first quarter of 2022 included a pre-tax unrealized loss of $1,247 million ($985 million after-tax) compared to a pre-tax unrealized loss in the first quarter of 2021 of $1,124 million ($818 million after-tax) on the Company's investment in BYD Company Limited. Excluding the impact of this item, adjusted earnings on common shares for the first quarter of 2022 was $840 million, an increase of $56 million, or 7%, compared to adjusted earnings on common shares in the first quarter of 2021 of $784 million.

28

The decrease in earnings on common shares for the first quarter of 2022 compared to 2021 was primarily due to the following:

•The Utilities' earnings increased $53 million for the first quarter of 2022 compared to 2021, reflecting higher electric utility margin and favorable income tax expense from higher PTCs recognized, partially offset by higher depreciation and amortization expense and higher operations and maintenance expense. Electric retail customer volumes increased 3.4% for the first quarter of 2022 compared to 2021, primarily due to higher customer usage, an increase in the average number of customers and the favorable impact of weather;

•BHE Pipeline Group's earnings decreased $61 million for the first quarter of 2022 compared to 2021, primarily due to lower earnings of $70 million at Northern Natural Gas from higher gross margin on gas sales and higher transportation revenue recognized in the first quarter of 2021 from the February 2021 polar vortex weather event, partially offset by favorable recurring transportation revenue due to higher volumes and rates;

•BHE Renewables' earnings increased $88 million for the first quarter of 2022 compared to 2021, primarily due to higher earnings on tax equity investments of $96 million as a result of the unfavorable impacts recognized in the first quarter of 2021 from the February 2021 polar vortex weather event;

•HomeServices' earnings decreased $63 million for the first quarter of 2022 compared to 2021, primarily due to lower earnings from mortgage services of $48 million, from a decrease in funded volume, and lower earnings from brokerage and settlement services of $16 million, largely attributable to a decrease in closed units at existing companies; and

•BHE and Other's earnings decreased $138 million for the first quarter of 2022 compared to 2021, mainly due to the $167 million unfavorable comparative change in the after-tax unrealized position of the Company's investment in BYD Company Limited, partially offset by $21 million of lower dividends on BHE's 4.00% Perpetual Preferred Stock issued to certain subsidiaries of Berkshire Hathaway.

Reportable Segment Results

PacifiCorp

Operating revenue increased $55 million for the first quarter of 2022 compared to 2021, primarily due to higher retail revenue of $40 million and higher wholesale and other revenue of $15 million. Retail revenue increased primarily due to higher retail volumes of $25 million and price impacts of $15 million from higher tariffs. Retail customer volumes increased 1.9%, primarily due to an increase in the average number of customers, the favorable impact of weather and higher customer usage. Wholesale and other revenue increased primarily due to higher average wholesale prices and higher wheeling revenue.

Earnings decreased $39 million for the first quarter of 2022 compared to 2021, primarily due to higher operations and maintenance expense of $18 million, higher depreciation and amortization expense of $16 million, from additional assets placed in-service, and increased income tax expense, partially offset by higher utility margin of $14 million. Operations and maintenance expense increased mainly due to higher thermal plant maintenance and higher costs associated with additional wind-powered generating facilities placed in-service. Utility margin increased primarily due to the higher retail, wholesale and other revenues and higher deferred net power costs in accordance with established adjustment mechanisms, partially offset by higher purchased power and thermal generation costs.

MidAmerican Funding

Operating revenue decreased $62 million for the first quarter of 2022 compared to 2021, primarily due to lower natural gas operating revenue of $116 million, partially offset by higher electric operating revenue of $63 million. Natural gas operating revenue decreased due to a lower average per-unit cost of natural gas sold resulting in lower purchased gas adjustment recoveries of $134 million (fully offset in cost of sales), partially offset by the impacts of tax reform of $8 million, the impacts of certain regulatory recovery mechanisms of $7 million and the favorable impacts of weather of $4 million. Electric operating revenue increased due to higher wholesale and other revenue of $43 million and higher retail revenue of $20 million. Electric wholesale and other revenue increased mainly due to higher wholesale volumes of $24 million and higher average wholesale per-unit prices of $19 million. Electric retail revenue increased primarily due to higher customer volumes of $18 million and higher recoveries through adjustment clauses of $4 million (fully offset in expense, primarily cost of sales), partially offset by price impacts from changes in sales mix of $2 million. Electric retail customer volumes increased 5.6% due to higher customer usage and the favorable impact of weather.

29

Earnings increased $97 million for the first quarter of 2022 compared to 2021, primarily due to higher electric utility margin of $89 million, a favorable income tax benefit and higher natural gas utility margin of $18 million, partially offset by higher depreciation and amortization expense of $43 million and lower nonregulated utility margin of $9 million. Electric utility margin increased primarily due to the higher retail and wholesale revenues as well as lower purchased power costs. The favorable income tax benefit was largely due to higher PTCs recognized of $52 million, from new wind-powered generating facilities placed in-service, and the effects of ratemaking. Depreciation and amortization expense increased primarily from the impacts of certain regulatory mechanisms and additional assets placed in-service.

NV Energy

Operating revenue increased $102 million for the first quarter of 2022 compared to 2021, primarily due to higher electric operating revenue of $90 million and higher natural gas operating revenue of $13 million. Electric operating revenue increased primarily due to higher fully-bundled energy rates (fully offset in cost of sales) of $88 million, higher retail customer volumes of $4 million and higher transmission and wholesale revenue of $4 million, partially offset by lower regulatory-related revenue deferrals. Electric retail customer volumes increased 4.0%, primarily due to an increase in the average number of customers and higher customer usage, partially offset by the unfavorable impact of weather. Natural gas operating revenue increased due to a higher average per-unit cost of natural gas sold (fully offset in cost of sales).

Earnings decreased $5 million for the first quarter of 2022 compared to 2021, mainly due to higher operations and maintenance expense of $6 million largely from increased plant operations and maintenance expenses and an unfavorable change in earnings sharing at the Nevada Utilities.

Northern Powergrid

Operating revenue increased $15 million for the first quarter of 2022 compared to 2021, primarily due to higher distribution revenue of $10 million, revenue from a gas project reaching commercial operation in March 2022 totaling $10 million and higher smart metering revenue of $6 million, partially offset by $9 million from the stronger U.S. dollar. Distribution revenue increased from higher tariff rates of $14 million, partially offset by a 2.6% decline in units distributed of $3 million.

Earnings increased $7 million for the first quarter of 2022 compared to 2021, primarily due to the higher distribution revenue, partially offset by $3 million from the stronger U.S. dollar.

BHE Pipeline Group

Operating revenue decreased $58 million for the first quarter of 2022 compared to 2021, primarily due to lower gas sales of $41 million related to system balancing activities at Northern Natural Gas, lower transportation revenue of $20 million at Northern Natural Gas and lower gas sales of $17 million at EGTS used for operational and system balancing purposes, partially offset by higher LNG variable revenue of $13 million at BHE GT&S and higher non-regulated revenue of $11 million at BHE GT&S. The variances in gas sales and transportation revenue at Northern Natural Gas included favorable impacts recognized in the first quarter of 2021 of $77 million and $49 million, respectively, from the February 2021 polar vortex weather event. Excluding this item, gas sales increased $36 million (largely offset in cost of sales) and transportation revenue increased $29 million due to higher volumes and rates.

Earnings decreased $61 million for the first quarter of 2022 compared to 2021, primarily due to lower earnings of $70 million at Northern Natural Gas as the higher gross margin on gas sales and higher transportation revenue recognized in the first quarter of 2021 from the February 2021 polar vortex weather event were partially offset by the favorable transportation revenue due to higher volumes and rates.

BHE Transmission

Operating revenue increased $3 million for the first quarter of 2022 compared to 2021, mainly due to higher revenue at AltaLink from recovery of higher costs and from additional assets placed in-service.

Earnings increased $3 million for the first quarter of 2022 compared to 2021, mainly due to the additional assets placed in-service at AltaLink and improved equity earnings at Electric Transmission Texas, LLC.

30

BHE Renewables

Operating revenue decreased $23 million for the first quarter of 2022 compared to 2021, primarily due to unfavorable changes in the valuation of certain derivative contracts totaling $43 million and lower hydro revenues of $8 million due to the transfer of the Casecnan generating facility to the National Irrigation Administration in December 2021, partially offset by higher wind, solar and geothermal revenues of $27 million from higher generation and pricing.

Earnings increased $88 million for the first quarter 2022 compared to 2021, primarily due to higher wind earnings of $92 million and higher solar earnings of $6 million, largely due to the higher operating revenue, partially offset by lower hydro earnings of $10 million due to the Casecnan generating facility transfer. Wind earnings increased primarily due to higher earnings on tax equity investments of $96 million as a result of the unfavorable impacts recognized in the first quarter of 2021 from the February 2021 polar vortex weather event.

HomeServices

Operating revenue decreased $25 million for the first quarter of 2022 compared to 2021, primarily due to lower mortgage revenue of $97 million from a 41% decrease in funded volume due to lower refinance activity, partially offset by higher brokerage revenue of $78 million from a 9% increase in closed transaction volume. The increase in brokerage volume was due to acquisitions and an 11% increase in average sales price at existing companies offset by 12% fewer closed units at existing companies.

Earnings decreased $63 million for the first quarter of 2022 compared to 2021, primarily due to lower earnings from mortgage services of $48 million, from the decrease in funded volume, and lower earnings from brokerage and settlement services of $16 million, largely attributable to the decrease in closed units at existing companies.

BHE and Other

Operating revenue decreased $58 million for the first quarter of 2022 compared to 2021, primarily due to lower electricity sales revenue at MidAmerican Energy Services, LLC, from unfavorable pricing.

Earnings decreased $138 million for the first quarter of 2022 compared to 2021, primarily due to the $167 million unfavorable comparative change in the after-tax unrealized position of the Company's investment in BYD Company Limited and $54 million of lower federal income tax credits recognized on a consolidated basis, partially offset by higher earnings of $41 million at MidAmerican Energy Services, LLC, mainly due to favorable changes in unrealized positions on derivative contracts, lower corporate costs and $21 million of lower dividends on BHE's 4.00% Perpetual Preferred Stock issued to certain subsidiaries of Berkshire Hathaway.

31

Liquidity and Capital Resources

Each of BHE's direct and indirect subsidiaries is organized as a legal entity separate and apart from BHE and its other subsidiaries. It should not be assumed that the assets of any subsidiary will be available to satisfy BHE's obligations or the obligations of its other subsidiaries. However, unrestricted cash or other assets that are available for distribution may, subject to applicable law, regulatory commitments and the terms of financing and ring-fencing arrangements for such parties, be advanced, loaned, paid as dividends or otherwise distributed or contributed to BHE or affiliates thereof. The Company's long-term debt may include provisions that allow BHE or its subsidiaries to redeem such debt in whole or in part at any time. These provisions generally include make-whole premiums. Refer to Note 18 of Notes to Consolidated Financial Statements in Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2021 for further discussion regarding the limitation of distributions from BHE's subsidiaries.

As of March 31, 2022, the Company's total net liquidity was as follows (in millions):

															BHE Pipeline
					MidAmerican		NV		Northern		BHE				Group and
	BHE		PacifiCorp		Funding		Energy		Powergrid		Canada		HomeServices		Other		Total
Cash and cash equivalents	$	163	$	335	$	132	$	40	$	75	$	60	$	363	$	264	$	1,432
Credit facilities	3,500		1,200		1,509		650		263		860		3,300		—		11,282
Less:
Short-term debt	(110)		—		—		(161)		—		(375)		(1,203)		—		(1,849)
Tax-exempt bond support and letters of credit	—		(218)		(370)		—		—		(1)		—		—		(589)
Net credit facilities	3,390		982		1,139		489		263		484		2,097		—		8,844
Total net liquidity(1)	$	3,553	$	1,317	$	1,271	$	529	$	338	$	544	$	2,460	$	264	$	10,276
Credit facilities:
Maturity dates	2024		2024		2022, 2024		2024		2024		2022, 2026		2022, 2023, 2026

(1)    Excludes $100 million of available liquidity under a delayed draw term loan at Nevada Power.

Operating Activities

Net cash flows from operating activities for the three-month periods ended March 31, 2022 and 2021 were $2.2 billion and $1.5 billion, respectively. The increase was primarily due to changes in working capital.

The timing of the Company's income tax cash flows from period to period can be significantly affected by the estimated federal income tax payment methods selected and assumptions made for each payment date.

Investing Activities

Net cash flows from investing activities for the three-month periods ended March 31, 2022 and 2021 were $(1.6) billion and $(1.4) billion, respectively. The change was primarily due to higher capital expenditures of $258 million. Refer to "Future Uses of Cash" for a discussion of capital expenditures.

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Financing Activities

Net cash flows from financing activities for the three-month period ended March 31, 2022 was $(310) million. Sources of cash totaled $405 million and consisted of proceeds from subsidiary debt issuances. Uses of cash totaled $715 million and consisted mainly of repayments of subsidiary debt totaling $193 million, net repayments of short-term debt totaling $165 million and distributions to noncontrolling interests of $117 million.

For a discussion of recent financing transactions, refer to Note 4 of Notes to Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.

Net cash flows from financing activities for the three-month period ended March 31, 2021 was $(191) million. Sources of cash totaled $409 million and consisted of net proceeds from short-term debt. Uses of cash totaled $600 million and consisted mainly of repayments of BHE senior debt totaling $450 million, distributions to noncontrolling interests of $115 million and repayments of subsidiary debt totaling $26 million.

Future Uses of Cash

The Company has available a variety of sources of liquidity and capital resources, both internal and external, including net cash flows from operating activities, public and private debt offerings, the issuance of commercial paper, the use of unsecured revolving credit facilities, the issuance of equity and other sources. These sources are expected to provide funds required for current operations, capital expenditures, acquisitions, investments, debt retirements and other capital requirements. The availability and terms under which BHE and each subsidiary has access to external financing depends on a variety of factors, including regulatory approvals, its credit ratings, investors' judgment of risk and conditions in the overall capital markets, including the condition of the utility industry and project finance markets, among other items.

Capital Expenditures

The Company has significant future capital requirements. Capital expenditure needs are reviewed regularly by management and may change significantly as a result of these reviews, which may consider, among other factors, impacts to customers' rates; changes in environmental and other rules and regulations; outcomes of regulatory proceedings; changes in income tax laws; general business conditions; load projections; system reliability standards; the cost and efficiency of construction labor, equipment and materials; commodity prices; and the cost and availability of capital.

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The Company's historical and forecast capital expenditures, each of which exclude amounts for non-cash equity AFUDC and other non-cash items, are as follows (in millions):

	Three-Month Periods				Annual
	Ended March 31,				Forecast
	2021		2022		2022
Capital expenditures by business:
PacifiCorp	$	439	$	374	$	2,359
MidAmerican Funding	298		459		2,013
NV Energy	167		272		1,282
Northern Powergrid	179		169		652
BHE Pipeline Group	102		205		1,243
BHE Transmission	77		47		191
BHE Renewables	18		19		184
HomeServices	8		12		60
BHE and Other(1)	7		(4)		13
Total	$	1,295	$	1,553	$	7,997

Capital expenditures by type:
Wind generation	$	97	$	155	$	990
Electric distribution	427		392		1,737
Electric transmission	157		258		1,820
Natural gas transmission and storage	85		103		982
Solar generation	4		51		220
Other	525		594		2,248
Total	$	1,295	$	1,553	$	7,997

(1)BHE and Other represents amounts related principally to other entities, including MidAmerican Energy Services, LLC, corporate functions and intersegment eliminations.

The Company's historical and forecast capital expenditures consisted mainly of the following:

•Wind generation includes both growth and operating expenditures. Growth expenditures include spending for the following:

◦Construction of wind-powered generating facilities at MidAmerican Energy totaling $3 million for the three-month period ended March 31, 2022. Planned spending for the construction of additional wind-powered generating facilities totals $142 million for the remainder of 2022.

◦Repowering of wind-powered generating facilities at MidAmerican Energy totaling $120 million and $24 million for the three-month periods ended March 31, 2022 and 2021, respectively. Planned spending for the repowering of wind-powered generating facilities totals $386 million for the remainder of 2022. MidAmerican Energy expects its repowered facilities to meet Internal Revenue Service guidelines for the re-establishment of PTCs for 10 years from the date the facilities are placed in-service. The rate at which PTCs are re-established for a facility depends upon the date construction begins. Of the 812 MWs of current repowering projects not in-service as of March 31, 2022, 511 MWs are currently expected to qualify for 80% of the PTCs available for 10 years following each facility's return to service and 301 MWs are expected to qualify for 60% of such credits.

◦Construction of wind-powered generating facilities at PacifiCorp totaling $3 million and $27 million for the three-month periods ended March 31, 2022 and 2021, respectively. Construction includes 516 MWs of new wind-powered generating facilities that were placed in-service in 2021. Planned spending for the construction of additional wind-powered generating facilities totals $109 million for the remainder of 2022. The energy production from the new wind-powered generating facilities placed in-service by the end of 2024 is expected to qualify for 60% of the federal PTCs available for 10 years once the equipment is placed in-service.

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◦Planned acquisition and repowering of two wind-powered generating facilities by PacifiCorp totaling $3 million and $1 million for the three-month periods ended March 31, 2022 and 2021, respectively. The repowered facilities are expected to be placed in-service in 2023 and 2024. Planned spending for acquiring and repowering generating facilities totals $18 million for the remainder of 2022.

◦Repowering of wind-powered generating facilities at BHE Renewables totaling $25 million for the three-month period ended March 31, 2022. Planned spending for repowering generating facilities totals $64 million for the remainder of 2022.

•Electric distribution includes both growth and operating expenditures. Growth expenditures include spending for new customer connections and enhancements to existing customer connections. Operating expenditures include spending for ongoing distribution systems infrastructure needed at the Utilities and Northern Powergrid, wildfire mitigation, storm damage restoration and repairs and investments in routine expenditures for distribution needed to serve existing and expected demand.

•Electric transmission includes both growth and operating expenditures. Growth expenditures include spending for the following:

◦PacifiCorp's transmission investment primarily reflects planned costs for the 416-mile, 500-kV high-voltage transmission line between the Aeolus substation near Medicine Bow in Wyoming and the Clover substation near Mona, Utah; the 59-mile, 230-kV high-voltage transmission line between the Windstar substation near Glenrock, Wyoming and the Aeolus substation; and the 290-mile, 500-kV high-voltage transmission line from the Longhorn substation near Boardman, Oregon to the Hemingway substation near Boise, Idaho. Expenditures for these segments totaled $95 million and $16 million for the three-month periods ended March 31, 2022 and 2021, respectively. Planned spending for these Energy Gateway Transmission segments to be placed in-service in 2024-2026 totals $814 million for the remainder of 2022.

◦Nevada Utilities' Greenlink Nevada transmission expansion program. In this project, the company has received approval from the PUCN to build a 350-mile, 525-kV transmission line, known as Greenlink West, connecting the Ft. Churchill substation to the Northwest substation to the Harry Allen substation; a 235-mile, 525-kV transmission line, known as Greenlink North, connecting the new Ft. Churchill substation to the Robinson Summit substation; a 46-mile, 345-kV transmission line from the new Ft. Churchill substation to the Mira Loma substations; and a 38-mile, 345-kV transmission line from the new Ft. Churchill substation to the Robinson Summit substations. Expenditures for the expansion program and other growth projects totaled $30 million and $19 million for the three-month periods ended March 31, 2022 and 2021, respectively. Planned spending for the expansion program estimated to be placed in-service in 2026-2028 and other growth projects totals $166 million for the remainder of 2022.

◦Operating expenditures include spending for system reinforcement, upgrades and replacements of facilities to maintain system reliability and investments in routine expenditures for transmission needed to serve existing and expected demand.

•Natural gas transmission and storage includes both growth and operating expenditures. Growth expenditures include, among other items, spending for the Northern Natural Gas Twin Cities Area Expansion and Spraberry Compression projects. Operating expenditures include, among other items, spending for asset modernization, pipeline integrity projects and natural gas transmission, storage and liquefied natural gas terminalling infrastructure needs to serve existing and expected demand.

•Solar generation includes growth expenditures, including spending for the following:

◦Construction of solar-powered generating facilities at MidAmerican Energy totaling 141 MWs of small- and utility-scale solar generation, with total spend of $44 million and $3 million for the three-month periods ended March 31, 2022 and 2021, respectively and planned spending of $96 million for the remainder of 2022.

◦Construction of a solar-powered generating facility at Nevada Power totaling $7 million for the three-month period ended March 31, 2022 and planned spending of $74 million for the remainder of 2022. Construction includes expenditures for a 150-MW solar photovoltaic facility with an additional 100 MWs of co-located battery storage that will be developed in Clark County, Nevada. Commercial operation is expected by the end of 2023.

•Other capital expenditures includes both growth and operating expenditures, including spending for routine expenditures for generation and other infrastructure needed to serve existing and expected demand, natural gas distribution, technology, and environmental spending relating to emissions control equipment and the management of coal combustion residuals.

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Other Renewable Investments

The Company has invested in projects sponsored by third parties, commonly referred to as tax equity investments. Under the terms of these tax equity investments, the Company has entered into equity capital contribution agreements with the project sponsors that require contributions. The Company has made no contributions for the three-month period ended March 31, 2022, and has commitments as of March 31, 2022, subject to satisfaction of certain specified conditions, to provide equity contributions of $356 million for the remainder of 2022 pursuant to these equity capital contribution agreements as the various projects achieve commercial operation. However, the Company expects to assign its rights and obligations under these equity capital contribution agreements, including any related funding commitments, to an entity affiliated through common ownership. Once a project achieves commercial operation, the Company enters into a partnership agreement with the project sponsor that directs and allocates the operating profits and tax benefits from the project.

Material Cash Requirements

As of March 31, 2022, there have been no material changes outside the normal course of business in material cash requirements from the information provided in Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2021 other than the recent financing transactions previously discussed.

Quad Cities Generating Station Operating Status

Constellation Energy Corp. ("Constellation Energy," previously Exelon Generation Company, LLC, which was a subsidiary of Exelon Corporation prior to February 1, 2022), the operator of Quad Cities Generating Station Units 1 and 2 ("Quad Cities Station") of which MidAmerican Energy has a 25% ownership interest, announced on June 2, 2016, its intention to shut down Quad Cities Station on June 1, 2018. In December 2016, Illinois passed legislation creating a zero emission standard, which went into effect June 1, 2017. The zero emission standard requires the Illinois Power Agency to purchase ZECs and recover the costs from certain ratepayers in Illinois, subject to certain limitations. The proceeds from the ZECs will provide Constellation Energy additional revenue through 2027 as an incentive for continued operation of Quad Cities Station. MidAmerican Energy will not receive additional revenue from the subsidy.

The PJM Interconnection, L.L.C. ("PJM") capacity market includes a Minimum Offer Price Rule ("MOPR"). If a generation resource is subjected to a MOPR, its offer price in the market is adjusted to effectively remove the revenues it receives through a state government-provided financial support program, resulting in a higher offer that may not clear the capacity market. Prior to December 19, 2019, the PJM MOPR applied only to certain new gas-fired resources. An expanded PJM MOPR to include existing resources would require exclusion of ZEC compensation when bidding into future capacity auctions, resulting in an increased risk of Quad Cities Station not receiving capacity revenues in future auctions.

On December 19, 2019, the FERC issued an order requiring the PJM to broadly apply the MOPR to all new and existing resources, including nuclear. This greatly expanded the breadth and scope of the PJM's MOPR, which became effective as of the PJM's capacity auction for the 2022-2023 planning year in May 2021. While the FERC included some limited exemptions, no exemptions were available to state-supported nuclear resources, such as Quad Cities Station. The FERC provided no new mechanism for accommodating state-supported resources other than the existing Fixed Resource Requirement ("FRR") mechanism under which an entire utility zone would be removed from PJM's capacity auction along with sufficient resources to support the load in such zone. In response to the FERC's order, the PJM submitted a compliance filing on March 18, 2020, wherein the PJM proposed tariff language reflecting the FERC's directives and a schedule for resuming capacity auctions. On April 16, 2020, the FERC issued an order largely denying requests for rehearing of the FERC's December 2019 order but granting a few clarifications that required an additional PJM compliance filing, which the PJM submitted on June 1, 2020. A number of parties, including Constellation Energy, have filed petitions for review of the FERC's orders in this proceeding, which remain pending before the D.C. Circuit.

As a result, the MOPR applied to Quad Cities Station in the capacity auction for the 2022-2023 planning year, which prevented Quad Cities Station from clearing in that capacity auction.

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At the direction of the PJM Board of Managers, the PJM and its stakeholders developed further MOPR reforms to ensure that the capacity market rules respect and accommodate state resource preferences such as the ZEC programs. The PJM filed related tariff revisions at the FERC on July 30, 2021, and, on September 29, 2021, the PJM's proposed MOPR reforms became effective by operation of law. Under the new tariff provisions, the MOPR will no longer apply to Quad Cities Station. Requests for rehearing of the FERC's notice establishing the effective date for the PJM's proposed market reforms were filed in October 2021 and denied by operation of law on November 4, 2021. Several parties have filed petitions for review of the FERC's orders in this proceeding, which remain pending before the Court of Appeals for the Third Circuit. Constellation Energy is strenuously opposing these appeals.

Assuming the continued effectiveness of the Illinois zero emission standard, Constellation Energy no longer considers Quad Cities Station to be at heightened risk for early retirement. However, to the extent the Illinois zero emission standard does not operate as expected over its full term, Quad Cities Station would be at heightened risk for early retirement. The FERC's December 19, 2019 order on the PJM MOPR may undermine the continued effectiveness of the Illinois zero emission standard unless the PJM adopts further changes to the MOPR or Illinois implements an FRR mechanism, under which Quad Cities Station would be removed from the PJM's capacity auction.

Regulatory Matters

BHE's regulated subsidiaries and certain affiliates are subject to comprehensive regulation. The discussion below contains material developments to those matters disclosed in Item 1 of each Registrant's Annual Report on Form 10-K for the year ended December 31, 2021 and new regulatory matters occurring in 2022.

PacifiCorp

Oregon

In March 2022, PacifiCorp filed a general rate case requesting an overall rate change of $82 million, or 6.6%, to become effective January 1, 2023. A hearing in the rate case will be held in September 2022 with an order expected in December 2022.

Washington

In June 2021, PacifiCorp filed a power cost only rate case to update baseline net power costs for 2022. The proposed $13 million, or 3.7%, rate increase has a requested effective date of January 1, 2022. In November 2021, PacifiCorp reached a proposed settlement with most of the parties, which includes an agreement to adjust the PTC rate in base rates and apply a production factor and to include a net power cost update as part of the compliance filing. A hearing was held in January 2022 and the WUTC issued an order approving the settlement in March 2022. A compliance filing, reflecting a $43 million, or 12.2%, increase was filed in April 2022 with rates effective May 1, 2022.

NV Energy (Nevada Power and Sierra Pacific)

Senate Bill 448 ("SB 448")

SB 448 was signed into law on June 10, 2021. The legislation is intended to accelerate transmission development, renewable energy and storage, and accelerate transportation electrification within the state of Nevada. In September 2021, the Nevada Utilities filed an amendment to the 2021 Joint IRP for the approval of their Transmission Infrastructure for a Clean Energy Economy Plan that sets forth a plan for the construction of high-voltage transmission infrastructure, Greenlink North among others, that will be placed into service no later than December 31, 2028, and requires the IRP to include at least one scenario that uses sources of supply that will achieve certain reductions in carbon dioxide emissions. In September 2021, the Nevada Utilities filed an application for the approval of their Economic Recovery Transportation Electrification Plan to accelerate transportation electrification in the state of Nevada. The plan establishes requirements for the contents of the transportation electrification investment as well as requirements for review, cost recovery and monitoring. The plan covers an initial period beginning January 1, 2022 and ending on December 31, 2024. In November 2021, the PUCN issued an order granting the application and accepting the Economic Recovery Transportation Electrification Plan with some modifications. The PUCN opened rulemakings to address other regulations that resulted from SB 448. In February 2022, the PUCN adopted regulations regarding the Economic Development Electric Rate Rider Program to revise the discounted electric rates to ease the economic burden on small businesses who take advantage of the discounted rates under the tariff. The remaining two SB 448 rulemakings are ongoing.

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ON Line Temporary Rider ("ONTR")

In October 2021, Sierra Pacific filed an application with the PUCN for approval of the ONTR with corresponding updates to its electric rate tariffs to authorize recovery of the One Nevada Transmission Line ("ON Line") regulatory asset being accumulated as a result of the ON Line cost reallocation as well as the related on-going reallocated revenue requirement. Sierra Pacific's application would have, if approved by the PUCN as filed, resulted in a one-time rate increase of $28 million to be collected over a nine-month period starting on April 1, 2022. In March 2022, the PUCN issued an order directing Sierra Pacific to recover $14 million of the ON Line regulatory asset as a one-time rate increase collectable over a nine-month period effective April 1, 2022, with the expected remaining balance at December 31, 2022 to be included in rate base in the 2022 regulatory rate review for inclusion in the rates set in that case.

Merger Application

In March 2022, the Nevada Utilities filed a joint application with the PUCN for authorization to merge Sierra Pacific with and into Nevada Power, with Nevada Power being the surviving entity. If approved by the PUCN as filed, Nevada Power will have two distinct electric service territories in northern and southern Nevada each with their own rates and one natural gas service territory in the Reno and Sparks area. An order is expected in 2022.

BHE Pipeline Group

BHE GT&S

In September 2021, EGTS filed a general rate case for its FERC-jurisdictional services, with proposed rates to be effective November 1, 2021. EGTS' previous general rate case was settled in 1998. EGTS proposed an annual cost-of-service of approximately $1.1 billion, and requested increases in various rates, including general system storage rates by 85% and general system transportation rates by 60%. In October 2021, the FERC issued an order that accepted the November 1, 2021 effective date for certain changes in rates, while suspending the other changes for five months following the proposed effective date, until April 1, 2022, subject to refund and the outcome of hearing procedures. This matter is pending.

BHE Transmission

AltaLink

2022-2023 General Tariff Application

In April 2021, AltaLink filed its 2022-2023 GTA delivering on the last two years of its commitment to keep rates flat for customers at or below the 2018 level of C$904 million for the five-year period from 2019 to 2023. The two-year application achieves flat tariffs by continuing to transition to the AUC-approved salvage recovery method and continuing the use of the flow-through income tax method, with an overall year-over-year increase of approximately 2% in 2022 and 2023 revenue requirements. In addition, similar to the refund of previously collected accumulated depreciation surplus approved by the AUC for 2021, AltaLink proposed to provide further tariff reductions over the two years by refunding an additional C$60 million per year. The application requested the approval of transmission tariffs of C$824 million and C$847 million for 2022 and 2023, respectively.

In September 2021, AltaLink provided responses to information requests from the AUC and filed an amended application to reflect certain adjustments and forecast updates. The amended application requested the approval of transmission tariffs of C$820 million and C$843 million for 2022 and 2023, respectively. In November 2021, the AUC approved the 2022 interim refundable transmission tariff at C$57 million per month effective January 2022.

In January 2022, the AUC issued its decision with respect to AltaLink's 2022-2023 GTA. The AUC approved a two-year total revenue requirement of C$1.7 billion as compared to AltaLink's requested revenue requirement of C$1.8 billion. AltaLink's 2022-2023 GTA reflected its continued commitment to provide rate stability to customers by maintaining flat tariffs and providing additional tariff relief measures, including a proposed tariff refund of C$60 million of accumulated depreciation in each of 2022 and 2023. The AUC did not approve AltaLink's proposed refund due to an anticipated improvement in general economic conditions in Alberta.

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In March 2022, AltaLink filed a review and variance application with the AUC. The application requested the AUC to review and vary its decision to deny AltaLink's proposed C$120 million refund of accumulated depreciation surplus, given material changes in circumstances since the decision was issued in January 2022. The existing pressures on Albertans and Alberta businesses that resulted from the COVID-19 pandemic have been compounded by cost increases due to higher inflation and global supply chain disruptions.

2023 Generic Cost of Capital Proceeding

In January 2022, the AUC initiated the 2023 generic cost of capital proceeding. The proceeding will be conducted in two stages. The first stage will determine the cost of capital parameters for 2023 and the second stage will consider returning to a formula-based approach to establish cost of capital adjustments, commencing in 2024. In March 2022, the AUC issued its decision with respect to the first stage of the 2023 GCOC proceeding by approving the extension of the 2022 return on equity of 8.5% and deemed equity ratio of 37% for 2023, recognizing lingering uncertainty and continued volatility of financial markets due to the COVID-19 pandemic. With respect to the second stage, the AUC plans to commence the 2024 GCOC proceeding to establish a formula-based approach in the third quarter of 2022 and to conclude in the second quarter of 2023.

Environmental Laws and Regulations

Each Registrant is subject to federal, state, local and foreign laws and regulations regarding climate change, RPS, air and water quality, emissions performance standards, coal combustion byproduct disposal, hazardous and solid waste disposal, protected species and other environmental matters that have the potential to impact each Registrant's current and future operations. In addition to imposing continuing compliance obligations, these laws and regulations provide regulators with the authority to levy substantial penalties for noncompliance, including fines, injunctive relief and other sanctions. These laws and regulations are administered by various federal, state, local and international agencies. Each Registrant believes it is in material compliance with all applicable laws and regulations, although many are subject to interpretation that may ultimately be resolved by the courts. The discussion below contains material developments to those matters disclosed in Item 1 of each Registrant's Annual Report on Form 10-K for the year ended December 31, 2021, and new environmental matters occurring in 2022.

Clean Air Act Regulations

The Clean Air Act is a federal law administered by the EPA that provides a framework for protecting and improving the nation's air quality and controlling sources of air emissions. The implementation of new standards is generally outlined in SIPs, which are a collection of regulations, programs and policies to be followed. SIPs vary by state and are subject to public hearings and EPA approval. Some states may adopt additional or more stringent requirements than those implemented by the EPA. The major Clean Air Act programs most directly affecting the Registrants' operations are described below.

National Ambient Air Quality Standards

Under the authority of the Clean Air Act, the EPA sets minimum NAAQS for six principal pollutants, consisting of carbon monoxide, lead, NOx, particulate matter, ozone and SO2, considered harmful to public health and the environment. Areas that achieve the standards, as determined by ambient air quality monitoring, are characterized as being in attainment, while those that fail to meet the standards are designated as being nonattainment areas. Generally, sources of emissions in a nonattainment area that are determined to contribute to the nonattainment are required to reduce emissions. Currently, with the exceptions described in the following paragraphs, air quality monitoring data indicates that all counties where the relevant Registrant's major emission sources are located are in attainment of the current NAAQS.

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On June 4, 2018, the EPA published final ozone designations for much of the U.S. Relevant to the Registrants, these designations include classifying Yuma County, Arizona; Clark County, Nevada; and the Northern Wasatch Front, Southern Wasatch Front and Duchesne and Uintah counties in Utah as nonattainment-marginal with the 2015 ozone standard. These areas were required to meet the 2015 standard three years from the August 3, 2018, effective date. All other areas relevant to the Registrants were designated attainment/unclassifiable with this same action. However, on January 29, 2021, the D.C. Circuit vacated several provisions of the 2018 implementing rules for the 2015 ozone standards for contravening the Clean Air Act. The EPA and environmental groups finalized a consent decree in January 2022 that sets deadlines for the agency to approve or disapprove the "good neighbor" provisions of interstate ozone plans of dozens of states. Relevant to the Registrants, the EPA must, by April 30, 2022, propose to approve or disapprove the interstate ozone SIPs of Alabama, Iowa, Maryland, Michigan, Minnesota, New York, Ohio, Pennsylvania, Texas, West Virginia and Wisconsin. On February 22, 2022, the EPA published a series of proposed decisions to disapprove the SIPs for interstate ozone transport of 19 states. Relevant to the Registrants, these states include Alabama, Maryland, Michigan, Minnesota, New York, Ohio, West Virginia and Wisconsin. The EPA also proposed to approve Iowa's SIP after re-analyzing the state's data. The EPA must finalize the proposed rules by December 15, 2022. In addition, the EPA must, by December 15, 2022, approve or disapprove the interstate plans of Arizona, California, Nevada and Wyoming. On April 15, 2022, the EPA issued its final rule approving Iowa's SIP as meeting the good neighbor provisions for the 2015 ozone standard. Until the EPA takes final action consistent with this decree, additional impacts to the relevant Registrants cannot be determined.

Separately, on March 28, 2022, the EPA proposed determinations as to whether certain areas have achieved levels of ground-level ozone pollution that meet the 2008 and 2015 ozone NAAQS, respectively. Relevant to the Registrants, the Southern Wasatch Front in Utah and Yuma, Arizona are proposed to have met the 2015 ozone standard; and the Cincinnati area of Ohio and Kentucky and the Northern Wasatch Front in Utah are proposed to have not met the 2015 ozone, will be reclassified as Moderate Non-Attainment, and will have until August 3, 2024 to meet the standard. Until the EPA takes final action on the proposal and the affected states submit any required SIPs, the relevant Registrants cannot determine the impacts of the proposed rule.

Cross-State Air Pollution Rule

The EPA promulgated an initial rule in March 2005 to reduce emissions of NOx and SO2, precursors of ozone and particulate matter, from down-wind sources in the eastern U.S., including Iowa, to reduce emissions by implementing a plan based on a market-based cap-and-trade system, emissions reductions, or both. After numerous appeals, the CSAPR was promulgated to address interstate transport of SO2 and NOx emissions in 27 eastern and Midwestern states.

The first phase of the rule was implemented January 1, 2015. In November 2015, the EPA released a proposed rule that would further reduce NOx emissions in 2017. The final "CSAPR Update Rule" was published in the Federal Register in October 2016 and required additional reductions in NOx emissions beginning in May 2017. On December 6, 2018, the EPA finalized a rule to close out the CSAPR, having determined that the CSAPR Update Rule for the 2008 ozone NAAQS fully addressed Clean Air Act interstate transport obligations of 20 eastern states. The EPA determined that 2023 is an appropriate future analytic year to evaluate remaining good neighbor obligations and that there will be no remaining nonattainment or maintenance receptors with respect to the 2008 ozone NAAQS in the eastern U.S. in that year. Accordingly, the 20 CSAPR Update-affected states would not contribute significantly to nonattainment in, or interfere with maintenance of, any other state with regard to the 2008 ozone NAAQS. Both the CSAPR Update and the CSAPR Close-Out rules were challenged in the D.C. Circuit. The D.C. Circuit ruled September 13, 2019, that because the EPA allowed upwind States to continue to significantly contribute to downwind air quality problems beyond statutory deadlines, the CSAPR Update Rule provided only a partial remedy that did not fully address interstate ozone transport, and remanded the CSAPR Update Rule back to the EPA. The D.C. Circuit issued an opinion October 1, 2019, finding that because the CSAPR Close-Out Rule relied on the same faulty reasoning as the CSAPR Update Rule, the CSAPR Close-Out Rule must be vacated. On October 15, 2020, the EPA proposed to tighten caps on emissions of NOx from generating facilities in 12 states in the CSAPR trading program in response to the D.C. Circuit's decision to vacate the CSAPR Update Rule. The rule is intended to fully resolve 21 upwind states' remaining good neighbor obligations under the 2008 ozone NAAQS. Additional emissions reductions are required at generating facilities in 12 states, including Illinois; the EPA predicts that emissions from the remaining nine states, including Iowa and Texas, will not significantly contribute to downwind states' ability to attain or maintain the ozone standard. The EPA accepted comment on the proposal through December 15, 2020. On March 15, 2021, the EPA finalized the Revised CSAPR Update Rule largely as proposed. Significant new compliance obligations are not anticipated as a result of the rule. In June 2021, a new lawsuit was filed that challenges the Revised CSAPR Update Rule. Litigation is ongoing in the D.C. Circuit Court. Until litigation is exhausted, the relevant Registrants cannot determine whether additional action may be required.

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In March 2022, the EPA released its Good Neighbor Rule, which contains proposed revisions to the CSAPR framework and is intended to address ozone transport for the 2015 ozone NAAQS. The rule focuses on reductions of NOx, precursors to ozone formation and covers 26 states. Relevant to the Registrants, four states are included in the cross-state program for the first time - California, Nevada, Utah and Wyoming. Iowa is not included in the proposal. In a separate but related action in February 2022, the EPA proposed to approve the good neighbor provisions of Iowa's SIP addressing ozone transport and the 2015 ozone standard. The EPA proposes to retain emissions allowance trading for generating facilities. Beginning in 2023, emissions budgets would be set at the level of reductions achievable through immediately available measures such as consistently operating existing emissions controls. Starting in 2026, emissions budgets would be set at levels achievable by the installation of SCR controls at certain generating facilities. The proposal also includes additional industries beyond the power sector for the first time, with a focus on the top NOx emitting stationary source categories. These include natural gas pipeline compressor stations, pulp and paper mills, cement production, iron and steel boilers and furnaces, glass furnaces, chemical manufacturing and petroleum and coal product manufacturing. These sources will not have access to trading and will instead be subject to rate-based limits that are assigned for each source category. The EPA is accepting comments on the proposal through June 6, 2022. Until the EPA takes final action consistent with this decree, impacts to the relevant Registrants cannot be determined.

Regional Haze

The EPA's Regional Haze Rule, finalized in 1999, requires states to develop and implement plans to improve visibility in designated federally protected areas ("Class I areas"). Some of PacifiCorp's coal-fueled generating facilities in Utah, Wyoming, Arizona and Colorado and certain of Nevada Power's and Sierra Pacific's fossil-fueled generating facilities are subject to the Clean Air Visibility Rules. In accordance with the federal requirements, states are required to submit SIPs that address emissions from sources subject to BART requirements and demonstrate progress towards achieving natural visibility requirements in Class I areas by 2064.

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The state of Utah issued a regional haze SIP requiring the installation of SO2, NOx and particulate matter controls on Hunter Units 1 and 2 and Huntington Units 1 and 2. In December 2012, the EPA approved the SO2 portion of the Utah regional haze SIP and disapproved the NOx and particulate matter portions. Subsequently, the Utah Division of Air Quality completed an alternative BART analysis for Hunter Units 1 and 2 and Huntington Units 1 and 2. In January 2016, the EPA published two alternative proposals to either approve the Utah SIP as written or reject the Utah SIP relating to NOx controls and require the installation of SCR equipment at Hunter Units 1 and 2 and Huntington Units 1 and 2 within five years. The EPA's final action on the Utah regional haze SIP was effective August 4, 2016. The EPA approved in part and disapproved in part the Utah regional haze SIP and issued a FIP requiring the installation of SCR equipment at Hunter Units 1 and 2 and Huntington Units 1 and 2 within five years of the effective date of the rule. PacifiCorp and other parties filed requests with the EPA to reconsider and stay that decision, as well as filed motions for stay and petitions for review with the Tenth Circuit Court of Appeals ("Tenth Circuit") asking the court to overturn the EPA's actions. In July 2017, the EPA issued a letter indicating it would reconsider its FIP decision. In light of the EPA's grant of reconsideration and the EPA's position in the litigation, the Tenth Circuit held the litigation in abeyance and imposed a stay of the compliance obligations of the FIP for the number of days the stay is in effect while the EPA conducts its reconsideration process. To support the reconsideration, PacifiCorp undertook additional air quality modeling using the Comprehensive Air Quality Model with Extensions dispersion model. On January 14, 2019, the state of Utah submitted a SIP revision to the EPA, which includes the updated modeling information and additional analysis. On June 24, 2019, the Utah Air Quality Board unanimously voted to approve the Utah regional haze SIP revision, which incorporates a BART alternative into Utah's regional haze SIP. The BART alternative makes the shutdown of PacifiCorp's Carbon generating facility enforceable under the SIP and removes the requirement to install SCR equipment on Hunter Units 1 and 2 and Huntington Units 1 and 2. The Utah Division of Air Quality submitted the SIP revision to the EPA for approval at the end of 2019. In January 2020, the EPA published its proposed approval of the Utah Regional Haze SIP Alternative, which makes the shutdown of the Carbon generating facility federally enforceable and adopts as BART the existing NOx controls and emission limits on the Hunter and Huntington generating facilities. The proposed approval withdraws the FIP requirements to install SCR equipment on Hunter Units 1 and 2 and Huntington Units 1 and 2. The EPA released the final rule approving the Utah Regional Haze SIP Alternative on October 28, 2020. With the approval, the EPA also finalized its withdrawal of the FIP requirements for the Hunter and Huntington generating facilities. The Utah Regional Haze SIP Alternative took effect December 28, 2020. As a result of these actions, the Tenth Circuit dismissed the Utah regional haze petitions on January 11, 2021. On January 19, 2021, Heal Utah, National Parks Conservation Association, Sierra Club and Utah Physicians for a Healthy Environment filed a petition for review of the Utah Regional Haze SIP Alternative in the Tenth Circuit. PacifiCorp and the state of Utah moved to intervene in the litigation. After review of the rule by the Biden administration, the EPA determined it would defend the rule, and briefing in the case is ongoing. A date for oral arguments has not been scheduled. The Utah Air Quality Board approved the Utah Division of Air Quality's SIP for the regional haze second planning period on April 6, 2022. The public comment period is anticipated to begin in early May 2022. The proposed plan sets mass-based emissions limits for PacifiCorp's Hunter and Huntington generating facilities to ensure reasonable visibility progress for the second planning period. The division proposes to add existing SO2 emission limits for all five Hunter and Huntington units as enforceable regional haze controls. The division also proposes new enforceable mass-based NOx emission limits for both generating facilities based on actual emissions. The state is on track to submit a final implementation plan to the EPA by July 2022.

42

The state of Wyoming issued two regional haze SIPs requiring the installation of SO2, NOx and particulate matter controls on certain PacifiCorp coal-fueled generating facilities in Wyoming. The EPA approved the SO2 SIP in December 2012 and the EPA's approval was upheld on appeal by the Tenth Circuit in October 2014. In addition, the EPA initially proposed in June 2012 to disapprove portions of the NOx and particulate matter SIP and instead issue a FIP. The EPA withdrew its initial proposed actions on the NOx and particulate matter SIP and the proposed FIP, published a re-proposed rule in June 2013, and finalized its determination in January 2014, which aligns more closely with the SIP proposed by the state of Wyoming. The EPA's final action on the Wyoming SIP approved the state's plan to have PacifiCorp install low-NOx burners at Naughton Units 1 and 2, SCR controls at Naughton Unit 3 by December 2014, SCR controls at Jim Bridger Units 1 through 4 between 2015 and 2022, and low-NOx burners at Dave Johnston Unit 4. The EPA disapproved a portion of the Wyoming SIP and issued a FIP for Dave Johnston Unit 3, where it required the installation of SCR controls by 2019 or, in lieu of installing SCR controls, a commitment to shut down Dave Johnston Unit 3 by 2027, its currently approved depreciable life. The EPA also disapproved a portion of the Wyoming SIP and issued a FIP for the Wyodak coal-fueled generating facility, requiring the installation of SCR controls within five years (i.e., by 2019). The EPA action became final on March 3, 2014. PacifiCorp filed an appeal of the EPA's final action on Wyodak in March 2014. The state of Wyoming also filed an appeal of the EPA's final action, as did the Powder River Basin Resource Council, National Parks Conservation Association and Sierra Club. In September 2014, the Tenth Circuit issued a stay of the March 2019 compliance deadline for Wyodak, pending further action by the Tenth Circuit in the appeal. The EPA, U.S. Department of Justice, state of Wyoming and PacifiCorp executed a settlement agreement December 16, 2020, removing the requirement to install SCR in lieu of monthly and annual NOx emissions limits. The settlement agreement was subject to a comment period which ended July 6, 2021. Litigation in the Tenth Circuit remains stayed pending finalization of the settlement agreement. The EPA did not proceed with final approval of the settlement agreement for Wyodak and is currently engaged with Wyoming and PacifiCorp concerning alternative paths for resolution. On February 5, 2019, PacifiCorp submitted a reasonable progress reassessment permit application and reasonable progress determination for Jim Bridger Units 1 and 2, seeking a rescission of the December 2017 permit requiring the installation of SCR, to be replaced with a permit imposing plant-wide emission limits to achieve better modeled visibility, fewer overall environmental impacts and lower costs of compliance. In May 2020, the Wyoming Air Quality Division issued a permit approving PacifiCorp's monthly and annual NOx and SO2 emission limits on the four Jim Bridger units and submitted a regional haze SIP revision to the EPA. The revised SIP would grant approval of PacifiCorp's Jim Bridger reasonable progress reassessment application and incorporates PacifiCorp's proposed emission limits in lieu of the requirement to install SCR systems on Jim Bridger Units 1 and 2. On December 27, 2021, Wyoming's governor issued an emergency suspension order under Section 110(g) of the Clean Air Act, allowing the operation of Jim Bridger Unit 2 through April 30, 2022, while the state, the EPA and PacifiCorp continue settlement discussions. On January 18, 2022, the EPA proposed to reject the SIP revisions. The EPA took comment on the proposal through February 17, 2022. On February 14, 2022, the First Judicial District Court for the State of Wyoming entered a consent decree reached between the state of Wyoming and PacifiCorp under Sections 201 and 209(a) of the Wyoming Environmental Quality Act, resolving claims of threatened violations of the Clean Air Act, the Wyoming Environmental Quality Act and the Wyoming Air Quality Standards and Regulations at the Jim Bridger facility. No penalties were imposed under the consent decree. Consistent with the terms and conditions of the consent decree and as forecasted in PacifiCorp's 2021 IRP, PacifiCorp must convert both units to natural gas and begin meeting emissions limits consistent with that conversion by January 1, 2024. In addition, PacifiCorp must propose an RFP by January 1, 2023, for carbon capture technology at Jim Bridger Units 3 and 4. Wyoming issued its proposed implementation plan for second planning period reasonable progress on February 18, 2022 and accepted comments through March 23, 2022. Wyoming determined that no controls will be necessary on any Wyoming resources to make reasonable progress for the second round of regional haze planning. It is estimated that the state will submit a final state-approved implementation plan to the EPA in May 2022.

In February 2022, NV Energy received 30-day notice letters from the Nevada Division of Environmental Protection regarding the reopening and revision of the Valmy and Tracy Generating Station's Title V air quality operating permits to add federally enforceable retirement dates of December 31, 2028 for Valmy Units 1 and 2 and December 31, 2031 for Tracy Unit 4. The enforceable retirement dates will implement Nevada's SIP for the regional haze second planning period. The revised permits were received in March and April 2022. It is anticipated that the Nevada Division of Environmental Protection will begin the public comment period for its SIP by May 2022 and submit the final SIP to the EPA by June 2022.

43

Critical Accounting Estimates

Certain accounting measurements require management to make estimates and judgments concerning transactions that will be settled several years in the future. Amounts recognized on the Consolidated Financial Statements based on such estimates involve numerous assumptions subject to varying and potentially significant degrees of judgment and uncertainty and will likely change in the future as additional information becomes available. Estimates are used for, but not limited to, the accounting for the effects of certain types of regulation, impairment of goodwill and long-lived assets, pension and other postretirement benefits, income taxes and revenue recognition - unbilled revenue. For additional discussion of the Company's critical accounting estimates, see Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2021. There have been no significant changes in the Company's assumptions regarding critical accounting estimates since December 31, 2021.

44

PacifiCorp and its subsidiaries

Consolidated Financial Section

45

PART I

Item 1.Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

PacifiCorp

Results of Review of Interim Financial Information

We have reviewed the accompanying consolidated balance sheet of PacifiCorp and subsidiaries ("PacifiCorp") as of March 31, 2022, the related consolidated statements of operations, changes in shareholders' equity, and cash flows for the three-month periods ended March 31, 2022 and 2021, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of PacifiCorp as of December 31, 2021, and the related consolidated statements of operations, comprehensive income, changes in shareholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated February 25, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of PacifiCorp's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to PacifiCorp in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Deloitte & Touche LLP

Portland, Oregon

April 29, 2022

46

PACIFICORP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Amounts in millions)

	As of
	March 31,		December 31,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	335	$	179
Trade receivables, net	674		725
Other receivables, net	49		52
Inventories	479		474
Derivative contracts	145		76
Regulatory assets	125		65
Other current assets	163		150
Total current assets	1,970		1,721
Property, plant and equipment, net	23,081		22,914
Regulatory assets	1,231		1,287
Other assets	562		534
Total assets	$	26,844	$	26,456

The accompanying notes are an integral part of these consolidated financial statements.

47

PACIFICORP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited) (continued)

(Amounts in millions)

	As of
	March 31,		December 31,
	2022		2021
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	724	$	680
Accrued interest	115		121
Accrued property, income and other taxes	113		78
Accrued employee expenses	109		89
Current portion of long-term debt	155		155
Regulatory liabilities	114		118
Other current liabilities	196		219
Total current liabilities	1,526		1,460
Long-term debt	8,567		8,575
Regulatory liabilities	2,807		2,650
Deferred income taxes	2,886		2,847
Other long-term liabilities	1,014		1,011
Total liabilities	16,800		16,543
Commitments and contingencies (Note 8)
Shareholders' equity:
Preferred stock	2		2
Common stock - 750 shares authorized, no par value, 357 shares issued and outstanding	—		—
Additional paid-in capital	4,479		4,479
Retained earnings	5,579		5,449
Accumulated other comprehensive loss, net	(16)		(17)
Total shareholders' equity	10,044		9,913
Total liabilities and shareholders' equity	$	26,844	$	26,456

The accompanying notes are an integral part of these consolidated financial statements.

48

PACIFICORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Amounts in millions)

	Three-Month Periods
	Ended March 31,
	2022		2021
Operating revenue	$	1,297	$	1,242
Operating expenses:
Cost of fuel and energy	465		424
Operations and maintenance	277		259
Depreciation and amortization	280		264
Property and other taxes	59		61
Total operating expenses	1,081		1,008
Operating income	216		234
Other income (expense):
Interest expense	(106)		(107)
Allowance for borrowed funds	6		6
Allowance for equity funds	13		13
Interest and dividend income	7		6
Other, net	(4)		6
Total other income (expense)	(84)		(76)
Income before income tax expense (benefit)	132		158
Income tax expense (benefit)	2		(11)
Net income	$	130	$	169

The accompanying notes are an integral part of these consolidated financial statements.

49

PACIFICORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)

(Amounts in millions)

									Accumulated
					Additional				Other		Total
	Preferred		Common		Paid-in		Retained		Comprehensive		Shareholders'
	Stock		Stock		Capital		Earnings		Loss, Net		Equity
Balance, December 31, 2020	$	2	$	—	$	4,479	$	4,711	$	(19)	$	9,173
Net income	—		—		—		169		—		169
Balance, March 31, 2021	$	2	$	—	$	4,479	$	4,880	$	(19)	$	9,342
Balance, December 31, 2021	$	2	$	—	$	4,479	$	5,449	$	(17)	$	9,913
Net income	—		—		—		130		—		130
Other comprehensive income	—		—		—		—		1		1
Balance, March 31, 2022	$	2	$	—	$	4,479	$	5,579	$	(16)	$	10,044

The accompanying notes are an integral part of these consolidated financial statements.

50

PACIFICORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Amounts in millions)

	Three-Month Periods
	Ended March 31,
	2022		2021
Cash flows from operating activities:
Net income	$	130	$	169
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	280		264
Allowance for equity funds	(13)		(13)
Changes in regulatory assets and liabilities	(9)		(4)
Deferred income taxes and amortization of investment tax credits	19		13
Other, net	4		(2)
Changes in other operating assets and liabilities:
Trade receivables, other receivables and other assets	59		61
Inventories	(5)		7
Derivative collateral, net	22		7
Prepaid expenses	—		6
Accrued property, income and other taxes, net	15		12
Accounts payable and other liabilities	35		(51)
Net cash flows from operating activities	537		469
Cash flows from investing activities:
Capital expenditures	(374)		(439)
Other, net	3		(1)
Net cash flows from investing activities	(371)		(440)
Cash flows from financing activities:
Repayments of long-term debt	(9)		—
Net proceeds from short-term debt	—		2
Other, net	(2)		(1)
Net cash flows from financing activities	(11)		1
Net change in cash and cash equivalents and restricted cash and cash equivalents	155		30
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period	186		19
Cash and cash equivalents and restricted cash and cash equivalents at end of period	$	341	$	49

The accompanying notes are an integral part of these consolidated financial statements.

51

PACIFICORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1)    General

PacifiCorp, which includes PacifiCorp and its subsidiaries, is a U.S. regulated electric utility company serving retail customers, including residential, commercial, industrial, irrigation and other customers in portions of Utah, Oregon, Wyoming, Washington, Idaho and California. PacifiCorp owns, or has interests in, a number of thermal, hydroelectric, wind-powered and geothermal generating facilities, as well as electric transmission and distribution assets. PacifiCorp also buys and sells electricity on the wholesale market with other utilities, energy marketing companies, financial institutions and other market participants. PacifiCorp is subject to comprehensive state and federal regulation. PacifiCorp's subsidiaries support its electric utility operations by providing coal mining services. PacifiCorp is an indirect subsidiary of Berkshire Hathaway Energy Company ("BHE"), a holding company based in Des Moines, Iowa that owns subsidiaries principally engaged in energy businesses. BHE is a consolidated subsidiary of Berkshire Hathaway Inc. ("Berkshire Hathaway").

The unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and the United States Securities and Exchange Commission's rules and regulations for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures required by GAAP for annual financial statements. Management believes the unaudited Consolidated Financial Statements contain all adjustments (consisting only of normal recurring adjustments) considered necessary for the fair presentation of the unaudited Consolidated Financial Statements as of March 31, 2022 and for the three-month periods ended March 31, 2022 and 2021. The Consolidated Statements of Comprehensive Income have been omitted as net income materially equals comprehensive income for the three-month periods ended March 31, 2022 and 2021. The results of operations for the three-month periods ended March 31, 2022 and 2021 are not necessarily indicative of the results to be expected for the full year.

The preparation of the unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited Consolidated Financial Statements and the reported amounts of revenue and expenses during the period. Actual results may differ from the estimates used in preparing the unaudited Consolidated Financial Statements. Note 2 of Notes to Consolidated Financial Statements included in PacifiCorp's Annual Report on Form 10-K for the year ended December 31, 2021 describes the most significant accounting policies used in the preparation of the unaudited Consolidated Financial Statements. There have been no significant changes in PacifiCorp's assumptions regarding significant accounting estimates and policies during the three-month period ended March 31, 2022.

(2)    Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

Cash equivalents consist of funds invested in money market mutual funds, U.S. Treasury Bills and other investments with a maturity of three months or less when purchased. Cash and cash equivalents exclude amounts where availability is restricted by legal requirements, loan agreements or other contractual provisions. Restricted cash and cash equivalents consist substantially of funds representing vendor retention, custodial and nuclear decommissioning funds. Restricted amounts are included in other current assets and other assets on the Consolidated Balance Sheets. A reconciliation of cash and cash equivalents and restricted cash and cash equivalents as presented in the Consolidated Statements of Cash Flows is outlined below and disaggregated by the line items in which they appear on the Consolidated Balance Sheets (in millions):

	As of
	March 31,		December 31,
	2022		2021
Cash and cash equivalents	$	335	$	179
Restricted cash and cash equivalents included in other current assets	4		4
Restricted cash included in other assets	2		3
Total cash and cash equivalents and restricted cash and cash equivalents	$	341	$	186

52

(3)    Property, Plant and Equipment, Net

Property, plant and equipment, net consists of the following (in millions):

		As of
		March 31,		December 31,
	Depreciable Life	2022		2021
Utility Plant:
Generation	15 - 59 years	$	13,688	$	13,679
Transmission	60 - 90 years	7,914		7,894
Distribution	20 - 75 years	8,125		8,044
Intangible plant(1)	5 - 75 years	1,112		1,106
Other	5 - 60 years	1,563		1,539
Utility plant in-service		32,402		32,262
Accumulated depreciation and amortization		(10,704)		(10,507)
Utility plant in-service, net		21,698		21,755
Other non-regulated, net of accumulated depreciation and amortization	14 - 95 years	18		18
Plant, net		21,716		21,773
Construction work-in-progress		1,365		1,141
Property, plant and equipment, net		$	23,081	$	22,914

(1)Computer software costs included in intangible plant are initially assigned a depreciable life of 5 to 10 years.

(4)    Income Taxes

A reconciliation of the federal statutory income tax rate to the effective income tax rate applicable to income before income tax (benefit) expense is as follows:

	Three-Month Periods
	Ended March 31,
	2022		2021
Federal statutory income tax rate	21	%	21	%
State income tax, net of federal income tax benefit	3		3
Federal income tax credits	(20)		(20)
Effects of ratemaking(1)	(11)		(13)
Valuation allowance	6		—
Other	3		2
Effective income tax rate	2	%	(7)	%

(1)Effects of ratemaking is primarily attributable to activity associated with excess deferred income taxes.

Income tax credits relate primarily to production tax credits ("PTCs") earned by PacifiCorp's wind-powered generating facilities. Federal renewable electricity PTCs are earned as energy from qualifying wind-powered generating facilities is produced and sold and are based on a per-kilowatt hour rate pursuant to the applicable federal income tax law. Wind-powered generating facilities are eligible for the credits for 10 years from the date the qualifying generating facilities are placed in-service. PTCs for the three-month periods ended March 31, 2022 and 2021 totaled $26 million and $31 million, respectively.

For the three-month period ended March 31, 2022 PacifiCorp recorded a valuation allowance related to state net operating loss carryforwards.

53

(5)    Employee Benefit Plans

Net periodic benefit cost (credit) for the pension and other postretirement benefit plans included the following components (in millions):

	Three-Month Periods
	Ended March 31,
	2022		2021
Pension:
Service cost	$	—	$	—
Interest cost	7		7
Expected return on plan assets	(10)		(13)
Net amortization	4		5
Net periodic benefit cost (credit)	$	1	$	(1)
Other postretirement:
Service cost	$	—	$	—
Interest cost	2		2
Expected return on plan assets	(2)		(2)
Net amortization	—		—
Net periodic benefit cost (credit)	$	—	$	—

Amounts other than the service cost for pension and other postretirement benefit plans are recorded in Other, net in the Consolidated Statements of Operations. Employer contributions to the pension and other postretirement benefit plans are expected to be $4 million and $— million, respectively, during 2022. As of March 31, 2022, $1 million of contributions had been made to the pension plans.

(6)    Risk Management and Hedging Activities

PacifiCorp is exposed to the impact of market fluctuations in commodity prices and interest rates. PacifiCorp is principally exposed to electricity, natural gas, coal and fuel oil commodity price risk as it has an obligation to serve retail customer load in its service territories. PacifiCorp's load and generating facilities represent substantial underlying commodity positions. Exposures to commodity prices consist mainly of variations in the price of fuel required to generate electricity and wholesale electricity that is purchased and sold. Commodity prices are subject to wide price swings as supply and demand are impacted by, among many other unpredictable items, weather, market liquidity, generating facility availability, customer usage, storage, and transmission and transportation constraints. Interest rate risk exists on variable-rate debt and future debt issuances. PacifiCorp does not engage in a material amount of proprietary trading activities.

PacifiCorp has established a risk management process that is designed to identify, assess, manage and report on each of the various types of risk involved in its business. To mitigate a portion of its commodity price risk, PacifiCorp uses commodity derivative contracts, which may include forwards, futures, options, swaps and other agreements, to effectively secure future supply or sell future production generally at fixed prices. PacifiCorp manages its interest rate risk by limiting its exposure to variable interest rates primarily through the issuance of fixed-rate long-term debt and by monitoring market changes in interest rates. Additionally, PacifiCorp may from time to time enter into interest rate derivative contracts, such as interest rate swaps or locks, to mitigate PacifiCorp's exposure to interest rate risk. No interest rate derivatives were in place during the periods presented. PacifiCorp does not hedge all of its commodity price and interest rate risks, thereby exposing the unhedged portion to changes in market prices.

There have been no significant changes in PacifiCorp's accounting policies related to derivatives. Refer to Note 7 for additional information on derivative contracts.

54

The following table, which reflects master netting arrangements and excludes contracts that have been designated as normal under the normal purchases or normal sales exception afforded by GAAP, summarizes the fair value of PacifiCorp's derivative contracts, on a gross basis, and reconciles those amounts to the amounts presented on a net basis on the Consolidated Balance Sheets (in millions):

	Derivative
	Contracts -				Other		Other
	Current		Other		Current		Long-term
	Assets		Assets		Liabilities		Liabilities		Total
As of March 31, 2022
Not designated as hedging contracts(1):
Commodity assets	$	165	$	37	$	6	$	(1)	$	207
Commodity liabilities	(3)		—		(9)		—		(12)
Total	162		37		(3)		(1)		195
Total derivatives	162		37		(3)		(1)		195
Cash collateral payable	(17)		—		—		—		(17)
Total derivatives - net basis	$	145	$	37	$	(3)	$	(1)	$	178
As of December 31, 2021
Not designated as hedging contracts(1):
Commodity assets	$	81	$	21	$	2	$	—	$	104
Commodity liabilities	(5)		(1)		(38)		(7)		(51)
Total	76		20		(36)		(7)		53
Total derivatives	76		20		(36)		(7)		53
Cash collateral receivable	—		—		5		—		5
Total derivatives - net basis	$	76	$	20	$	(31)	$	(7)	$	58

(1)PacifiCorp's commodity derivatives are generally included in rates. As of March 31, 2022 a regulatory liability of $195 million was recorded related to the net derivative asset of $195 million. As of December 31, 2021 a regulatory liability of $53 million was recorded related to the net derivative asset of $53 million.

The following table reconciles the beginning and ending balances of PacifiCorp's net regulatory assets and summarizes the pre-tax gains and losses on commodity derivative contracts recognized in net regulatory assets, as well as amounts reclassified to earnings (in millions):

	Three-Month Periods
	Ended March 31,
	2022		2021
Beginning balance	$	(53)	$	17
Changes in fair value recognized in regulatory assets	(168)		(17)
Net losses reclassified to operating revenue	(3)		—
Net gains reclassified to energy costs	29		—
Ending balance	$	(195)	$	—

55

Derivative Contract Volumes

The following table summarizes the net notional amounts of outstanding commodity derivative contracts with fixed price terms that comprise the mark-to-market values as of (in millions):

	Unit of	March 31,	December 31,
	Measure	2022	2021
Electricity purchases, net	Megawatt hours	1	2
Natural gas purchases	Decatherms	105	106

Credit Risk

PacifiCorp is exposed to counterparty credit risk associated with wholesale energy supply and marketing activities with other utilities, energy marketing companies, financial institutions and other market participants. Credit risk may be concentrated to the extent PacifiCorp's counterparties have similar economic, industry or other characteristics and due to direct or indirect relationships among the counterparties. Before entering into a transaction, PacifiCorp analyzes the financial condition of each significant wholesale counterparty, establishes limits on the amount of unsecured credit to be extended to each counterparty and evaluates the appropriateness of unsecured credit limits on an ongoing basis. To further mitigate wholesale counterparty credit risk, PacifiCorp enters into netting and collateral arrangements that may include margining and cross-product netting agreements and obtains third‑party guarantees, letters of credit and cash deposits. If required, PacifiCorp exercises rights under these arrangements, including calling on the counterparty's credit support arrangement.

Collateral and Contingent Features

In accordance with industry practice, certain wholesale agreements, including derivative contracts, contain credit support provisions that in part base certain collateral requirements on credit ratings for senior unsecured debt as reported by one or more of the recognized credit rating agencies. These agreements may either specifically provide bilateral rights to demand cash or other security if credit exposures on a net basis exceed specified rating-dependent threshold levels ("credit-risk-related contingent features") or provide the right for counterparties to demand "adequate assurance" if there is a material adverse change in PacifiCorp's creditworthiness. These rights can vary by contract and by counterparty. As of March 31, 2022, PacifiCorp's credit ratings for its senior secured debt and its issuer credit ratings for senior unsecured debt from the recognized credit rating agencies were investment grade.

The aggregate fair value of PacifiCorp's derivative contracts in liability positions with specific credit-risk-related contingent features totaled $10 million and $37 million as of March 31, 2022 and December 31, 2021, respectively, for which PacifiCorp had posted collateral of $— million and $5 million, respectively, in the form of cash deposits. If all credit-risk-related contingent features for derivative contracts in liability positions had been triggered as of March 31, 2022 and December 31, 2021, PacifiCorp would have been required to post $2 million and $23 million, respectively, of additional collateral. PacifiCorp's collateral requirements could fluctuate considerably due to market price volatility, changes in credit ratings, changes in legislation or regulation or other factors.

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(7)    Fair Value Measurements

The carrying value of PacifiCorp's cash, certain cash equivalents, receivables, payables, accrued liabilities and short-term borrowings approximates fair value because of the short-term maturity of these instruments. PacifiCorp has various financial assets and liabilities that are measured at fair value on the Consolidated Financial Statements using inputs from the three levels of the fair value hierarchy. A financial asset or liability classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The three levels are as follows:

•Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that PacifiCorp has the ability to access at the measurement date.

•Level 2 — Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

•Level 3 — Unobservable inputs reflect PacifiCorp's judgments about the assumptions market participants would use in pricing the asset or liability since limited market data exists. PacifiCorp develops these inputs based on the best information available, including its own data.

The following table presents PacifiCorp's financial assets and liabilities recognized on the Consolidated Balance Sheets and measured at fair value on a recurring basis (in millions):

	Input Levels for Fair Value Measurements
	Level 1		Level 2		Level 3		Other(1)		Total
As of March 31, 2022:
Assets:
Commodity derivatives	$	—	$	207	$	—	$	(25)	$	182
Money market mutual funds	319		—		—		—		319
Investment funds	28		—		—		—		28
	$	347	$	207	$	—	$	(25)	$	529
Liabilities - Commodity derivatives	$	—	$	(12)	$	—	$	8	$	(4)
As of December 31, 2021:
Assets:
Commodity derivatives	$	—	$	104	$	—	$	(8)	$	96
Money market mutual funds	181		—		—		—		181
Investment funds	27		—		—		—		27
	$	208	$	104	$	—	$	(8)	$	304
Liabilities - Commodity derivatives	$	—	$	(51)	$	—	$	13	$	(38)

(1)Represents netting under master netting arrangements and a net cash collateral payable of $17 million and a net cash collateral receivable of $5 million as of March 31, 2022 and December 31, 2021, respectively.

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Derivative contracts are recorded on the Consolidated Balance Sheets as either assets or liabilities and are stated at estimated fair value unless they are designated as normal purchases or normal sales and qualify for the exception afforded by GAAP. When available, the fair value of derivative contracts is estimated using unadjusted quoted prices for identical contracts in the market in which PacifiCorp transacts. When quoted prices for identical contracts are not available, PacifiCorp uses forward price curves. Forward price curves represent PacifiCorp's estimates of the prices at which a buyer or seller could contract today for delivery or settlement at future dates. PacifiCorp bases its forward price curves upon market price quotations, when available, or internally developed and commercial models, with internal and external fundamental data inputs. Market price quotations are obtained from independent energy brokers, exchanges, direct communication with market participants and actual transactions executed by PacifiCorp. Market price quotations for certain major electricity and natural gas trading hubs are generally readily obtainable for the first three years; therefore, PacifiCorp's forward price curves for those locations and periods reflect observable market quotes. Market price quotations for other electricity and natural gas trading hubs are not as readily obtainable for the first three years. Given that limited market data exists for these contracts, as well as for those contracts that are not actively traded, PacifiCorp uses forward price curves derived from internal models based on perceived pricing relationships to major trading hubs that are based on unobservable inputs. The estimated fair value of these derivative contracts is a function of underlying forward commodity prices, interest rates, currency rates, related volatility, counterparty creditworthiness and duration of contracts. Refer to Note 6 for further discussion regarding PacifiCorp's risk management and hedging activities.

PacifiCorp's investments in money market mutual funds and investment funds are stated at fair value. When available, PacifiCorp uses a readily observable quoted market price or net asset value of an identical security in an active market to record the fair value. In the absence of a quoted market price or net asset value of an identical security, the fair value is determined using pricing models or net asset values based on observable market inputs and quoted market prices of securities with similar characteristics.

PacifiCorp's long-term debt is carried at cost on the Consolidated Balance Sheets. The fair value of PacifiCorp's long-term debt is a Level 2 fair value measurement and has been estimated based upon quoted market prices, where available, or at the present value of future cash flows discounted at rates consistent with comparable maturities with similar credit risks. The carrying value of PacifiCorp's variable-rate long-term debt approximates fair value because of the frequent repricing of these instruments at market rates. The following table presents the carrying value and estimated fair value of PacifiCorp's long-term debt (in millions):

	As of March 31, 2022				As of December 31, 2021
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Long-term debt	$	8,722	$	9,423	$	8,730	$	10,374

(8)    Commitments and Contingencies

Legal Matters

PacifiCorp is party to a variety of legal actions arising out of the normal course of business. Plaintiffs occasionally seek punitive or exemplary damages. PacifiCorp does not believe that such normal and routine litigation will have a material impact on its consolidated financial results. PacifiCorp is also involved in other kinds of legal actions, some of which assert or may assert claims or seek to impose fines, penalties and other costs in substantial amounts and are described below.

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California and Oregon 2020 Wildfires

In September 2020, a severe weather event resulting in high winds, low humidity and warm temperatures contributed to several major wildfires, real and personal property and natural resource damage, personal injuries and loss of life and widespread power outages in Oregon and Northern California (the "2020 Wildfires"). The wildfires spread across certain parts of PacifiCorp's service territory and surrounding areas across multiple counties in Oregon and California, including Siskiyou County, California; Jackson County, Oregon; Douglas County, Oregon; Marion County, Oregon; Lincoln County, Oregon; and Klamath County, Oregon burning over 500,000 acres in aggregate. Third party reports for these wildfires indicate over 2,000 structures destroyed, including residences; several structures damaged; multiple individuals injured; and several fatalities. Fire suppression costs estimated by various agencies total approximately $150 million. Investigations into the cause and origin of each wildfire are complex and ongoing and being conducted by various entities, including the United States Forest Service, the California Public Utilities Commission, the Oregon Department of Forestry, the Oregon Department of Justice, PacifiCorp and various experts engaged by PacifiCorp.

Multiple lawsuits have been filed in Oregon and California, including a putative class action complaint in Oregon, on behalf of citizens and businesses who suffered damages from fires allegedly caused by PacifiCorp. Additionally, several insurance carriers have filed subrogation complaints in Oregon and California with allegations similar to those made in the aforementioned lawsuits. The final determinations of liability, however, will only be made following comprehensive investigations and litigation processes.

In California, under inverse condemnation, courts have held that investor-owned utilities can be liable for real and personal property damages without the utility being found negligent and regardless of fault. California law also permits inverse condemnation plaintiffs to recover reasonable attorney fees and costs. In both Oregon and California, PacifiCorp has equipment in areas accessed through special use permits, easements or similar agreements that may contain provisions requiring it to pay for damages caused by its equipment regardless of fault. Even if inverse condemnation or other provisions do not apply, PacifiCorp could nevertheless be found liable for all damages proximately caused by negligence, including real and personal property and natural resource damage; fire suppression costs; personal injury and loss of life damages; and interest.

PacifiCorp has accrued $136 million as its best estimate of the potential losses net of expected insurance recoveries associated with the 2020 Wildfires that are considered probable of being incurred. These accruals include estimated losses for fire suppression costs, real and personal property damage, personal injury damages and loss of life damages, but exclude estimated potential losses for natural resource damage as PacifiCorp is unable to reasonably estimate such losses at this time. It is reasonably possible that PacifiCorp will incur additional losses beyond the amounts accrued; however, PacifiCorp is currently unable to estimate the range of possible additional losses that could be incurred due to the number of properties and parties involved and the variation in those types of properties and lack of available details. To the extent losses beyond the amounts accrued are incurred, additional insurance coverage is expected to be available to cover at least a portion of the losses.

Environmental Laws and Regulations

PacifiCorp is subject to federal, state and local laws and regulations regarding air and water quality, renewable portfolio standards, emissions performance standards, climate change, coal combustion byproduct disposal, hazardous and solid waste disposal, protected species and other environmental matters that have the potential to impact PacifiCorp's current and future operations. PacifiCorp believes it is in material compliance with all applicable laws and regulations.

Hydroelectric Relicensing

PacifiCorp is a party to the 2016 amended Klamath Hydroelectric Settlement Agreement ("KHSA"), which is intended to resolve disputes surrounding PacifiCorp's efforts to relicense the Klamath Hydroelectric Project. The KHSA establishes a process for PacifiCorp, the states of Oregon and California ("States") and other stakeholders to assess whether dam removal can occur consistent with the settlement's terms. For PacifiCorp, the key elements of the settlement include: (1) a contribution from PacifiCorp's Oregon and California customers capped at $200 million plus $250 million in California bond funds; (2) complete indemnification from harms associated with dam removal; (3) transfer of the Federal Energy Regulatory Commission ("FERC") license to a third-party dam removal entity, the Klamath River Renewal Corporation ("KRRC"), who would conduct dam removal; and (4) ability for PacifiCorp to operate the facilities for the benefit of customers until dam removal commences.

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In September 2016, the KRRC and PacifiCorp filed a joint application with the FERC to transfer the license for the four mainstem Klamath dams from PacifiCorp to the KRRC. The FERC approved partial transfer of the Klamath license in a July 2020 order, subject to the condition that PacifiCorp remains co-licensee. Under the amended KHSA, PacifiCorp did not agree to remain co-licensee during the surrender and removal process given concerns about liability protections for PacifiCorp and its customers. In November 2020, PacifiCorp entered a memorandum of agreement (the "MOA") with the KRRC, the Karuk Tribe, the Yurok Tribe and the States to continue implementation of the KHSA. The agreement required the States, PacifiCorp and KRRC to file a new license transfer application to remove PacifiCorp from the license for the Klamath Hydroelectric Project and add the States and KRRC as co-licensees for the purposes of surrender. In addition, the MOA provides for additional contingency funding of $45 million, equally split between PacifiCorp and the States, and for PacifiCorp and the States to equally share in any additional cost overruns in the unlikely event that dam removal costs exceed the $450 million in funding to ensure dam removal is complete. The MOA also requires PacifiCorp to cover the costs associated with certain pre-existing environmental conditions. In June 2021, the FERC approved transfer of the four mainstem Klamath dams from PacifiCorp to the KRRC and the States as co-licensees. In July 2021, the Oregon, Wyoming, Idaho and California state public utility commissions conditionally approved the required property transfer applications. In August 2021, PacifiCorp notified the Public Service Commission of Utah of the property transfer, however no formal approval is required in Utah. The transfer will be effective within 30 days following the issuance of a license surrender from the FERC for the project, which remains pending. In February 2022, the FERC staff issued a draft environmental impact statement for the project, concluding that dam removal is the preferred alternative. Comments on the draft were due in April 2022, and a final environmental impact statement is expected later in 2022.

Guarantees

PacifiCorp has entered into guarantees as part of the normal course of business and the sale or transfer of certain assets. These guarantees are not expected to have a material impact on PacifiCorp's consolidated financial results.

(9)    Revenue from Contracts with Customers

The following table summarizes PacifiCorp's revenue from contracts with customers ("Customer Revenue") by line of business, with further disaggregation of retail by customer class (in millions):

	Three-Month Periods
	Ended March 31,
	2022		2021
Customer Revenue:
Retail:
Residential	$	505	$	483
Commercial	370		359
Industrial	273		271
Other retail	37		32
Total retail	1,185		1,145
Wholesale	55		36
Transmission	32		25
Other Customer Revenue	20		23
Total Customer Revenue	1,292		1,229
Other revenue	5		13
Total operating revenue	$	1,297	$	1,242

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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations

The following is management's discussion and analysis of certain significant factors that have affected the consolidated financial condition and results of operations of PacifiCorp during the periods included herein. Explanations include management's best estimate of the impact of weather, customer growth, usage trends and other factors. This discussion should be read in conjunction with PacifiCorp's historical unaudited Consolidated Financial Statements and Notes to Consolidated Financial Statements in Part I, Item 1 of this Form 10‑Q. PacifiCorp's actual results in the future could differ significantly from the historical results.

Results of Operations for the First Quarter of 2022 and 2021

Overview

Net income for the first quarter of 2022 was $130 million, a decrease of $39 million, or 23%, compared to 2021. Net income decreased primarily due to higher operations and maintenance expense, higher depreciation and amortization expense, higher income tax expense and higher other expense, partially offset by higher utility margin. Utility margin increased primarily due to higher retail revenue from higher volumes and higher average prices, higher average wholesale market prices, lower coal-fueled generation volumes and higher net power cost deferrals, partially offset by higher purchased electricity prices and volumes and higher natural gas-fueled generation prices and volumes. Retail customer volumes increased 1.9%, primarily due to an increase in the average number of customers, favorable impacts of weather and an increase in customer usage. Energy generated was essentially flat for the first quarter of 2022 compared to 2021. Wholesale electricity sales volumes decreased 2% and purchased electricity volumes increased 6%.

Non-GAAP Financial Measure

Management utilizes various key financial measures that are prepared in accordance with GAAP, as well as non-GAAP financial measures such as utility margin, to help evaluate results of operations. Utility margin is calculated as operating revenue less cost of fuel and energy, which are captions presented on the Consolidated Statements of Operations.

PacifiCorp's cost of fuel and energy is generally recovered from its customers through regulatory recovery mechanisms and as a result, changes in PacifiCorp's revenue are comparable to changes in such expenses. As such, management believes utility margin more appropriately and concisely explains profitability rather than a discussion of revenue and cost of fuel and energy separately. Management believes the presentation of utility margin provides meaningful and valuable insight into the information management considers important to running the business and a measure of comparability to others in the industry.

Utility margin is not a measure calculated in accordance with GAAP and should be viewed as a supplement to and not a substitute for operating income which is the most comparable financial measure prepared in accordance with GAAP. The following table provides a reconciliation of utility margin to operating income (in millions):

	First Quarter
	2022		2021		Change
Utility margin:
Operating revenue	$	1,297	$	1,242	$	55	4	%
Cost of fuel and energy	465		424		41		10
Utility margin	832		818		14		2
Operations and maintenance	277		259		18		7
Depreciation and amortization	280		264		16		6
Property and other taxes	59		61		(2)		(3)
Operating income	$	216	$	234	$	(18)	(8)	%

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Utility Margin

A comparison of key operating results related to utility margin is as follows:

	First Quarter
	2022		2021		Change
Utility margin (in millions):
Operating revenue	$	1,297	$	1,242	$	55	4	%
Cost of fuel and energy	465		424		41		10
Utility margin	$	832	$	818	$	14	2	%
Sales (GWhs):
Residential	4,764		4,632		132		3	%
Commercial	4,550		4,470		80		2
Industrial, irrigation and other	4,523		4,474		49		1
Total retail	13,837		13,576		261		2
Wholesale	1,553		1,591		(38)		(2)
Total sales	15,390		15,167		223		1	%
Average number of retail customers  (in thousands)	2,025		1,989		36		2	%
Average revenue per MWh:
Retail	$	85.46	$	84.15	$	1.31	2	%
Wholesale	$	39.12	$	30.89	$	8.23	27	%
Heating degree days	4,745		4,687		58		1	%
Cooling degree days	5		—		5		N/A
Sources of energy (GWhs)(1):
Coal	6,911		7,644		(733)		(10)	%
Natural gas	3,115		3,065		50		2
Wind(2)	2,392		1,738		654		38
Hydroelectric and other(2)	984		988		(4)		—
Total energy generated	13,402		13,435		(33)		—
Energy purchased	3,223		3,028		195		6
Total	16,625		16,463		162		1	%
Average cost of energy per MWh:
Energy generated(3)	$	18.83	$	17.66	$	1.17	7	%
Energy purchased	$	55.49	$	47.13	$	8.36	18	%

(1)    GWh amounts are net of energy used by the related generating facilities.

(2)    All or some of the renewable energy attributes associated with generation from these sources may be: (a) used in future years to comply with RPS or other regulatory requirements or (b) sold to third parties in the form of Renewable Energy Credits or other environmental commodities.

(3)    The average cost per MWh of energy generated includes only the cost of fuel associated with the generating facilities.

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Quarter Ended March 31, 2022 compared to Quarter Ended March 31, 2021

Utility margin increased $14 million, or 2%, for the first quarter of 2022 compared to 2021 primarily due to:

•$40 million increase in retail revenue due to higher volumes and higher average prices. Retail customer volumes increased 1.9%, primarily due to an increase in the average number of customers, favorable impacts of weather and an increase in customer usage;

•$12 million increase in wholesale revenue due to higher average market prices, partially offset by lower volumes;

•$12 million of lower coal-fueled generation costs due to lower volumes, partially offset by higher average prices;

•$8 million of higher deferred net power costs in accordance with established adjustment mechanisms; and

•$8 million of favorable wheeling activities.

The increases above were partially offset by:

•$36 million of higher purchased electricity costs from higher average market prices and volumes; and

•$27 million of higher natural gas-fueled generation costs due to higher average prices and higher volumes.

Operations and maintenance increased $18 million, or 7%, for the first quarter of 2022 compared to 2021 primarily due to higher maintenance costs, higher DSM amortization of regulatory balances, and higher insurance premiums due to cost increases related to wildfire coverage, partially offset by lower labor expenses and lower vegetation management costs.

Depreciation and amortization increased $16 million, or 6%, for the first quarter of 2022 compared to 2021 primarily due to higher plant in-service balances.

Other, net decreased $10 million for the first quarter of 2022 compared to 2021 primarily due to market movements related to corporate-owned life insurance policies and higher pension and postretirement costs.

Income tax expense (benefit) increased $13 million to an expense of $2 million for the first quarter of 2022 compared to a benefit of $11 million for the first quarter of 2021. The effective tax rate was 2% for the first quarter of 2022 and (7)% for the first quarter of 2021. The effective tax rate increased primarily due to a valuation allowance PacifiCorp recorded in the first quarter of 2022 against state net operating loss carryforwards.

Liquidity and Capital Resources

As of March 31, 2022, PacifiCorp's total net liquidity was as follows (in millions):

Cash and cash equivalents	$	335
Credit facilities	1,200
Less:
Tax-exempt bond support	(218)
Net credit facilities	982
Total net liquidity	$	1,317
Credit facilities:
Maturity dates	2024

Operating Activities

Net cash flows from operating activities for the three-month periods ended March 31, 2022 and 2021 were $537 million and $469 million, respectively. The change was primarily due to timing of operating payables and higher collections from retail customers, partially offset by higher wholesale purchases.

The timing of PacifiCorp's income tax cash flows from period to period can be significantly affected by the estimated federal income tax payment methods and assumptions for each payment date.

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Investing Activities

Net cash flows from investing activities for the three-month periods ended March 31, 2022 and 2021 were $(371) million and $(440) million, respectively. The change is primarily due to a decrease in capital expenditures of $65 million. Refer to "Future Uses of Cash" for discussion of capital expenditures.

Financing Activities

Net cash flows from financing activities for the three-month period ended March 31, 2022 were $(11) million. Uses of cash consisted substantially of $9 million for the repayment of long-term debt.

Net cash flows from financing activities for the three-month period ended March 31, 2021 were $1 million. Sources of cash consisted of $2 million from the borrowing of short-term debt.

Short-term Debt

Regulatory authorities limit PacifiCorp to $1.5 billion of short-term debt. As of March 31, 2022 and December 31, 2021, PacifiCorp had no short-term debt outstanding.

Debt Authorizations

PacifiCorp currently has regulatory authority from the OPUC and the Idaho Public Utilities Commission to issue an additional $2 billion of long-term debt. PacifiCorp must make a notice filing with the WUTC prior to any future issuance. PacifiCorp currently has an effective shelf registration statement with the SEC to issue an indeterminate amount of first mortgage bonds through September 2023.

Future Uses of Cash

PacifiCorp has available a variety of sources of liquidity and capital resources, both internal and external, including net cash flows from operating activities, public and private debt offerings, the issuance of commercial paper, the use of unsecured revolving credit facilities, capital contributions and other sources. These sources are expected to provide funds required for current operations, capital expenditures, debt retirements and other capital requirements. The availability and terms under which PacifiCorp has access to external financing depends on a variety of factors, including PacifiCorp's credit ratings, investors' judgment of risk associated with PacifiCorp and conditions in the overall capital markets, including the condition of the utility industry.

Capital Expenditures

PacifiCorp has significant future capital requirements. Capital expenditure needs are reviewed regularly by management and may change significantly as a result of these reviews, which may consider, among other factors, impacts to customers' rates; changes in environmental and other rules and regulations; outcomes of regulatory proceedings; changes in income tax laws; general business conditions; load projections; system reliability standards; the cost and efficiency of construction labor, equipment and materials; commodity prices; and the cost and availability of capital.

Historical and forecast capital expenditures, each of which exclude amounts for non-cash equity AFUDC and other non-cash items, are as follows (in millions):

	Three-Month Periods				Annual
	Ended March 31,				Forecast
	2021		2022		2022
Wind generation	$	33	$	8	$	154
Electric distribution	195		142		660
Electric transmission	60		153		1,185
Other	151		71		360
Total	$	439	$	374	$	2,359

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PacifiCorp's 2021 IRP identified a roadmap for a significant increase in renewable and carbon free generation resources, coal to natural gas conversion of certain coal-fueled units, energy storage and associated transmission. PacifiCorp's 2021 IRP identified over 1,800 MWs of new wind-powered generating resources that are expected to be online by 2025. PacifiCorp anticipates that the additional new wind-powered generation will be a mixture of owned and contracted resources. PacifiCorp has included an estimate for these new generation resources and associated transmission in its forecast capital expenditures for 2022 through 2024. These estimates are likely to change as a result of the RFP process. PacifiCorp's historical and forecast capital expenditures include the following:

•Wind generation includes both growth projects and operating expenditures. Growth projects include:

◦Construction of wind-powered generating facilities at PacifiCorp totaling $3 million and $27 million for the three-month periods ended March 31, 2022 and 2021, respectively. Construction includes 516 MWs of new wind-powered generating facilities that were placed in-service in 2021. Planned spending for the construction of additional wind-powered generating facilities totals $109 million for the remainder of 2022.

◦Planned acquisition and repowering of two wind-powered generating facilities by PacifiCorp totaling $3 million and $1 million for the three-month periods ended March 31, 2022 and 2021, respectively. The repowered facilities are expected to be placed in-service in 2023 and 2024. Planned spending for acquiring and repowering generating facilities totals $18 million for the remainder of 2022.

•Electric distribution includes both growth projects and operating expenditures. Operating expenditures includes spend on wildfire mitigation and wildfire and storm damage restoration. Expenditures for these items totaled $25 million and $83 million for the three-month periods ended March 31, 2022 and 2021, respectively. Planned spending for wildfire mitigation and wildfire and storm damage restoration totals $118 million for the remainder of 2022. Remaining investments relate to expenditures for new connections and distribution operations.

•Electric transmission includes both growth projects and operating expenditures. Transmission investment primarily reflects planned costs for the 416-mile, 500-kV high-voltage transmission line between the Aeolus substation near Medicine Bow in Wyoming and the Clover substation near Mona, Utah; the 59-mile, 230-kV high-voltage transmission line between the Windstar substation near Glenrock, Wyoming and the Aeolus substation; and the 290-mile, 500-kV high-voltage transmission line from the Longhorn substation near Boardman, Oregon to the Hemingway substation near Boise, Idaho. Expenditures for these segments totaled $95 million and $16 million for the three-month periods ended March 31, 2022 and 2021, respectively. Planned spending for these Energy Gateway Transmission segments to be placed in-service in 2024-2026 totals $814 million for the remainder of 2022.

•Other includes both growth projects and operating expenditures. Expenditures for information technology totaled $45 million and $13 million for the three-month periods ended March 31, 2022 and 2021, respectively. Planned information technology spending totals $127 million for the remainder of 2022. Remaining investments relate to operating projects that consist of routine expenditures for generation and other infrastructure needed to serve existing and expected demand.

Energy Supply Planning

As required by certain state regulations, PacifiCorp uses an IRP to develop a long-term resource plan to ensure that PacifiCorp can continue to provide reliable and cost-effective electric service to its customers while maintaining compliance with existing and evolving environmental laws and regulations.

In September 2021, PacifiCorp filed its 2021 IRP with its state commissions and subsequently filed its 2021 IRP Update in March and April 2022. In March 2022, the OPUC acknowledged PacifiCorp's 2021 IRP and its preferred portfolio. Reviews of the 2021 IRP by the UPSC, the Wyoming Public Service Commission, the WUTC and the Idaho Public Utilities Commission are ongoing.

Requests for Proposals

PacifiCorp issues individual RFPs to procure resources identified in the IRP or resources driven by customer demands. The IRP and the RFPs provide for the identification and staged procurement of resources to meet load or state-specific compliance obligations. Depending upon the specific RFP, applicable laws and regulations may require PacifiCorp to file draft RFPs with the UPSC, the OPUC and the WUTC. Approval by the UPSC, the OPUC or the WUTC may be required depending on the nature of the RFPs.

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A draft of PacifiCorp's 2022 All Source RFP ("2022AS RFP") was filed for approval with the WUTC in December 2021, and with the UPSC and the OPUC in January 2022. The draft 2022AS RFP was approved by the WUTC in March 2022 and by the UPSC and the OPUC in April 2022. PacifiCorp expects to issue the 2022AS RFP to market in the second quarter of 2022.

Material Cash Requirements

As of March 31, 2022, there have been no material changes outside the normal course of business in material cash requirements from the information provided in Item 7 of PacifiCorp's Annual Report on Form 10-K for the year ended December 31, 2021.

Regulatory Matters

PacifiCorp is subject to comprehensive regulation. Refer to "Regulatory Matters" in Berkshire Hathaway Energy's Part I, Item 2 of this Form 10-Q for discussion regarding PacifiCorp's current regulatory matters.

Environmental Laws and Regulations

PacifiCorp is subject to federal, state and local laws and regulations regarding climate change, wildfire prevention and mitigation, RPS, air and water quality, emissions performance standards, coal combustion byproduct disposal, hazardous and solid waste disposal, protected species and other environmental matters that have the potential to impact PacifiCorp's current and future operations. In addition to imposing continuing compliance obligations, these laws and regulations provide regulators with the authority to levy substantial penalties for noncompliance, including fines, injunctive relief and other sanctions. These laws and regulations are administered by various federal, state and local agencies. PacifiCorp believes it is in material compliance with all applicable laws and regulations, although many are subject to interpretation that may ultimately be resolved by the courts. Environmental laws and regulations continue to evolve, and PacifiCorp is unable to predict the impact of the changing laws and regulations on its operations and financial results.

Refer to "Environmental Laws and Regulations" in Berkshire Hathaway Energy's Part I, Item 2 of this Form 10-Q for additional information regarding environmental laws and regulations.

Critical Accounting Estimates

Certain accounting measurements require management to make estimates and judgments concerning transactions that will be settled several years in the future. Amounts recognized on the Consolidated Financial Statements based on such estimates involve numerous assumptions subject to varying and potentially significant degrees of judgment and uncertainty and will likely change in the future as additional information becomes available. Estimates are used for, but not limited to, the accounting for the effects of certain types of regulation, derivatives, pension and other postretirement benefits, income taxes and revenue recognition-unbilled revenue. For additional discussion of PacifiCorp's critical accounting estimates, see Item 7 of PacifiCorp's Annual Report on Form 10-K for the year ended December 31, 2021. There have been no significant changes in PacifiCorp's assumptions regarding critical accounting estimates since December 31, 2021.

66

MidAmerican Funding, LLC and its subsidiaries and MidAmerican Energy Company

Consolidated Financial Section

67

PART I

Item 1.Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholder of

MidAmerican Energy Company

Results of Review of Interim Financial Information

We have reviewed the accompanying balance sheet of MidAmerican Energy Company ("MidAmerican Energy") as of March 31, 2022, the related statements of operations, changes in shareholder's equity, and cash flows for the three-month periods ended March 31, 2022 and 2021, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the balance sheet of MidAmerican Energy as of December 31, 2021, and the related statements of operations, changes in shareholder's equity, and cash flows for the year then ended (not presented herein); and in our report dated February 25, 2022, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of MidAmerican Energy's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to MidAmerican Energy in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Deloitte & Touche LLP

Des Moines, Iowa

April 29, 2022

68

MIDAMERICAN ENERGY COMPANY

BALANCE SHEETS (Unaudited)

(Amounts in millions)

	As of
	March 31,		December 31,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	131	$	232
Trade receivables, net	468		526
Income tax receivable	297		79
Inventories	185		234
Other current assets	187		123
Total current assets	1,268		1,194
Property, plant and equipment, net	20,344		20,301
Regulatory assets	492		473
Investments and restricted investments	985		1,026
Other assets	262		263
Total assets	$	23,351	$	23,257

The accompanying notes are an integral part of these financial statements.

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MIDAMERICAN ENERGY COMPANY

BALANCE SHEETS (Unaudited) (continued)

(Amounts in millions)

	As of
	March 31,		December 31,
	2022		2021
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable	$	429	$	531
Accrued interest	88		84
Accrued property, income and other taxes	144		158
Current portion of long-term debt	7		—
Other current liabilities	144		145
Total current liabilities	812		918
Long-term debt	7,719		7,721
Regulatory liabilities	1,057		1,080
Deferred income taxes	3,373		3,389
Asset retirement obligations	723		714
Other long-term liabilities	463		475
Total liabilities	14,147		14,297
Commitments and contingencies (Note 7)
Shareholder's equity:
Common stock - 350 shares authorized, no par value, 71 shares issued and outstanding	—		—
Additional paid-in capital	561		561
Retained earnings	8,643		8,399
Total shareholder's equity	9,204		8,960
Total liabilities and shareholder's equity	$	23,351	$	23,257

The accompanying notes are an integral part of these financial statements.

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MIDAMERICAN ENERGY COMPANY

STATEMENTS OF OPERATIONS (Unaudited)

(Amounts in millions)

	Three-Month Periods
	Ended March 31,
	2022		2021
Operating revenue:
Regulated electric	$	608	$	545
Regulated natural gas and other	397		522
Total operating revenue	1,005		1,067
Operating expenses:
Cost of fuel and energy	125		151
Cost of natural gas purchased for resale and other	298		432
Operations and maintenance	192		193
Depreciation and amortization	250		207
Property and other taxes	40		36
Total operating expenses	905		1,019
Operating income	100		48
Other income (expense):
Interest expense	(78)		(74)
Allowance for borrowed funds	4		2
Allowance for equity funds	15		6
Other, net	(3)		11
Total other income (expense)	(62)		(55)
Income (loss) before income tax benefit	38		(7)
Income tax benefit	(206)		(154)
Net income	$	244	$	147

The accompanying notes are an integral part of these financial statements.

71

MIDAMERICAN ENERGY COMPANY

STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY (Unaudited)

(Amounts in millions)

	Common Stock		Additional Paid-in Capital		Retained Earnings		Total Shareholder's Equity
Balance, December 31, 2020	$	—	$	561	$	7,504	$	8,065
Net income	—		—		147		147
Balance, March 31, 2021	$	—	$	561	$	7,651	$	8,212
Balance, December 31, 2021	$	—	$	561	$	8,399	$	8,960
Net income	—		—		244		244
Balance, March 31, 2022	$	—	$	561	$	8,643	$	9,204

The accompanying notes are an integral part of these financial statements.

72

MIDAMERICAN ENERGY COMPANY

STATEMENTS OF CASH FLOWS (Unaudited)

(Amounts in millions)

	Three-Month Periods
	Ended March 31,
	2022		2021
Cash flows from operating activities:
Net income	$	244	$	147
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	250		207
Amortization of utility plant to other operating expenses	9		8
Allowance for equity funds	(15)		(6)
Deferred income taxes and investment tax credits, net	16		154
Settlements of asset retirement obligations	(7)		(4)
Other, net	10		(18)
Changes in other operating assets and liabilities:
Trade receivables and other assets	42		(299)
Inventories	49		46
Pension and other postretirement benefit plans	3		1
Accrued property, income and other taxes, net	(244)		(331)
Accounts payable and other liabilities	3		10
Net cash flows from operating activities	360		(85)
Cash flows from investing activities:
Capital expenditures	(459)		(298)
Purchases of marketable securities	(105)		(52)
Proceeds from sales of marketable securities	102		47
Other, net	1		—
Net cash flows from investing activities	(461)		(303)
Cash flows from financing activities:
Repayments of long-term debt	(1)		—
Net proceeds from short-term debt	—		387
Other, net	1		—
Net cash flows from financing activities	—		387
Net change in cash and cash equivalents and restricted cash and cash equivalents	(101)		(1)
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period	239		45
Cash and cash equivalents and restricted cash and cash equivalents at end of period	$	138	$	44

The accompanying notes are an integral part of these financial statements.

73

MIDAMERICAN ENERGY COMPANY

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

(1)    General

MidAmerican Energy Company ("MidAmerican Energy") is a public utility with electric and natural gas operations and is the principal subsidiary of MHC Inc. ("MHC"). MHC is a holding company that conducts no business other than the ownership of its subsidiaries. MHC's nonregulated subsidiary is Midwest Capital Group, Inc. MHC is the direct, wholly owned subsidiary of MidAmerican Funding, LLC ("MidAmerican Funding"), which is an Iowa limited liability company with Berkshire Hathaway Energy Company ("BHE") as its sole member. BHE is a holding company based in Des Moines, Iowa, that owns subsidiaries principally engaged in energy businesses. BHE is a consolidated subsidiary of Berkshire Hathaway Inc. ("Berkshire Hathaway").

The unaudited Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and the United States Securities and Exchange Commission's rules and regulations for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures required by GAAP for annual financial statements. Management believes the unaudited Financial Statements contain all adjustments (consisting only of normal recurring adjustments) considered necessary for the fair presentation of the unaudited Financial Statements as of March 31, 2022, and for the three-month periods ended March 31, 2022 and 2021. The results of operations for the three-month periods ended March 31, 2022, are not necessarily indicative of the results to be expected for the full year.

The preparation of the unaudited Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited Financial Statements and the reported amounts of revenue and expenses during the period. Actual results may differ from the estimates used in preparing the unaudited Financial Statements. Note 2 of Notes to Financial Statements included in MidAmerican Energy's Annual Report on Form 10-K for the year ended December 31, 2021, describes the most significant accounting policies used in the preparation of the unaudited Financial Statements. There have been no significant changes in MidAmerican Energy's assumptions regarding significant accounting estimates and policies during the three-month period ended March 31, 2022.

(2)    Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

Cash equivalents consist of funds invested in money market mutual funds, U.S. Treasury Bills and other investments with a maturity of three months or less when purchased. Cash and cash equivalents exclude amounts where availability is restricted by legal requirements, loan agreements or other contractual provisions. Restricted cash and cash equivalents consist substantially of funds restricted for wildlife preservation. A reconciliation of cash and cash equivalents and restricted cash and cash equivalents as presented in the Statements of Cash Flows is outlined below and disaggregated by the line items in which they appear on the Balance Sheets (in millions):

	As of
	March 31,		December 31,
	2022		2021
Cash and cash equivalents	$	131	$	232
Restricted cash and cash equivalents in other current assets	7		7
Total cash and cash equivalents and restricted cash and cash equivalents	$	138	$	239

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(3)    Property, Plant and Equipment, Net

Property, plant and equipment, net consists of the following (in millions):

		As of
		March 31,		December 31,
	Depreciable Life	2022		2021
Utility plant in-service, net:
Generation	20-70 years	$	17,466	$	17,397
Transmission	52-75 years	2,488		2,474
Electric distribution	20-75 years	4,713		4,661
Natural gas distribution	29-75 years	2,055		2,039
Utility plant in-service		26,722		26,571
Accumulated depreciation and amortization		(7,555)		(7,376)
Utility plant in-service, net		19,167		19,195
Nonregulated property, net:
Nonregulated property gross	20-50 years	7		7
Accumulated depreciation and amortization		(1)		(1)
Nonregulated property, net		6		6
		19,173		19,201
Construction work-in-progress		1,171		1,100
Property, plant and equipment, net		$	20,344	$	20,301

(4)    Income Taxes

The effective income tax rate for the three-month period ended March 31, 2021, is 2,200% and results from a $154 million income tax benefit associated with a $7 million pretax loss. The $154 million income tax benefit is primarily comprised of a $2 million benefit (21%) from the application of the statutory income tax rate to the pretax loss and a $168 million benefit (2,400%) from income tax credits, partially offset by a $13 million expense (186%) from the effects of ratemaking.

A reconciliation of the federal statutory income tax rate to MidAmerican Energy's effective income tax rate applicable to income before income tax benefit is as follows:

	Three-Month Periods
	Ended March 31,
	2022		2021
Federal statutory income tax rate	21	%	21	%
Income tax credits	(534)		2,400
State income tax, net of federal income tax impacts	(21)		(29)
Effects of ratemaking	(8)		(186)
Other, net	—		(6)
Effective income tax rate	(542)	%	2,200	%

Income tax credits relate primarily to production tax credits ("PTCs") from MidAmerican Energy's wind-powered generating facilities. Federal renewable electricity PTCs are earned as energy from qualifying wind-powered generating facilities is produced and sold and are based on a per-kilowatt hour rate pursuant to the applicable federal income tax law. MidAmerican Energy recognizes its renewable electricity PTCs throughout the year based on when the credits are earned and excludes them from the annual effective tax rate that is the basis for the interim recognition of other income tax expense. Wind-powered generating facilities are eligible for the credits for 10 years from the date the qualifying generating facilities are placed in-service. PTCs for the three-month periods ended March 31, 2022 and 2021 totaled $203 million and $151 million, respectively.

75

Berkshire Hathaway includes BHE and subsidiaries in its U.S. federal and Iowa state income tax returns. Consistent with established regulatory practice, MidAmerican Energy's provision for income tax has been computed on a stand-alone basis, and substantially all of its currently payable or receivable income tax is remitted to or received from BHE. MidAmerican Energy made no cash payments for income tax to BHE for each of the three-month periods ended March 31, 2022 and 2021.

(5)    Employee Benefit Plans

MidAmerican Energy sponsors a noncontributory defined benefit pension plan covering a majority of all employees of BHE and its domestic energy subsidiaries other than PacifiCorp and NV Energy, Inc. MidAmerican Energy also sponsors certain postretirement healthcare and life insurance benefits covering substantially all retired employees of BHE and its domestic energy subsidiaries other than PacifiCorp and NV Energy, Inc.

Net periodic benefit cost for the plans of MidAmerican Energy and the aforementioned affiliates included the following components (in millions):

	Three-Month Periods
	Ended March 31,
	2022		2021
Pension:
Service cost	$	5	$	5
Interest cost	5		6
Expected return on plan assets	(7)		(9)
Settlement	2		—
Net periodic benefit cost	$	5	$	2
Other postretirement:
Service cost	$	2	$	2
Interest cost	2		2
Expected return on plan assets	(4)		(2)
Net amortization	—		(1)
Net periodic benefit cost	$	—	$	1

Amounts other than the service cost for pension and other postretirement benefit plans are recorded in Other, net in the Statements of Operations. Employer contributions to the pension and other postretirement benefit plans are expected to be $7 million and $3 million, respectively, during 2022. As of March 31, 2022, $2 million and $1 million of contributions had been made to the pension and other postretirement benefit plans, respectively.

(6)    Fair Value Measurements

The carrying value of MidAmerican Energy's cash, certain cash equivalents, receivables, payables, accrued liabilities and short-term borrowings approximates fair value because of the short-term maturity of these instruments. MidAmerican Energy has various financial assets and liabilities that are measured at fair value on the Financial Statements using inputs from the three levels of the fair value hierarchy. A financial asset or liability classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The three levels are as follows:

•Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that MidAmerican Energy has the ability to access at the measurement date.

•Level 2 — Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

•Level 3 — Unobservable inputs reflect MidAmerican Energy's judgments about the assumptions market participants would use in pricing the asset or liability since limited market data exists. MidAmerican Energy develops these inputs based on the best information available, including its own data.

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The following table presents MidAmerican Energy's financial assets and liabilities recognized on the Balance Sheets and measured at fair value on a recurring basis (in millions):

	Input Levels for Fair Value Measurements
	Level 1		Level 2		Level 3		Other(1)		Total
As of March 31, 2022:
Assets:
Commodity derivatives	$	—	$	66	$	4	$	—	$	70
Money market mutual funds	132		—		—		—		132
Debt securities:
U.S. government obligations	225		—		—		—		225
International government obligations	—		1		—		—		1
Corporate obligations	—		79		—		—		79
Municipal obligations	—		3		—		—		3
Agency, asset and mortgage-backed obligations	—		1		—		—		1
Equity securities:
U.S. companies	415		—		—		—		415
International companies	9		—		—		—		9
Investment funds	23		—		—		—		23
	$	804	$	150	$	4	$	—	$	958
Liabilities - commodity derivatives	$	(1)	$	—	$	—	$	—	$	(1)

	Input Levels for Fair Value Measurements
	Level 1		Level 2		Level 3		Other(1)		Total
As of December 31, 2021:
Assets:
Commodity derivatives	$	—	$	32	$	3	$	(7)	$	28
Money market mutual funds	228		—		—		—		228
Debt securities:
U.S. government obligations	232		—		—		—		232
International government obligations	—		2		—		—		2
Corporate obligations	—		90		—		—		90
Municipal obligations	—		3		—		—		3
Agency, asset and mortgage-backed obligations	—		2		—		—		2
Equity securities:
U.S. companies	428		—		—		—		428
International companies	10		—		—		—		10
Investment funds	18		—		—		—		18
	$	916	$	129	$	3	$	(7)	$	1,041
Liabilities - commodity derivatives	$	—	$	(6)	$	(8)	$	12	$	(2)

(1)Represents netting under master netting arrangements and a net cash collateral receivable of $— million and $5 million as of March 31, 2022 and December 31, 2021, respectively.

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MidAmerican Energy's investments in money market mutual funds and debt and equity securities are stated at fair value, with debt securities accounted for as available-for-sale securities. When available, a readily observable quoted market price or net asset value of an identical security in an active market is used to record the fair value. In the absence of a quoted market price or net asset value of an identical security, the fair value is determined using pricing models or net asset values based on observable market inputs and quoted market prices of securities with similar characteristics.

MidAmerican Energy's long-term debt is carried at cost on the Balance Sheets. The fair value of MidAmerican Energy's long-term debt is a Level 2 fair value measurement and has been estimated based upon quoted market prices, where available, or at the present value of future cash flows discounted at rates consistent with comparable maturities with similar credit risks. The carrying value of MidAmerican Energy's variable-rate long-term debt approximates fair value because of the frequent repricing of these instruments at market rates. The following table presents the carrying value and estimated fair value of MidAmerican Energy's long-term debt (in millions):

	As of March 31, 2022				As of December 31, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt	$	7,726	$	8,196	$	7,721	$	9,037

(7)    Commitments and Contingencies

Legal Matters

MidAmerican Energy is party to a variety of legal actions arising out of the normal course of business. Plaintiffs occasionally seek punitive or exemplary damages. MidAmerican Energy does not believe that such normal and routine litigation will have a material impact on its financial results.

Environmental Laws and Regulations

MidAmerican Energy is subject to federal, state and local laws and regulations regarding climate change, renewable portfolio standards, air and water quality, emissions performance standards, coal combustion byproduct disposal, hazardous and solid waste disposal, protected species and other environmental matters that have the potential to impact its current and future operations. MidAmerican Energy believes it is in material compliance with all applicable laws and regulations.

Transmission Rates

MidAmerican Energy's wholesale transmission rates are set annually using Federal Energy Regulatory Commission ("FERC")-approved formula rates subject to true-up for actual cost of service. MidAmerican Energy is authorized by the FERC to include a 0.50% adder beyond the approved base return on equity ("ROE") effective January 2015. Prior to September 2016, the rates in effect were based on a 12.38% ROE. In November 2013 and February 2015, a coalition of intervenors filed successive complaints with the FERC requesting that the 12.38% ROE no longer be found just and reasonable and sought to reduce the base ROE to 9.15% and 8.67%, respectively. In September 2016, the FERC issued an order for the first complaint, which reduces the base ROE to 10.32% and required refunds, plus interest, for the period from November 2013 through February 2015. Customer refunds relative to the first complaint occurred in February 2017. In November 2019, the FERC issued an order addressing the second complaint and issues on appeal in the first complaint. The order established a ROE of 9.88% (10.38% including the 0.50% adder) for the 15-month refund period of the first complaint and prospectively from September 2016 forward. In May 2020, the FERC issued an order on rehearing of the November 2019 order. The May 2020 order affirmed the FERC's prior decision to dismiss the second complaint and established an ROE of 10.02% (10.52% including the 0.50% adder) for the 15-month refund period of the first complaint and prospectively from September 2016 to the date of the May 2020 order. These orders continue to be subject to judicial appeal. MidAmerican Energy cannot predict the ultimate outcome of these matters and, as of March 31, 2022, has accrued an $8 million liability for refunds of amounts collected under the higher ROE during the periods covered by both complaints.

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(8)    Revenue from Contracts with Customers

The following table summarizes MidAmerican Energy's revenue from contracts with customers ("Customer Revenue") by line of business, with further disaggregation of retail by customer class, including a reconciliation to MidAmerican Energy's reportable segment information included in Note 9 (in millions):

	For the Three-Month Period Ended March 31, 2022
	Electric		Natural Gas		Other		Total
Customer Revenue:
Retail:
Residential	$	168	$	225	$	—	$	393
Commercial	74		88		—		162
Industrial	198		9		—		207
Natural gas transportation services	—		14		—		14
Other retail(1)	32		1		—		33
Total retail	472		337		—		809
Wholesale	104		58		—		162
Multi-value transmission projects	15		—		—		15
Other Customer Revenue	—		—		1		1
Total Customer Revenue	591		395		1		987
Other revenue	17		1		—		18
Total operating revenue	$	608	$	396	$	1	$	1,005

	For the Three-Month Period Ended March 31, 2021
	Electric		Natural Gas		Other		Total
Customer Revenue:
Retail:
Residential	$	161	$	308	$	—	$	469
Commercial	71		129		—		200
Industrial	190		12		—		202
Natural gas transportation services	—		10		—		10
Other retail(1)	30		1		—		31
Total retail	452		460		—		912
Wholesale	74		51		—		125
Multi-value transmission projects	15		—		—		15
Other Customer Revenue	—		—		10		10
Total Customer Revenue	541		511		10		1,062
Other revenue	4		1		—		5
Total operating revenue	$	545	$	512	$	10	$	1,067

(1)    Other retail includes provisions for rate refunds, for which any actual refunds will be reflected in the applicable customer classes upon resolution of the related regulatory proceeding.

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(9)    Segment Information

MidAmerican Energy has identified two reportable segments: regulated electric and regulated natural gas. The regulated electric segment derives most of its revenue from regulated retail sales of electricity to residential, commercial, and industrial customers and from wholesale sales. The regulated natural gas segment derives most of its revenue from regulated retail sales of natural gas to residential, commercial, and industrial customers and also obtains revenue by transporting natural gas owned by others through its distribution system. Pricing for regulated electric and regulated natural gas sales are established separately by regulatory agencies; therefore, management also reviews each segment separately to make decisions regarding allocation of resources and in evaluating performance. Common operating costs, interest income, interest expense and income tax expense are allocated to each segment based on certain factors, which primarily relate to the nature of the cost.

The following tables provide information on a reportable segment basis (in millions):

	Three-Month Periods
	Ended March 31,
	2022		2021
Operating revenue:
Regulated electric	$	608	$	545
Regulated natural gas	396		512
Other	1		10
Total operating revenue	$	1,005	$	1,067
Operating income:
Regulated electric	$	51	$	9
Regulated natural gas	49		39
Total operating income	100		48
Interest expense	(78)		(74)
Allowance for borrowed funds	4		2
Allowance for equity funds	15		6
Other, net	(3)		11
Income (loss) before income tax benefit	$	38	$	(7)

	As of
	March 31, 2022		December 31, 2021
Assets:
Regulated electric	$	21,613	$	21,385
Regulated natural gas	1,737		1,871
Other	1		1
Total assets	$	23,351	$	23,257

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Managers and Member of

MidAmerican Funding, LLC

Results of Review of Interim Financial Information

We have reviewed the accompanying consolidated balance sheet of MidAmerican Funding, LLC and subsidiaries ("MidAmerican Funding") as of March 31, 2022, the related consolidated statements of operations, changes in member's equity, and cash flows for the three-month periods ended March 31, 2022 and 2021, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB) and in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of MidAmerican Funding as of December 31, 2021, and the related consolidated statements of operations, changes in member's equity, and cash flows for the year then ended (not presented herein); and in our report dated February 25, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of MidAmerican Funding's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to MidAmerican Funding in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB and with auditing standards generally accepted in the United States of America applicable to reviews of interim financial information. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB and with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Deloitte & Touche LLP

Des Moines, Iowa

April 29, 2022

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MIDAMERICAN FUNDING, LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Amounts in millions)

	As of
	March 31,		December 31,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	132	$	233
Trade receivables, net	468		526
Income tax receivable	299		80
Inventories	185		234
Other current assets	187		123
Total current assets	1,271		1,196
Property, plant and equipment, net	20,345		20,302
Goodwill	1,270		1,270
Regulatory assets	492		473
Investments and restricted investments	987		1,028
Other assets	261		262
Total assets	$	24,626	$	24,531

The accompanying notes are an integral part of these consolidated financial statements.

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MIDAMERICAN FUNDING, LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited) (continued)

(Amounts in millions)

	As of
	March 31,		December 31,
	2022		2021
LIABILITIES AND MEMBER'S EQUITY
Current liabilities:
Accounts payable	$	429	$	531
Accrued interest	89		89
Accrued property, income and other taxes	144		158
Note payable to affiliate	197		189
Current portion of long-term debt	7		—
Other current liabilities	145		146
Total current liabilities	1,011		1,113
Long-term debt	7,959		7,961
Regulatory liabilities	1,057		1,080
Deferred income taxes	3,371		3,387
Asset retirement obligations	723		714
Other long-term liabilities	463		475
Total liabilities	14,584		14,730
Commitments and contingencies (Note 7)
Member's equity:
Paid-in capital	1,679		1,679
Retained earnings	8,363		8,122
Total member's equity	10,042		9,801
Total liabilities and member's equity	$	24,626	$	24,531

The accompanying notes are an integral part of these consolidated financial statements.

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MIDAMERICAN FUNDING, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Amounts in millions)

	Three-Month Periods
	Ended March 31,
	2022		2021
Operating revenue:
Regulated electric	$	608	$	545
Regulated natural gas and other	397		522
Total operating revenue	1,005		1,067
Operating expenses:
Cost of fuel and energy	125		151
Cost of natural gas purchased for resale and other	298		432
Operations and maintenance	192		193
Depreciation and amortization	250		207
Property and other taxes	40		36
Total operating expenses	905		1,019
Operating income	100		48
Other income (expense):
Interest expense	(82)		(78)
Allowance for borrowed funds	4		2
Allowance for equity funds	15		6
Other, net	(4)		10
Total other income (expense)	(67)		(60)
Income (loss) before income tax benefit	33		(12)
Income tax benefit	(208)		(156)
Net income	$	241	$	144

The accompanying notes are an integral part of these consolidated financial statements.

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MIDAMERICAN FUNDING, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER'S EQUITY (Unaudited)

(Amounts in millions)

	Paid-in Capital		Retained Earnings		Total Member's Equity
Balance, December 31, 2020	$	1,679	$	7,240	$	8,919
Net income	—		144		144
Balance, March 31, 2021	$	1,679	$	7,384	$	9,063
Balance, December 31, 2021	$	1,679	$	8,122	$	9,801
Net income	—		241		241
Balance, March 31, 2022	$	1,679	$	8,363	$	10,042

The accompanying notes are an integral part of these consolidated financial statements.

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MIDAMERICAN FUNDING, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Amounts in millions)

	Three-Month Periods
	Ended March 31,
	2022		2021
Cash flows from operating activities:
Net income	$	241	$	144
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	250		207
Amortization of utility plant to other operating expenses	9		8
Allowance for equity funds	(15)		(6)
Deferred income taxes and investment tax credits, net	16		153
Settlements of asset retirement obligations	(7)		(4)
Other, net	10		(17)
Changes in other operating assets and liabilities:
Trade receivables and other assets	43		(298)
Inventories	49		46
Pension and other postretirement benefit plans	3		1
Accrued property, income and other taxes, net	(245)		(332)
Accounts payable and other liabilities	(1)		6
Net cash flows from operating activities	353		(92)
Cash flows from investing activities:
Capital expenditures	(459)		(298)
Purchases of marketable securities	(105)		(52)
Proceeds from sales of marketable securities	102		47
Other, net	1		—
Net cash flows from investing activities	(461)		(303)
Cash flows from financing activities:
Repayments of long-term debt	(1)		—
Net change in note payable to affiliate	8		7
Net proceeds from short-term debt	—		387
Net cash flows from financing activities	7		394
Net change in cash and cash equivalents and restricted cash and cash equivalents	(101)		(1)
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period	240		46
Cash and cash equivalents and restricted cash and cash equivalents at end of period	$	139	$	45

The accompanying notes are an integral part of these consolidated financial statements.

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MIDAMERICAN FUNDING, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1)    General

MidAmerican Funding, LLC ("MidAmerican Funding") is an Iowa limited liability company with Berkshire Hathaway Energy Company ("BHE") as its sole member. BHE is a holding company based in Des Moines, Iowa, that owns subsidiaries principally engaged in energy businesses. BHE is a consolidated subsidiary of Berkshire Hathaway Inc. ("Berkshire Hathaway"). MidAmerican Funding's direct, wholly owned subsidiary is MHC Inc. ("MHC"), which constitutes substantially all of MidAmerican Funding's assets, liabilities and business activities except those related to MidAmerican Funding's long-term debt securities. MHC conducts no business other than the ownership of its subsidiaries. MHC's principal subsidiary is MidAmerican Energy Company ("MidAmerican Energy"), a public utility with electric and natural gas operations, and its direct, wholly owned nonregulated subsidiary is Midwest Capital Group, Inc.

The unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and the United States Securities and Exchange Commission's rules and regulations for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures required by GAAP for annual financial statements. Management believes the unaudited Consolidated Financial Statements contain all adjustments (consisting only of normal recurring adjustments) considered necessary for the fair presentation of the unaudited Consolidated Financial Statements as of March 31, 2022, and for the three-month periods ended March 31, 2022 and 2021. The results of operations for the three-month periods ended March 31, 2022, are not necessarily indicative of the results to be expected for the full year.

The preparation of the unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited Consolidated Financial Statements and the reported amounts of revenue and expenses during the period. Actual results may differ from the estimates used in preparing the unaudited Consolidated Financial Statements. Note 2 of Notes to Consolidated Financial Statements included in MidAmerican Funding's Annual Report on Form 10-K for the year ended December 31, 2021, describes the most significant accounting policies used in the preparation of the unaudited Consolidated Financial Statements. There have been no significant changes in MidAmerican Funding's assumptions regarding significant accounting estimates and policies during the three-month period ended March 31, 2022.

(2)    Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

Cash equivalents consist of funds invested in money market mutual funds, U.S. Treasury Bills and other investments with a maturity of three months or less when purchased. Cash and cash equivalents exclude amounts where availability is restricted by legal requirements, loan agreements or other contractual provisions. Restricted cash and cash equivalents consist substantially of funds restricted for wildlife preservation. A reconciliation of cash and cash equivalents and restricted cash and cash equivalents as presented in the Consolidated Statements of Cash Flows is outlined below and disaggregated by the line items in which they appear on the Consolidated Balance Sheets (in millions):

	As of
	March 31,		December 31,
	2022		2021
Cash and cash equivalents	$	132	$	233
Restricted cash and cash equivalents in other current assets	7		7
Total cash and cash equivalents and restricted cash and cash equivalents	$	139	$	240

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(3)    Property, Plant and Equipment, Net

Refer to Note 3 of MidAmerican Energy's Notes to Financial Statements.

(4)    Income Taxes

The effective income tax rate for the three-month period ended March 31, 2021, is 1,300% and results from a $156 million income tax benefit associated with a $12 million pretax loss. The $156 million income tax benefit is primarily comprised of a $3 million benefit (21%) from the application of the statutory income tax rate to the pretax loss and a $168 million benefit (1,400%) from income tax credits, partially offset by a $13 million expense (108%) from the effects of ratemaking.

A reconciliation of the federal statutory income tax rate to MidAmerican Funding's effective income tax rate applicable to income before income tax benefit is as follows:

	Three-Month Periods
	Ended March 31,
	2022		2021
Federal statutory income tax rate	21	%	21	%
Income tax credits	(618)		1,400
State income tax, net of federal income tax impacts	(24)		(8)
Effects of ratemaking	(9)		(108)
Other, net	—		(5)
Effective income tax rate	(630)	%	1,300	%

Income tax credits relate primarily to production tax credits ("PTCs") from MidAmerican Energy's wind-powered generating facilities. Federal renewable electricity PTCs are earned as energy from qualifying wind-powered generating facilities is produced and sold and are based on a per-kilowatt hour rate pursuant to the applicable federal income tax law. MidAmerican Funding recognizes its renewable electricity PTCs throughout the year based on when the credits are earned and excludes them from the annual effective tax rate that is the basis for the interim recognition of other income tax expense. Wind-powered generating facilities are eligible for the credits for 10 years from the date the qualifying generating facilities are placed in-service. PTCs for the three-month periods ended March 31, 2022 and 2021 totaled $203 million and $151 million, respectively.

Berkshire Hathaway includes BHE and subsidiaries in its U.S. federal and Iowa state income tax returns. Consistent with established regulatory practice, MidAmerican Funding's and MidAmerican Energy's provisions for income tax have been computed on a stand-alone basis, and substantially all of their currently payable or receivable income tax is remitted to or received from BHE. MidAmerican Funding made no cash payments for income tax to BHE for each of the three-month periods ended March 31, 2022 and 2021.

(5)    Employee Benefit Plans

Refer to Note 5 of MidAmerican Energy's Notes to Financial Statements.

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(6)    Fair Value Measurements

Refer to Note 6 of MidAmerican Energy's Notes to Financial Statements. MidAmerican Funding's long-term debt is carried at cost on the Consolidated Financial Statements. The fair value of MidAmerican Funding's long-term debt is a Level 2 fair value measurement and has been estimated based upon quoted market prices, where available, or at the present value of future cash flows discounted at rates consistent with comparable maturities with similar credit risks. The carrying value of MidAmerican Funding's variable-rate long-term debt approximates fair value because of the frequent repricing of these instruments at market rates. The following table presents the carrying value and estimated fair value of MidAmerican Funding's long-term debt (in millions):

	As of March 31, 2022				As of December 31, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt	$	7,966	$	8,480	$	7,961	$	9,350

(7)    Commitments and Contingencies

MidAmerican Funding is party to a variety of legal actions arising out of the normal course of business. Plaintiffs occasionally seek punitive or exemplary damages. MidAmerican Funding does not believe that such normal and routine litigation will have a material impact on its consolidated financial results.

Refer to Note 7 of MidAmerican Energy's Notes to Financial Statements.

(8)    Revenue from Contracts with Customers

Refer to Note 8 of MidAmerican Energy's Notes to Financial Statements.

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(9)    Segment Information

MidAmerican Funding has identified two reportable segments: regulated electric and regulated natural gas. The regulated electric segment derives most of its revenue from regulated retail sales of electricity to residential, commercial, and industrial customers and from wholesale sales. The regulated natural gas segment derives most of its revenue from regulated retail sales of natural gas to residential, commercial, and industrial customers and also obtains revenue by transporting natural gas owned by others through its distribution system. Pricing for regulated electric and regulated natural gas sales are established separately by regulatory agencies; therefore, management also reviews each segment separately to make decisions regarding allocation of resources and in evaluating performance. Common operating costs, interest income, interest expense and income tax expense are allocated to each segment based on certain factors, which primarily relate to the nature of the cost. "Other" in the tables below consists of the financial results and assets of nonregulated operations, MHC and MidAmerican Funding.

The following tables provide information on a reportable segment basis (in millions):

	Three-Month Periods
	Ended March 31,
	2022		2021
Operating revenue:
Regulated electric	$	608	$	545
Regulated natural gas	396		512
Other	1		10
Total operating revenue	$	1,005	$	1,067
Operating income:
Regulated electric	$	51	$	9
Regulated natural gas	49		39
Total operating income	100		48
Interest expense	(82)		(78)
Allowance for borrowed funds	4		2
Allowance for equity funds	15		6
Other, net	(4)		10
Income (loss) before income tax benefit	$	33	$	(12)

	As of
	March 31, 2022		December 31, 2021
Assets(1):
Regulated electric	$	22,804	$	22,576
Regulated natural gas	1,816		1,950
Other	6		5
Total assets	$	24,626	$	24,531

(1) Assets by reportable segment reflect the assignment of goodwill to applicable reporting units.

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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations

The following is management's discussion and analysis of certain significant factors that have affected the consolidated financial condition and results of operations of MidAmerican Funding and its subsidiaries and MidAmerican Energy during the periods included herein. Information in Management's Discussion and Analysis related to MidAmerican Energy, whether or not segregated, also relates to MidAmerican Funding. Information related to other subsidiaries of MidAmerican Funding pertains only to the discussion of the financial condition and results of operations of MidAmerican Funding. Where necessary, discussions have been segregated under the heading "MidAmerican Funding" to allow the reader to identify information applicable only to MidAmerican Funding. Explanations include management's best estimate of the impact of weather, customer growth, usage trends and other factors. This discussion should be read in conjunction with MidAmerican Funding's historical unaudited Consolidated Financial Statements and Notes to Consolidated Financial Statements and MidAmerican Energy's historical unaudited Financial Statements and Notes to Financial Statements in Part I, Item 1 of this Form 10-Q. MidAmerican Funding's and MidAmerican Energy's actual results in the future could differ significantly from the historical results.

Results of Operations for the First Quarter of 2022 and 2021

Overview

MidAmerican Energy -

MidAmerican Energy's net income for the first quarter of 2022 was $244 million, an increase of $97 million, or 66%, compared to 2021, primarily due to higher electric utility margin of $89 million, higher natural gas utility margin of $18 million, higher income tax benefit of $52 million and higher allowances for equity and borrowed funds of $11 million, offset by higher depreciation and amortization expense of $43 million, unfavorable other, net of $14 million, lower nonregulated utility margins of $9 million, higher property and other taxes of $4 million and higher interest expense of $4 million. Electric retail customer volumes increased 6% primarily due to higher usage for certain industrial customers and the favorable impact of weather. Wholesale electricity sales volumes increased 31% due to favorable market conditions. Energy generated increased 17% primarily due to greater wind-powered generation, resulting in a 10% decrease in the average per-unit cost of energy generated. Natural gas retail customer volumes increased 8% due to the favorable impact of weather.

MidAmerican Funding -

MidAmerican Funding's net income for the first quarter of 2022 was $241 million, an increase of $97 million, or 67%, compared to 2021. The variances in net income were primarily due to the changes in MidAmerican Energy's earnings discussed above.

Non-GAAP Financial Measure

Management utilizes various key financial measures that are prepared in accordance with GAAP, as well as non-GAAP financial measures such as, electric utility margin and natural gas utility margin, to help evaluate results of operations. Electric utility margin is calculated as regulated electric operating revenue less cost of fuel and energy, which are captions presented on the Statements of Operations. Natural gas utility margin is calculated as regulated natural gas operating revenue less regulated cost of natural gas purchased for resale, which are included in regulated natural gas and other and cost of natural gas purchased for resale and other, respectively, on the Statements of Operations.

MidAmerican Energy's cost of fuel and energy and cost of natural gas purchased for resale are generally recovered from its retail customers through regulatory recovery mechanisms, and as a result, changes in MidAmerican Energy's expense included in regulatory recovery mechanisms result in comparable changes to revenue. As such, management believes electric utility margin and natural gas utility margin more appropriately and concisely explain profitability rather than a discussion of revenue and cost of sales separately. Management believes the presentation of electric utility margin and natural gas utility margin provides meaningful and valuable insight into the information management considers important to running the business and a measure of comparability to others in the industry.

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Electric utility margin and natural gas utility margin are not measures calculated in accordance with GAAP and should be viewed as a supplement to, and not a substitute for, operating income, which is the most comparable financial measure prepared in accordance with GAAP. The following table provides a reconciliation of utility margin to MidAmerican Energy's operating income (in millions):

	First Quarter
	2022		2021		Change
Electric utility margin:
Operating revenue	$	608	$	545	$	63	12	%
Cost of fuel and energy	125		151		(26)		(17)
Electric utility margin	483		394		89		23	%
Natural gas utility margin:
Operating revenue	396		512		(116)		(23)	%
Natural gas purchased for resale	298		432		(134)		(31)
Natural gas utility margin	98		80		18		23	%
Utility margin	581		474		107		23	%
Other operating revenue	1		10		(9)		(90)	%
Operations and maintenance	192		193		(1)		(1)
Depreciation and amortization	250		207		43		21
Property and other taxes	40		36		4		11
Operating income	$	100	$	48	$	52	*

*    Not meaningful.

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Electric Utility Margin

A comparison of key operating results related to electric utility margin is as follows:

	First Quarter
	2022		2021		Change
Utility margin (in millions):
Operating revenue	$	608	$	545	$	63	12	%
Cost of fuel and energy	125		151		(26)		(17)
Utility margin	$	483	$	394	$	89	23	%
Sales (GWhs):
Residential	1,853		1,738		115		7	%
Commercial	1,013		938		75		8
Industrial	3,979		3,819		160		4
Other	403		370		33		9
Total retail	7,248		6,865		383		6
Wholesale	5,325		4,051		1,274		31
Total sales	12,573		10,916		1,657		15	%
Average number of retail customers (in thousands)	810		801		9		1	%
Average revenue per MWh:
Retail	$	65.10	$	65.82	$	(0.72)	(1)	%
Wholesale	$	20.65	$	16.64	$	4.01	24	%
Heating degree days	3,315		3,211		104		3	%
Sources of energy (GWhs)(1):
Wind and other(2)	8,290		6,122		2,168		35	%
Coal	2,359		2,902		(543)		(19)
Nuclear	920		895		25		3
Natural gas	234		143		91		64
Total energy generated	11,803		10,062		1,741		17
Energy purchased	962		1,018		(56)		(6)
Total	12,765		11,080		1,685		15	%
Average cost of energy per MWh:
Energy generated(3)	$	5.56	$	6.15	$	(0.59)	(10)	%
Energy purchased	$	62.04	$	87.45	$	(25.41)	(29)	%

(1)    GWh amounts are net of energy used by the related generating facilities.

(2)    All or some of the renewable energy attributes associated with generation from these generating facilities may be: (a) used in future years to comply with RPS or other regulatory requirements or (b) sold to third parties in the form of renewable energy credits or other environmental commodities.

(3)    The average cost per MWh of energy generated includes only the cost of fuel associated with the generating facilities.

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Natural Gas Utility Margin

A comparison of key operating results related to natural gas utility margin is as follows:

	First Quarter
	2022		2021		Change
Utility margin (in millions):
Operating revenue	$	396	$	512	$	(116)	(23)	%
Natural gas purchased for resale	298		432		(134)		(31)
Utility margin	$	98	$	80	$	18	23	%
Throughput (000's Dths):
Residential	27,099		25,282		1,817		7	%
Commercial	12,460		11,733		727		6
Industrial	1,844		1,437		407		28
Other	35		37		(2)		(5)
Total retail sales	41,438		38,489		2,949		8
Wholesale sales	12,232		10,773		1,459		14
Total sales	53,670		49,262		4,408		9
Natural gas transportation service	31,313		29,640		1,673		6
Total throughput	84,983		78,902		6,081		8	%
Average number of retail customers (in thousands)	785		777		8		1	%
Average revenue per retail Dth sold	$	7.84	$	11.70	$	(3.86)	(33)	%
Heating degree days	3,485		3,301		184		6	%
Average cost of natural gas per retail Dth sold	$	5.80	$	9.87	$	(4.07)	(41)	%
Combined retail and wholesale average cost of natural gas per Dth sold	$	5.55	$	8.76	$	(3.21)	(37)	%

Quarter Ended March 31, 2022 Compared to Quarter Ended March 31, 2021

MidAmerican Energy -

Electric utility margin increased $89 million, or 23%, for the first quarter of 2022 compared to 2021, due to:

•a $64 million increase in wholesale utility margin due to higher margins per unit of $58 million, reflecting lower energy costs and higher market prices, and higher volumes of 31.4%; and

•a $25 million increase in retail utility margin primarily due to $17 million from higher customer usage; $9 million, net of energy costs, from higher recoveries through bill riders (offset in operations and maintenance expense and income tax benefit); and $1 million from the favorable impact of weather; partially offset by $2 million due to price impacts from changes in sales mix. Retail customer volumes increased 5.6%.

Natural gas utility margin increased $18 million, or 23%, for the first quarter of 2022 compared to 2021 primarily due to:

•an $8 million increase from lower refunds related to amortization of excess accumulated deferred income taxes arising from 2017 Tax Reform (offset in income tax benefit);

•a $5 million increase from higher average prices primarily due to the timing of recoveries through a capital tracker mechanism; and

•a $4 million increase from the favorable impact of weather.

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Depreciation and amortization for the first quarter of 2022 increased $43 million, or 21%, compared to 2021 primarily due to $42 million from higher Iowa revenue sharing accruals, $7 million from wind-powered generating facilities and other plant placed in-service and $6 million from a regulatory mechanism that provides customers the retail energy benefits of certain wind-powered generation projects, partially offset by $12 million from a regulatory mechanism deferring certain depreciation expense in 2022.

Allowance for borrowed and equity funds increased $11 million, or 138%, for the first quarter of 2022 compared to 2021 primarily due to higher construction work-in-progress balances related to wind- and solar-powered generation.

Other, net decreased $14 million, or 127%, for the first quarter of 2022 compared to 2021 primarily due to unfavorable investment earnings, largely attributable to lower cash surrender values of corporate-owned life insurance policies, and higher non-service costs of postretirement employee benefit plans.

Income tax benefit increased $52 million, or 34%, for the first quarter of 2022 compared to 2021, and the effective tax rate was (542)% for 2022 and 2,200% for 2021. The change in the effective tax rates for 2022 compared to 2021 was primarily due to higher PTCs, the timing of state income tax benefits and the effects of ratemaking, partially offset by higher pretax income. PTCs for the first quarter of 2022 and 2021 totaled $203 million and $151 million, respectively.

MidAmerican Funding -

Income tax benefit increased $52 million, or 33%, for the first quarter of 2022 compared to 2021, and the effective tax rate was (630)% for 2022 and 1,300% for 2021. The changes in the effective tax rates were principally due to the factors discussed for MidAmerican Energy.

Liquidity and Capital Resources

As of March 31, 2022, the total net liquidity for MidAmerican Energy and MidAmerican Funding was as follows (in millions):

MidAmerican Energy:
Cash and cash equivalents	$	131
Credit facilities, maturing 2022 and 2024	1,505
Less:
Tax-exempt bond support	(370)
Net credit facilities	1,135
MidAmerican Energy total net liquidity	$	1,266
MidAmerican Funding:
MidAmerican Energy total net liquidity	$	1,266
Cash and cash equivalents	1
MHC, Inc. credit facility, maturing 2022	4
MidAmerican Funding total net liquidity	$	1,271

Operating Activities

MidAmerican Energy's net cash flows from operating activities for the three-month periods ended March 31, 2022 and 2021, were $360 million and $(85) million, respectively. MidAmerican Funding's net cash flows from operating activities for the three-month periods ended March 31, 2022 and 2021, were $353 million and $(92) million, respectively. Cash flows from operating activities reflect higher utility margins for MidAmerican Energy's regulated electric and natural gas businesses, lower payments to vendors and lower derivative collateral posted, partially offset by higher interest expense. Higher utility margins are largely attributable to the recovery of higher natural gas costs caused by the February 2021 polar vortex weather event.

The timing of MidAmerican Energy's income tax cash flows from period to period can be significantly affected by the estimated federal income tax payment methods and assumptions for each payment date.

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Investing Activities

MidAmerican Energy's net cash flows from investing activities for the three-month periods ended March 31, 2022 and 2021, were $(461) million and $(303) million, respectively. MidAmerican Funding's net cash flows from investing activities for the three-month periods ended March 31, 2022 and 2021, were $(461) million and $(303) million, respectively. Net cash flows from investing activities consist almost entirely of capital expenditures. Refer to "Future Uses of Cash" for further discussion of capital expenditures. Purchases and proceeds related to marketable securities substantially consist of activity within the Quad Cities Generating Station nuclear decommissioning trust and other trust investments.

Financing Activities

MidAmerican Energy's net cash flows from financing activities for the three-month periods ended March 31, 2022 and 2021 were $— million and $387 million, respectively. MidAmerican Funding's net cash flows from financing activities for the three-month periods ended March 31, 2022 and 2021, were $7 million and $394 million, respectively. Through its commercial paper program, MidAmerican Energy received $387 million in 2021. MidAmerican Funding received $8 million and $7 million in 2022 and 2021, respectively, through its note payable with BHE.

Debt Authorizations and Related Matters

Short-term Debt

MidAmerican Energy has authority from the FERC to issue through April 2, 2024, commercial paper and bank notes aggregating $1.5 billion at interest rates not to exceed the applicable London Interbank Offered Rate plus a spread of 400 basis points. MidAmerican Energy has a $1.5 billion unsecured credit facility expiring in June 2024. The credit facility, which supports MidAmerican Energy's commercial paper program and its variable-rate tax-exempt bond obligations and provides for the issuance of letters of credit, has a variable interest rate based on the Eurodollar rate or a base rate, at MidAmerican Energy's option, plus a spread that varies based on MidAmerican Energy's credit ratings for senior unsecured long-term debt securities. Additionally, MidAmerican Energy has a $5 million unsecured credit facility for general corporate purposes.

Long-term Debt and Preferred Stock

MidAmerican Energy currently has an effective automatic registration statement with the SEC to issue an indeterminate amount of long-term debt securities and preferred stock through June 13, 2024. MidAmerican Energy has authorization from the FERC to issue, through June 30, 2023, long-term debt securities up to an aggregate of $2.0 billion and preferred stock up to an aggregate of $500 million and from the Illinois Commerce Commission to issue long-term debt securities up to an aggregate of $350 million through August 20, 2022. Additionally, MidAmerican Energy has authority from the Illinois Commerce Commission through October 15, 2024, to issue $750 million of long-term debt securities for the purpose of refinancing $250 million of its 3.70% Senior notes due September 2023 and $500 million of its 2.40% Senior notes due October 2024.

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Future Uses of Cash

MidAmerican Energy and MidAmerican Funding have available a variety of sources of liquidity and capital resources, both internal and external, including net cash flows from operating activities, public and private debt offerings, the issuance of commercial paper, the use of unsecured revolving credit facilities and other sources. These sources are expected to provide funds required for current operations, capital expenditures, debt retirements and other capital requirements. The availability and terms under which MidAmerican Energy and MidAmerican Funding have access to external financing depends on a variety of factors, including regulatory approvals, their credit ratings, investors' judgment of risk and conditions in the overall capital markets, including the condition of the utility industry.

Capital Expenditures

MidAmerican Energy has significant future capital requirements. Capital expenditure needs are reviewed regularly by management and may change significantly as a result of these reviews, which may consider, among other factors, impacts to customers' rates; changes in environmental and other rules and regulations; outcomes of regulatory proceedings; changes in income tax laws; general business conditions; load projections; system reliability standards; the cost and efficiency of construction labor, equipment and materials; commodity prices; and the cost and availability of capital.

MidAmerican Energy's historical and forecast capital expenditures, each of which exclude amounts for non-cash equity AFUDC and other non-cash items, are as follows (in millions):

	Three-Month Periods				Annual
	Ended March 31,				Forecast
	2021		2022		2022
Wind generation	$	32	$	133	$	762
Electric distribution	46		54		260
Electric transmission	23		21		171
Solar generation	3		44		139
Other	194		207		681
Total	$	298	$	459	$	2,013

MidAmerican Energy's capital expenditures provided above consist of the following:

•Wind generation includes the construction, repowering and operation of wind-powered generating facilities in Iowa.

◦Construction of wind-powered generating facilities totaling $3 million for the three-month period ended March 31, 2022. Planned spending for the construction of additional wind-powered generating facilities totals $142 million for the remainder of 2022.

◦Repowering of wind-powered generating facilities totaling $120 million and $24 million for the three-month periods ended March 31, 2022 and 2021, respectively. Planned spending for the repowering of wind-powered generating facilities totals $386 million for the remainder of 2022. MidAmerican Energy expects its repowered facilities to meet Internal Revenue Service guidelines for the re-establishment of PTCs for 10 years from the date the facilities are placed in-service. The rate at which PTCs are re-established for a facility depends upon the date construction begins. Of the 812 MWs of current repowering projects not in-service as of March 31, 2022, 511 MWs are currently expected to qualify for 80% of the PTCs available for 10 years following each facility's return to service and 301 MWs are expected to qualify for 60% of such credits.

•Electric distribution includes expenditures for new facilities to meet retail demand growth and for replacement of existing facilities to maintain system reliability.

•Electric transmission includes expenditures to meet retail demand growth, upgrades to accommodate third-party generator requirements and replacement of existing facilities to maintain system reliability.

•Solar generation includes the construction of solar-powered generating facilities totaling 141 MWs of small- and utility-scale solar generation, with total spend of $44 million and $3 million for the three-month periods ended March 31, 2022 and 2021, respectively and planned spending of $96 million for the remainder of 2022.

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•Remaining expenditures primarily relate to routine expenditures for other generation, natural gas distribution, technology, facilities and other operational needs to serve existing and expected demand.

Material Cash Requirements

As of March 31, 2022, there have been no material changes outside the normal course of business in MidAmerican Energy's and MidAmerican Funding's material cash requirements from the information provided in Item 7 of their Annual Report on Form 10-K for the year ended December 31, 2021.

Quad Cities Generating Station Operating Status

Constellation Energy Corp. ("Constellation Energy," previously Exelon Generation Company, LLC, which was a subsidiary of Exelon Corporation prior to February 1, 2022), the operator of Quad Cities Generating Station Units 1 and 2 ("Quad Cities Station") of which MidAmerican Energy has a 25% ownership interest, announced on June 2, 2016, its intention to shut down Quad Cities Station on June 1, 2018. In December 2016, Illinois passed legislation creating a zero emission standard, which went into effect June 1, 2017. The zero emission standard requires the Illinois Power Agency to purchase ZECs and recover the costs from certain ratepayers in Illinois, subject to certain limitations. The proceeds from the ZECs will provide Constellation Energy additional revenue through 2027 as an incentive for continued operation of Quad Cities Station. MidAmerican Energy will not receive additional revenue from the subsidy.

The PJM Interconnection, L.L.C. ("PJM") capacity market includes a Minimum Offer Price Rule ("MOPR"). If a generation resource is subjected to a MOPR, its offer price in the market is adjusted to effectively remove the revenues it receives through a state government-provided financial support program, resulting in a higher offer that may not clear the capacity market. Prior to December 19, 2019, the PJM MOPR applied only to certain new gas-fired resources. An expanded PJM MOPR to include existing resources would require exclusion of ZEC compensation when bidding into future capacity auctions, resulting in an increased risk of Quad Cities Station not receiving capacity revenues in future auctions.

On December 19, 2019, the FERC issued an order requiring the PJM to broadly apply the MOPR to all new and existing resources, including nuclear. This greatly expanded the breadth and scope of the PJM's MOPR, which became effective as of the PJM's capacity auction for the 2022-2023 planning year in May 2021. While the FERC included some limited exemptions, no exemptions were available to state-supported nuclear resources, such as Quad Cities Station. The FERC provided no new mechanism for accommodating state-supported resources other than the existing Fixed Resource Requirement ("FRR") mechanism under which an entire utility zone would be removed from PJM's capacity auction along with sufficient resources to support the load in such zone. In response to the FERC's order, the PJM submitted a compliance filing on March 18, 2020, wherein the PJM proposed tariff language reflecting the FERC's directives and a schedule for resuming capacity auctions. On April 16, 2020, the FERC issued an order largely denying requests for rehearing of the FERC's December 2019 order but granting a few clarifications that required an additional PJM compliance filing, which the PJM submitted on June 1, 2020. A number of parties, including Constellation Energy, have filed petitions for review of the FERC's orders in this proceeding, which remain pending before the D.C. Circuit.

As a result, the MOPR applied to Quad Cities Station in the capacity auction for the 2022-2023 planning year, which prevented Quad Cities Station from clearing in that capacity auction.

At the direction of the PJM Board of Managers, the PJM and its stakeholders developed further MOPR reforms to ensure that the capacity market rules respect and accommodate state resource preferences such as the ZEC programs. The PJM filed related tariff revisions at the FERC on July 30, 2021, and, on September 29, 2021, the PJM's proposed MOPR reforms became effective by operation of law. Under the new tariff provisions, the MOPR will no longer apply to Quad Cities Station. Requests for rehearing of the FERC's notice establishing the effective date for the PJM's proposed market reforms were filed in October 2021 and denied by operation of law on November 4, 2021. Several parties have filed petitions for review of the FERC's orders in this proceeding, which remain pending before the Court of Appeals for the Third Circuit. Constellation Energy is strenuously opposing these appeals.

Assuming the continued effectiveness of the Illinois zero emission standard, Constellation Energy no longer considers Quad Cities Station to be at heightened risk for early retirement. However, to the extent the Illinois zero emission standard does not operate as expected over its full term, Quad Cities Station would be at heightened risk for early retirement. The FERC's December 19, 2019 order on the PJM MOPR may undermine the continued effectiveness of the Illinois zero emission standard unless the PJM adopts further changes to the MOPR or Illinois implements an FRR mechanism, under which Quad Cities Station would be removed from the PJM's capacity auction.

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Regulatory Matters

MidAmerican Energy is subject to comprehensive regulation. Refer to "Regulatory Matters" in Berkshire Hathaway Energy's Part I, Item 2 of this Form 10-Q for discussion regarding MidAmerican Energy's current regulatory matters.

Environmental Laws and Regulations

MidAmerican Energy is subject to federal, state and local laws and regulations regarding climate change, RPS, air and water quality, emissions performance standards, coal combustion byproduct disposal, hazardous and solid waste disposal, protected species and other environmental matters that have the potential to impact MidAmerican Energy's current and future operations. In addition to imposing continuing compliance obligations, these laws and regulations provide regulators with the authority to levy substantial penalties for noncompliance, including fines, injunctive relief and other sanctions. These laws and regulations are administered by various federal, state and local agencies. MidAmerican Energy believes it is in material compliance with all applicable laws and regulations, although many are subject to interpretation that may ultimately be resolved by the courts. Environmental laws and regulations continue to evolve, and MidAmerican Energy is unable to predict the impact of the changing laws and regulations on its operations and consolidated financial results.

Refer to "Environmental Laws and Regulations" in Berkshire Hathaway Energy's Part I, Item 2 of this Form 10-Q for additional information regarding environmental laws and regulations.

Critical Accounting Estimates

Certain accounting measurements require management to make estimates and judgments concerning transactions that will be settled several years in the future. Amounts recognized on the Financial Statements based on such estimates involve numerous assumptions subject to varying and potentially significant degrees of judgment and uncertainty and will likely change in the future as additional information becomes available. Estimates are used for, but not limited to, the accounting for the effects of certain types of regulation, derivatives, impairment of goodwill and long-lived assets, pension and other postretirement benefits, income taxes and revenue recognition - unbilled revenue. For additional discussion of MidAmerican Energy's and MidAmerican Funding's critical accounting estimates, see Item 7 of their Annual Report on Form 10-K for the year ended December 31, 2021. There have been no significant changes in MidAmerican Energy's and MidAmerican Funding's assumptions regarding critical accounting estimates since December 31, 2021.

99

Nevada Power Company and its subsidiaries

Consolidated Financial Section

100

PART I

Item 1.Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholder of

Nevada Power Company

Results of Review of Interim Financial Information

We have reviewed the accompanying consolidated balance sheet of Nevada Power Company and subsidiaries ("Nevada Power") as of March 31, 2022, the related consolidated statements of operations, changes in shareholder's equity, and cash flows for the three-month periods ended March 31, 2022 and 2021, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of Nevada Power as of December 31, 2021, and the related consolidated statements of operations, changes in shareholder's equity, and cash flows for the year then ended (not presented herein); and in our report dated February 25, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of Nevada Power's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to Nevada Power in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Deloitte & Touche LLP

Las Vegas, Nevada

April 29, 2022

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NEVADA POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Amounts in millions, except share data)

	As of
	March 31,		December 31,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	47	$	33
Trade receivables, net	187		227
Inventories	61		64
Regulatory assets	327		291
Prepayments	48		33
Other current assets	59		53
Total current assets	729		701
Property, plant and equipment, net	6,992		6,891
Regulatory assets	759		728
Other assets	431		432
Total assets	$	8,911	$	8,752
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable	$	224	$	242
Accrued interest	38		32
Accrued property, income and other taxes	30		29
Short-term debt	104		180
Regulatory liabilities	49		49
Customer deposits	45		44
Derivative contracts	88		55
Other current liabilities	59		62
Total current liabilities	637		693
Long-term debt	2,700		2,499
Finance lease obligations	306		310
Regulatory liabilities	1,083		1,100
Deferred income taxes	799		782
Other long-term liabilities	358		338
Total liabilities	5,883		5,722
Commitments and contingencies (Note 8)
Shareholder's equity:
Common stock - $1.00 stated value; 1,000 shares authorized, issued and outstanding	—		—
Additional paid-in capital	2,308		2,308
Retained earnings	722		724
Accumulated other comprehensive loss, net	(2)		(2)
Total shareholder's equity	3,028		3,030
Total liabilities and shareholder's equity	$	8,911	$	8,752
The accompanying notes are an integral part of the consolidated financial statements.

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NEVADA POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Amounts in millions)

	Three-Month Periods
	Ended March 31,
	2022		2021
Operating revenue	$	415	$	370
Operating expenses:
Cost of fuel and energy	212		165
Operations and maintenance	65		63
Depreciation and amortization	103		101
Property and other taxes	13		12
Total operating expenses	393		341
Operating income	22		29
Other income (expense):
Interest expense	(38)		(38)
Allowance for borrowed funds	1		1
Allowance for equity funds	3		1
Interest and dividend income	9		5
Other, net	1		4
Total other income (expense)	(24)		(27)
Net (loss) income	$	(2)	$	2
The accompanying notes are an integral part of these consolidated financial statements.

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NEVADA POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY (Unaudited)

(Amounts in millions, except shares)

								Accumulated
				Additional				Other		Total
	Common Stock			Paid-in		Retained		Comprehensive		Shareholder's
	Shares	Amount		Capital		Earnings		Loss, Net		Equity
Balance, December 31, 2020	1,000	$	—	$	2,308	$	634	$	(3)	$	2,939
Net income	—	—		—		2		—		2
Balance, March 31, 2021	1,000	$	—	$	2,308	$	636	$	(3)	$	2,941
Balance, December 31, 2021	1,000	$	—	$	2,308	$	724	$	(2)	$	3,030
Net loss	—	—		—		(2)		—		(2)
Balance, March 31, 2022	1,000	$	—	$	2,308	$	722	$	(2)	$	3,028
The accompanying notes are an integral part of these consolidated financial statements.

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NEVADA POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Amounts in millions)

	Three-Month Periods
	Ended March 31,
	2022		2021
Cash flows from operating activities:
Net (loss) income	$	(2)	$	2
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	103		101
Allowance for equity funds	(3)		(1)
Changes in regulatory assets and liabilities	(8)		(15)
Deferred income taxes and amortization of investment tax credits	5		(10)
Deferred energy	(51)		41
Amortization of deferred energy	13		—
Other, net	4		(1)
Changes in other operating assets and liabilities:
Trade receivables and other assets	33		41
Inventories	3		4
Accrued property, income and other taxes	(15)		3
Accounts payable and other liabilities	3		14
Net cash flows from operating activities	85		179
Cash flows from investing activities:
Capital expenditures	(189)		(106)
Net cash flows from investing activities	(189)		(106)
Cash flows from financing activities:
Proceeds from long-term debt	200		—
Net repayment of short-term debt	(76)		—
Other, net	(4)		(5)
Net cash flows from financing activities	120		(5)
Net change in cash and cash equivalents and restricted cash and cash equivalents	16		68
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period	45		36
Cash and cash equivalents and restricted cash and cash equivalents at end of period	$	61	$	104
The accompanying notes are an integral part of these consolidated financial statements.

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NEVADA POWER COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1)    General

Nevada Power Company, together with its subsidiaries ("Nevada Power"), is a wholly owned subsidiary of NV Energy, Inc. ("NV Energy"), a holding company that also owns Sierra Pacific Power Company and its subsidiaries ("Sierra Pacific") and certain other subsidiaries. Nevada Power is a U.S. regulated electric utility company serving retail customers, including residential, commercial and industrial customers, primarily in the Las Vegas, North Las Vegas, Henderson and adjoining areas. NV Energy is an indirect wholly owned subsidiary of Berkshire Hathaway Energy Company ("BHE"). BHE is a holding company based in Des Moines, Iowa that owns subsidiaries principally engaged in energy businesses. BHE is a consolidated subsidiary of Berkshire Hathaway Inc. ("Berkshire Hathaway").

The unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and the United States Securities and Exchange Commission's rules and regulations for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures required by GAAP for annual financial statements. Management believes the unaudited Consolidated Financial Statements contain all adjustments (consisting only of normal recurring adjustments) considered necessary for the fair presentation of the unaudited Consolidated Financial Statements as of March 31, 2022 and for the three-month periods ended March 31, 2022 and 2021. The Consolidated Statements of Comprehensive Income have been omitted as net income equals comprehensive income for the three-month periods ended March 31, 2022 and 2021. The results of operations for the three-month period ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year.

The preparation of the unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited Consolidated Financial Statements and the reported amounts of revenue and expenses during the period. Actual results may differ from the estimates used in preparing the unaudited Consolidated Financial Statements. Note 2 of Notes to Consolidated Financial Statements included in Nevada Power's Annual Report on Form 10-K for the year ended December 31, 2021 describes the most significant accounting policies used in the preparation of the unaudited Consolidated Financial Statements. There have been no significant changes in Nevada Power's assumptions regarding significant accounting estimates and policies during the three-month period ended March 31, 2022.

(2)    Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

Cash equivalents consist of funds invested in money market mutual funds, U.S. Treasury Bills and other investments with a maturity of three months or less when purchased. Cash and cash equivalents exclude amounts where availability is restricted by legal requirements, loan agreements or other contractual provisions. Restricted cash and cash equivalents consist of funds restricted by the Public Utilities Commission of Nevada ("PUCN") for a certain renewable energy contract. A reconciliation of cash and cash equivalents and restricted cash and cash equivalents as presented in the Consolidated Statements of Cash Flows is outlined below and disaggregated by the line items in which they appear on the Consolidated Balance Sheets (in millions):

	As of
	March 31,		December 31,
	2022		2021
Cash and cash equivalents	$	47	$	33
Restricted cash and cash equivalents included in other current assets	14		12
Total cash and cash equivalents and restricted cash and cash equivalents	$	61	$	45

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(3)    Property, Plant and Equipment, Net

Property, plant and equipment, net consists of the following (in millions):

		As of
	Depreciable Life	March 31,		December 31,
		2022		2021
Utility plant:
Generation	30 - 55 years	$	3,810	$	3,793
Transmission	45 - 70 years	1,508		1,503
Distribution	20 - 65 years	3,979		3,920
General and intangible plant	5 - 65 years	831		836
Utility plant		10,128		10,052
Accumulated depreciation and amortization		(3,478)		(3,406)
Utility plant, net		6,650		6,646
Other non-regulated, net of accumulated depreciation and amortization	45 years	1		1
Plant, net		6,651		6,647
Construction work-in-progress		341		244
Property, plant and equipment, net		$	6,992	$	6,891

(4)    Recent Financing Transactions

Long-Term Debt

In January 2022, Nevada Power entered into a $300 million secured delayed draw term loan facility maturing in January 2024. Amounts borrowed under the facility bear interest at variable rates based on the Secured Overnight Financing Rate or a base rate, at Nevada Power's option, plus a pricing margin. In January 2022, Nevada Power borrowed $200 million under the facility at an initial interest rate of 0.55%. Nevada Power may draw all or none of the remaining unused commitment through June 2022. Nevada Power used the proceeds to repay amounts outstanding under its existing secured credit facility and for general corporate purposes.

(5)    Employee Benefit Plans

Nevada Power is a participant in benefit plans sponsored by NV Energy. The NV Energy Retirement Plan includes a qualified pension plan ("Qualified Pension Plan") and a supplemental executive retirement plan and a restoration plan (collectively, "Non‑Qualified Pension Plans") that provide pension benefits for eligible employees. The NV Energy Comprehensive Welfare Benefit and Cafeteria Plan provides certain postretirement health care and life insurance benefits for eligible retirees ("Other Postretirement Plans") on behalf of Nevada Power. Amounts attributable to Nevada Power were allocated from NV Energy based upon the current, or in the case of retirees, previous, employment location. Offsetting regulatory assets and liabilities have been recorded related to the amounts not yet recognized as a component of net periodic benefit costs that will be included in regulated rates. Net periodic benefit costs not included in regulated rates are included in accumulated other comprehensive loss, net.

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Amounts receivable from (payable to) NV Energy are included on the Consolidated Balance Sheets and consist of the following (in millions):

	As of
	March 31,		December 31,
	2022		2021
Qualified Pension Plan:
Other non-current assets	$	42	$	42
Non-Qualified Pension Plans:
Other current liabilities	(1)		(1)
Other long-term liabilities	(8)		(8)
Other Postretirement Plans:
Other non-current assets	8		8

(6)    Risk Management and Hedging Activities

Nevada Power is exposed to the impact of market fluctuations in commodity prices and interest rates. Nevada Power is principally exposed to electricity, natural gas and coal market fluctuations primarily through Nevada Power's obligation to serve retail customer load in its regulated service territory. Nevada Power's load and generating facilities represent substantial underlying commodity positions. Exposures to commodity prices consist mainly of variations in the price of fuel required to generate electricity and wholesale electricity that is purchased and sold. Commodity prices are subject to wide price swings as supply and demand are impacted by, among many other unpredictable items, weather, market liquidity, generating facility availability, customer usage, storage, and transmission and transportation constraints. The actual cost of fuel and purchased power is recoverable through the deferred energy mechanism. Interest rate risk exists on variable-rate debt and future debt issuances. Nevada Power does not engage in proprietary trading activities.

Nevada Power has established a risk management process that is designed to identify, assess, manage and report on each of the various types of risk involved in its business. To mitigate a portion of its commodity price risk, Nevada Power uses commodity derivative contracts, which may include forwards, futures, options, swaps and other agreements, to effectively secure future supply or sell future production generally at fixed prices. Nevada Power manages its interest rate risk by limiting its exposure to variable interest rates primarily through the issuance of fixed-rate long-term debt and by monitoring market changes in interest rates. Additionally, Nevada Power may from time to time enter into interest rate derivative contracts, such as interest rate swaps or locks, to mitigate Nevada Power's exposure to interest rate risk. Nevada Power does not hedge all of its commodity price and interest rate risks, thereby exposing the unhedged portion to changes in market prices.

There have been no significant changes in Nevada Power's accounting policies related to derivatives. Refer to Note 7 for additional information on derivative contracts.

108

The following table, which excludes contracts that have been designated as normal under the normal purchases and normal sales exception afforded by GAAP, summarizes the fair value of Nevada Power's derivative contracts, on a gross basis, and reconciles those amounts presented on a net basis on the Consolidated Balance Sheets (in millions):

			Derivative
	Other		Contracts -		Other
	Current		Current		Long-term
	Assets		Liabilities		Liabilities		Total
As of March 31, 2022
Not designated as hedging contracts (1):
Commodity liabilities	$	—	$	(88)	$	(80)	$	(168)
Total derivative - net basis	$	—	$	(88)	$	(80)	$	(168)
As of December 31, 2021
Not designated as hedging contracts(1):
Commodity assets	$	4	$	—	$	—	$	4
Commodity liabilities	—		(55)		(62)		(117)
Total derivative - net basis	$	4	$	(55)	$	(62)	$	(113)

(1)Nevada Power's commodity derivatives not designated as hedging contracts are included in regulated rates. As of March 31, 2022 a regulatory asset of $168 million was recorded related to the net derivative liability of $168 million. As of December 31, 2021 a regulatory asset of $113 million was recorded related to the net derivative liability of $113 million.

Derivative Contract Volumes

The following table summarizes the net notional amounts of outstanding commodity derivative contracts with fixed price terms that comprise the mark-to-market values as of (in millions):

	Unit of	March 31,	December 31,
	Measure	2022	2021
Electricity purchases	Megawatt hours	3	1
Natural gas purchases	Decatherms	138	119

Credit Risk

Nevada Power is exposed to counterparty credit risk associated with wholesale energy supply and marketing activities with other utilities, energy marketing companies, financial institutions and other market participants. Credit risk may be concentrated to the extent Nevada Power's counterparties have similar economic, industry or other characteristics and due to direct and indirect relationships among the counterparties. Before entering into a transaction, Nevada Power analyzes the financial condition of each significant wholesale counterparty, establishes limits on the amount of unsecured credit to be extended to each counterparty and evaluates the appropriateness of unsecured credit limits on an ongoing basis. To further mitigate wholesale counterparty credit risk, Nevada Power enters into netting and collateral arrangements that may include margining and cross-product netting agreements and obtain third-party guarantees, letters of credit and cash deposits. If required, Nevada Power exercises rights under these arrangements, including calling on the counterparty's credit support arrangement.

Collateral and Contingent Features

In accordance with industry practice, certain wholesale agreements, including derivative contracts, contain credit support provisions that in part base certain collateral requirements on credit ratings for senior unsecured debt as reported by one or more of the recognized credit rating agencies. These agreements may either specifically provide bilateral rights to demand cash or other security if credit exposures on a net basis exceed specified rating-dependent threshold levels "credit-risk-related contingent features") or provide the right for counterparties to demand "adequate assurance" if there is a material adverse change in Nevada Power's creditworthiness. These rights can vary by contract and by counterparty. As of March 31, 2022, Nevada Power's credit ratings for its senior secured debt and its issuer credit ratings for senior unsecured debt from the recognized credit rating agencies were investment grade.

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The aggregate fair value of Nevada Power's derivative contracts in liability positions with specific credit-risk-related contingent features totaled $7 million and $6 million as of March 31, 2022 and December 31, 2021, respectively, which represents the amount of collateral to be posted if all credit risk related contingent features for derivative contracts in liability positions had been triggered. Nevada Power's collateral requirements could fluctuate considerably due to market price volatility, changes in credit ratings, changes in legislation or regulation or other factors.

(7)    Fair Value Measurements

The carrying value of Nevada Power's cash, certain cash equivalents, receivables, payables, accrued liabilities and short-term borrowings approximates fair value because of the short-term maturity of these instruments. Nevada Power has various financial assets and liabilities that are measured at fair value on the Consolidated Balance Sheets using inputs from the three levels of the fair value hierarchy. A financial asset or liability classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The three levels are as follows:

•Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that Nevada Power has the ability to access at the measurement date.

•Level 2 — Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

•Level 3 — Unobservable inputs reflect Nevada Power's judgments about the assumptions market participants would use in pricing the asset or liability since limited market data exists. Nevada Power develops these inputs based on the best information available, including its own data.

The following table presents Nevada Power's assets and liabilities recognized on the Consolidated Balance Sheets and measured at fair value on a recurring basis (in millions):

	Input Levels for Fair Value Measurements
	Level 1		Level 2		Level 3		Total
As of March 31, 2022:
Assets:
Money market mutual funds	$	43	$	—	$	—	$	43
Investment funds	3		—		—		3
	$	46	$	—	$	—	$	46
Liabilities - commodity derivatives	$	—	$	—	$	(168)	$	(168)
As of December 31, 2021:
Assets:
Commodity derivatives	$	—	$	—	$	4	$	4
Money market mutual funds	34		—		—		34
Investment funds	3		—		—		3
	$	37	$	—	$	4	$	41
Liabilities - commodity derivatives	$	—	$	—	$	(117)	$	(117)

110

Derivative contracts are recorded on the Consolidated Balance Sheets as either assets or liabilities and are stated at estimated fair value unless they are designated as normal purchases or normal sales and qualify for the exception afforded by GAAP. When available, the fair value of derivative contracts is estimated using unadjusted quoted prices for identical contracts in the market in which Nevada Power transacts. When quoted prices for identical contracts are not available, Nevada Power uses forward price curves. Forward price curves represent Nevada Power's estimates of the prices at which a buyer or seller could contract today for delivery or settlement at future dates. Nevada Power bases its forward price curves upon internally developed models, with internal and external fundamental data inputs. Market price quotations for certain electricity and natural gas trading hubs are not as readily obtainable due to markets that are not active. Given that limited market data exists for these contracts, Nevada Power uses forward price curves derived from internal models based on perceived pricing relationships to major trading hubs that are based on unobservable inputs. The model incorporates a mid-market pricing convention (the mid‑point price between bid and ask prices) as a practical expedient for valuing its assets and liabilities measured and reported at fair value. The determination of the fair value for derivative contracts not only includes counterparty risk, but also the impact of Nevada Power's nonperformance risk on its liabilities, which as of March 31, 2022 and December 31, 2021, had an immaterial impact to the fair value of its derivative contracts. As such, Nevada Power considers its derivative contracts to be valued using Level 3 inputs.

Nevada Power's investments in money market mutual funds and investment funds are stated at fair value. When available, a readily observable quoted market price or net asset value of an identical security in an active market is used to record the fair value.

The following table reconciles the beginning and ending balances of Nevada Power's commodity derivative assets and liabilities measured at fair value on a recurring basis using significant Level 3 inputs (in millions):

	Three-Month Periods
	Ended March 31,
	2022		2021
Beginning balance	$	(113)	$	15
Changes in fair value recognized in regulatory assets	(56)		11
Settlements	1		1
Ending balance	$	(168)	$	27

Nevada Power's long-term debt is carried at cost on the Consolidated Balance Sheets. The fair value of Nevada Power's long‑term debt is a Level 2 fair value measurement and has been estimated based upon quoted market prices, where available, or at the present value of future cash flows discounted at rates consistent with comparable maturities with similar credit risks. The carrying value of Nevada Power's variable-rate long-term debt approximates fair value because of the frequent repricing of these instruments at market rates. The following table presents the carrying value and estimated fair value of Nevada Power's long‑term debt (in millions):

	As of March 31, 2022				As of December 31, 2021
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Long-term debt	$	2,700	$	2,985	$	2,499	$	3,067

111

(8)    Commitments and Contingencies

Legal Matters

Nevada Power is party to a variety of legal actions arising out of the normal course of business. Plaintiffs occasionally seek punitive or exemplary damages. Nevada Power does not believe that such normal and routine litigation will have a material impact on its consolidated financial results.

Environmental Laws and Regulations

Nevada Power is subject to federal, state and local laws and regulations regarding climate change, renewable portfolio standards, air and water quality, emissions performance standards, coal combustion byproduct disposal, hazardous and solid waste disposal, protected species and other environmental matters that have the potential to impact Nevada Power's current and future operations. Nevada Power believes it is in material compliance with all applicable laws and regulations.

(9)    Revenue from Contracts with Customers

The following table summarizes Nevada Power's revenue from contracts with customers ("Customer Revenue") by line of business, with further disaggregation of retail by customer class (in millions):

	Three-Month Periods
	Ended March 31,
	2022		2021
Customer Revenue:
Retail:
Residential	$	214	$	196
Commercial	96		84
Industrial	78		63
Other	1		3
Total fully bundled	389		346
Distribution only service	5		5
Total retail	394		351
Wholesale, transmission and other	16		14
Total Customer Revenue	410		365
Other revenue	5		5
Total revenue	$	415	$	370

112

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations 

The following is management's discussion and analysis of certain significant factors that have affected the consolidated financial condition and results of operations of Nevada Power during the periods included herein. Explanations include management's best estimate of the impact of weather, customer growth, usage trends and other factors. This discussion should be read in conjunction with Nevada Power's historical unaudited Consolidated Financial Statements and Notes to Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q. Nevada Power's actual results in the future could differ significantly from the historical results.

Results of Operations for the First Quarter of 2022 and 2021

Overview

Net loss for the first quarter of 2022 was $2 million, a decrease of $4 million compared to 2021 primarily due to $3 million of lower other, net, mainly due to lower cash surrender value of corporate-owned life insurance policies, $2 million of lower utility margin, $2 million of higher operations and maintenance expenses, mainly due to higher plant operations and maintenance expenses and higher earnings sharing, and $2 million of higher depreciation and amortization, mainly due to higher plant placed in-service. Utility margin decreased primarily due to lower regulatory-related revenue deferrals and lower other retail revenue, partially offset by an increase in the average number of customers and favorable changes in customer usage patterns. These decreases are offset by $4 million of higher interest and dividend income, mainly from carrying charges on regulatory balances. Energy generated decreased 6% for the first quarter of 2022 compared to 2021 primarily due to lower natural gas-fueled generation. Wholesale electricity sales volumes increased 49% and purchased electricity volumes increased 30%.

Non-GAAP Financial Measure

Management utilizes various key financial measures that are prepared in accordance with GAAP, as well as non-GAAP financial measures such as, utility margin, to help evaluate results of operations. Utility margin is calculated as electric operating revenue less cost of fuel and energy, which are captions presented on the Consolidated Statements of Operations.

Nevada Power's cost of fuel and energy are directly recovered from its customers through regulatory recovery mechanisms and as a result, changes in Nevada Power's expenses result in comparable changes to revenue. As such, management believes utility margin more appropriately and concisely explains profitability rather than a discussion of revenue and cost of sales separately. Management believes the presentation of utility margin provides meaningful and valuable insight into the information management considers important to running the business and a measure of comparability to others in the industry.

Utility margin is not a measure calculated in accordance with GAAP and should be viewed as a supplement to, and not a substitute for, operating income which is the most directly comparable financial measure prepared in accordance with GAAP. The following table provides a reconciliation of utility margin to operating income (in millions):

	First Quarter
	2022		2021		Change
Utility margin:
Operating revenue	$	415	$	370	$	45	12	%
Cost of fuel and energy	212		165		47		28
Utility margin	203		205		(2)		(1)
Operations and maintenance	65		63		2		3
Depreciation and amortization	103		101		2		2
Property and other taxes	13		12		1		8
Operating income	$	22	$	29	$	(7)	(24)	%

113

Utility Margin

A comparison of key operating results related to utility margin is as follows:

	First Quarter
	2022		2021		Change
Utility margin (in millions):
Operating revenue	$	415	$	370	$	45	12	%
Cost of fuel and energy	212		165		47		28
Utility margin	$	203	$	205	$	(2)	(1)	%
Sales (GWhs):
Residential	1,585		1,587		(2)		—	%
Commercial	998		954		44		5
Industrial	1,175		1,057		118		11
Other	46		47		(1)		(2)
Total fully bundled(1)	3,804		3,645		159		4
Distribution only service	569		516		53		10
Total retail	4,373		4,161		212		5
Wholesale	125		84		41		49
Total GWhs sold	4,498		4,245		253		6	%
Average number of retail customers (in thousands)	995		978		17		2	%
Average revenue per MWh:
Retail - fully bundled(1)	$	102.11	$	95.01	$	7.10	7	%
Wholesale	$	42.91	$	49.42	$	(6.51)	(13)	%
Heating degree days	954		994		(40)		(4)	%
Cooling degree days	49		6		43		*
Sources of energy (GWhs)(2)(3):
Natural gas	2,378		2,534		(156)		(6)	%
Renewables	14		16		(2)		(13)
Total energy generated	2,392		2,550		(158)		(6)
Energy purchased	1,761		1,355		406		30
Total	4,153		3,905		248		6	%
Average cost of energy per MWh(4):
Energy generated	$	41.92	$	14.96	$	26.96	*
Energy purchased	$	63.27	$	93.84	$	(30.57)	(33)	%

*    Not meaningful

(1)    Fully bundled includes sales to customers for combined energy, transmission and distribution services.

(2)    The average cost of energy per MWh and sources of energy excludes 424 GWhs and 683 GWhs of gas generated energy that is purchased at cost by related parties for the first quarter of 2022 and 2021, respectively.

(3)    GWh amounts are net of energy used by the related generating facilities.

(4)    The average cost of energy per MWh includes only the cost of fuel associated with the generating facilities, purchased power and deferrals.

114

Quarter Ended March 31, 2022 Compared to Quarter Ended March 31, 2021

Utility margin decreased $2 million, or 1%, for the first quarter of 2022 compared to 2021 primarily due to:

•$2 million of lower energy efficiency program rates (offset in operations and maintenance expense);

•$2 million of lower regulatory-related revenue deferrals; and

•$2 million of lower other retail revenue.

The decrease in utility margin was offset by:

•$3 million of higher electric retail utility margin primarily due to higher retail customer volumes. Retail customer volumes, including distribution only service customers, increased 5.1% primarily due to an increase in the average number of customers and favorable changes in customer usage patterns, offset by the unfavorable impact of weather; and

•$1 million of higher transmission and wholesale revenue.

Operations and maintenance increased $2 million, or 3%, for the first quarter of 2022 compared to 2021 primarily due to higher plant operations and maintenance expenses and higher earnings sharing, partially offset by lower energy efficiency program costs (offset in operating revenue).

Depreciation and amortization increased $2 million, or 2%, for the first quarter of 2022 compared to 2021 primarily due to higher plant placed in-service.

Interest and dividend income increased $4 million, or 80%, for the first quarter of 2022 compared to 2021 primarily due to higher interest income, mainly from carrying charges on regulatory balances.

Other, net decreased $3 million, or 75%, for the first quarter of 2022 compared to 2021 primarily due to lower cash surrender value of corporate-owned life insurance policies.

Liquidity and Capital Resources

As of March 31, 2022, Nevada Power's total net liquidity was as follows (in millions):

Cash and cash equivalents	$	47
Credit facility	400
Less -
Short-term debt	(104)
Net credit facility	296
Delayed draw term loan facility	$	300
Less -
Long-term debt	(200)
Net delayed draw term loan facility	100
Total net liquidity	$	443
Credit facility and delayed draw term loan facility:
Maturity date	2024

115

Operating Activities

Net cash flows from operating activities for the three-month periods ended March 31, 2022 and 2021 were $85 million and $179 million, respectively. The change was primarily due to higher payments related to fuel and energy costs and the timing of payments for operating costs, partially offset by higher collections from customers.

Investing Activities

Net cash flows from investing activities for the three-month periods ended March 31, 2022 and 2021 were $(189) million and $(106) million, respectively. The change was primarily due to increased capital expenditures. Refer to "Future Uses of Cash" for further discussion of capital expenditures.

Financing Activities

Net cash flows from financing activities for the three-month periods ended March 31, 2022 and 2021 were $120 million and $(5) million, respectively. The change was primarily due to higher proceeds from the issuance of long-term debt, partially offset by higher repayments of short-term debt.

Long-Term Debt

In January 2022, Nevada Power entered into a $300 million secured delayed draw term loan facility maturing in January 2024. Amounts borrowed under the facility bear interest at variable rates based on the Secured Overnight Financing Rate or a base rate, at Nevada Power's option, plus a pricing margin. In January 2022, Nevada Power borrowed $200 million under the facility at an initial interest rate of 0.55%. Nevada Power may draw all or none of the remaining unused commitment through June 2022. Nevada Power used the proceeds to repay amounts outstanding under its existing secured credit facility and for general corporate purposes.

Debt Authorizations

Nevada Power currently has financing authority from the PUCN consisting of the ability to: (1) establish debt issuances limited to a debt ceiling of $3.8 billion (excluding borrowings under Nevada Power's $400 million secured credit facility); and (2) maintain a revolving credit facility of up to $1.3 billion. Nevada Power currently has an effective automatic shelf registration statement with the SEC to issue an indeterminate amount of general and refunding mortgage securities through October 2022.

Future Uses of Cash

Nevada Power has available a variety of sources of liquidity and capital resources, both internal and external, including net cash flows from operating activities, public and private debt offerings, the use of its secured revolving credit facility, capital contributions and other sources. These sources are expected to provide funds required for current operations, capital expenditures, debt retirements and other capital requirements. The availability and terms under which Nevada Power has access to external financing depends on a variety of factors, including regulatory approvals, Nevada Power's credit ratings, investors' judgment of risk and conditions in the overall capital markets, including the condition of the utility industry.

116

Capital Expenditures

Capital expenditure needs are reviewed regularly by management and may change significantly as a result of these reviews, which may consider, among other factors, changes in environmental and other rules and regulations; impacts to customers' rates; outcomes of regulatory proceedings; changes in income tax laws; general business conditions; load projections; system reliability standards; the cost and efficiency of construction labor, equipment and materials; commodity prices; and the cost and availability of capital. Prudently incurred expenditures for compliance-related items such as pollution control technologies, replacement generation and associated operating costs are generally incorporated into Nevada Power's regulated retail rates.

Historical and forecast capital expenditures, each of which exclude amounts for non-cash equity AFUDC and other non-cash items are as follows (in millions):

	Three-Month Periods				Annual
	Ended March 31,				Forecast
	2021		2022		2022
Electric distribution	$	41	$	51	$	223
Electric transmission	13		21		168
Solar generation	1		7		80
Other	51		110		386
Total	$	106	$	189	$	857

Nevada Power received PUCN approval through its recent IRP filings for an increase in solar generation and electric transmission. Nevada Power has included estimates from its latest IRP filing in its forecast capital expenditures for 2022. These estimates may change as a result of the RFP process. Nevada Power's historical and forecast capital expenditures include the following:

•Electric distribution includes both growth projects and operating expenditures consisting of routine expenditures for distribution needed to serve existing and expected demand.

•Electric transmission includes both growth projects and operating expenditures. Growth projects primarily relate to the Nevada Utilities' Greenlink Nevada transmission expansion program. In this project, the company has received approval from the PUCN to build a 350-mile, 525-kV transmission line, known as Greenlink West, connecting the Ft. Churchill substation to the Northwest substation to the Harry Allen substation; a 235-mile, 525-kV transmission line, known as Greenlink North, connecting the new Ft. Churchill substation to the Robinson Summit substation; a 46-mile, 345-kV transmission line from the new Ft. Churchill substation to the Mira Loma substations; and a 38-mile, 345-kV transmission line from the new Ft. Churchill substation to the Robinson Summit substations. Operating expenditures consist of routine expenditures for transmission and other infrastructure needed to serve existing and expected demand.

•Solar generation investment includes expenditures for a 150-MW solar photovoltaic facility with an additional 100 MWs of co-located battery storage that will be developed in Clark County, Nevada. Commercial operation is expected by the end of 2023.

•Other includes both growth projects and operating expenditures consisting of turbine upgrades at several generating facilities, routine expenditures for generation, other operating projects and other infrastructure needed to serve existing and expected demand.

Material Cash Requirements

As of March 31, 2022, there have been no material changes outside the normal course of business in material cash requirements from the information provided in Item 7 of Nevada Power's Annual Report on Form 10-K for the year ended December 31, 2021.

117

Regulatory Matters

Nevada Power is subject to comprehensive regulation. Refer to "Regulatory Matters" in Berkshire Hathaway Energy's Part I, Item 2 of this Form 10-Q for discussion regarding Nevada Power's current regulatory matters.

Environmental Laws and Regulations

Nevada Power is subject to federal, state and local laws and regulations regarding climate change, RPS, air and water quality, emissions performance standards, coal combustion byproduct disposal, hazardous and solid waste disposal, protected species and other environmental matters that have the potential to impact Nevada Power's current and future operations. In addition to imposing continuing compliance obligations, these laws and regulations provide regulators with the authority to levy substantial penalties for noncompliance, including fines, injunctive relief and other sanctions. These laws and regulations are administered by various federal, state and local agencies. Nevada Power believes it is in material compliance with all applicable laws and regulations, although many are subject to interpretation that may ultimately be resolved by the courts. Environmental laws and regulations continue to evolve, and Nevada Power is unable to predict the impact of the changing laws and regulations on its operations and consolidated financial results.

Refer to "Environmental Laws and Regulations" in Berkshire Hathaway Energy's Part I, Item 2 of this Form 10-Q for additional information regarding environmental laws and regulations.

Critical Accounting Estimates

Certain accounting measurements require management to make estimates and judgments concerning transactions that will be settled several years in the future. Amounts recognized on the Consolidated Financial Statements based on such estimates involve numerous assumptions subject to varying and potentially significant degrees of judgment and uncertainty and will likely change in the future as additional information becomes available. Estimates are used for, but not limited to, the accounting for the effects of certain types of regulation, derivatives, impairment of long-lived assets, income taxes and revenue recognition - unbilled revenue. For additional discussion of Nevada Power's critical accounting estimates, see Item 7 of Nevada Power's Annual Report on Form 10‑K for the year ended December 31, 2021. There have been no significant changes in Nevada Power's assumptions regarding critical accounting estimates since December 31, 2021.

118

Sierra Pacific Power Company and its subsidiaries

Consolidated Financial Section

119

PART I

Item 1.Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholder of

Sierra Pacific Power Company

Results of Review of Interim Financial Information

We have reviewed the accompanying consolidated balance sheet of Sierra Pacific Power Company and subsidiaries ("Sierra Pacific") as of March 31, 2022, the related consolidated statements of operations, changes in shareholder's equity, and cash flows for the three-month periods ended March 31, 2022 and 2021, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of Sierra Pacific as of December 31, 2021, and the related consolidated statements of operations, changes in shareholder's equity, and cash flows for the year then ended (not presented herein); and in our report dated February 25, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of Sierra Pacific's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to Sierra Pacific in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Deloitte & Touche LLP

Las Vegas, Nevada

April 29, 2022

120

SIERRA PACIFIC POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Amounts in millions, except share data)

	As of
	March 31,		December 31,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	15	$	10
Trade receivables, net	120		128
Inventories	71		65
Regulatory assets	164		177
Other current assets	36		35
Total current assets	406		415
Property, plant and equipment, net	3,386		3,340
Regulatory assets	282		263
Other assets	205		205
Total assets	$	4,279	$	4,223
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable	$	125	$	147
Accrued property, income and other taxes	28		16
Short-term debt	57		159
Regulatory liabilities	20		19
Customer deposits	16		15
Derivative contracts	28		16
Other current liabilities	39		42
Total current liabilities	313		414
Long-term debt	1,164		1,164
Regulatory liabilities	440		444
Deferred income taxes	401		402
Other long-term liabilities	268		264
Total liabilities	2,586		2,688
Commitments and contingencies (Note 9)
Shareholder's equity:
Common stock - $3.75 stated value, 20,000,000 shares authorized and 1,000 issued and outstanding	—		—
Additional paid-in capital	1,241		1,111
Retained earnings	453		425
Accumulated other comprehensive loss, net	(1)		(1)
Total shareholder's equity	1,693		1,535
Total liabilities and shareholder's equity	$	4,279	$	4,223
The accompanying notes are an integral part of the consolidated financial statements.

121

SIERRA PACIFIC POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Amounts in millions)

	Three-Month Periods
	Ended March 31,
	2022		2021
Operating revenue:
Regulated electric	$	227	$	181
Regulated natural gas	52		39
Total operating revenue	279		220
Operating expenses:
Cost of fuel and energy	124		82
Cost of natural gas purchased for resale	34		21
Operations and maintenance	41		36
Depreciation and amortization	36		36
Property and other taxes	6		6
Total operating expenses	241		181
Operating income	38		39
Other income (expense):
Interest expense	(13)		(14)
Allowance for borrowed funds	1		—
Allowance for equity funds	2		1
Interest and dividend income	3		2
Other, net	2		4
Total other income (expense)	(5)		(7)
Income before income tax expense	33		32
Income tax expense	5		4
Net income	$	28	$	28
The accompanying notes are an integral part of these consolidated financial statements.

122

SIERRA PACIFIC POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY (Unaudited)

(Amounts in millions, except shares)

								Accumulated
				Additional				Other		Total
	Common Stock			Paid-in		Retained		Comprehensive		Shareholder's
	Shares	Amount		Capital		Earnings		Loss, Net		Equity
Balance, December 31, 2020	1,000	$	—	$	1,111	$	301	$	(1)	$	1,411
Net income	—	—		—		28		—		28
Balance, March 31, 2021	1,000	$	—	$	1,111	$	329	$	(1)	$	1,439
Balance, December 31, 2021	1,000	$	—	$	1,111	$	425	$	(1)	$	1,535
Net income	—	—		—		28		—		28
Contributions	—	—		130		—		—		130
Balance, March 31, 2022	1,000	$	—	$	1,241	$	453	$	(1)	$	1,693
The accompanying notes are an integral part of these consolidated financial statements.

123

SIERRA PACIFIC POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Amounts in millions)

	Three-Month Periods
	Ended March 31,
	2022		2021
Cash flows from operating activities:
Net income	$	28	$	28
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	36		36
Allowance for equity funds	(2)		(1)
Changes in regulatory assets and liabilities	(4)		(13)
Deferred income taxes and amortization of investment tax credits	(3)		4
Deferred energy	(7)		(18)
Amortization of deferred energy	23		(3)
Changes in other operating assets and liabilities:
Trade receivables and other assets	12		8
Inventories	(6)		3
Accrued property, income and other taxes	7		(3)
Accounts payable and other liabilities	(21)		1
Net cash flows from operating activities	63		42
Cash flows from investing activities:
Capital expenditures	(83)		(61)
Net cash flows from investing activities	(83)		(61)
Cash flows from financing activities:
Net (repayment of) proceeds from short-term debt	(102)		10
Contributions from parent	130		—
Other, net	(2)		(2)
Net cash flows from financing activities	26		8
Net change in cash and cash equivalents and restricted cash and cash equivalents	6		(11)
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period	16		26
Cash and cash equivalents and restricted cash and cash equivalents at end of period	$	22	$	15
The accompanying notes are an integral part of these consolidated financial statements.

124

SIERRA PACIFIC POWER COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1)    General

Sierra Pacific Power Company, together with its subsidiaries ("Sierra Pacific"), is a wholly owned subsidiary of NV Energy, Inc. ("NV Energy"), a holding company that also owns Nevada Power Company and its subsidiaries ("Nevada Power") and certain other subsidiaries. Sierra Pacific is a U.S. regulated electric utility company serving retail customers, including residential, commercial and industrial customers and regulated retail natural gas customers primarily in northern Nevada. NV Energy is an indirect wholly owned subsidiary of Berkshire Hathaway Energy Company ("BHE"). BHE is a holding company based in Des Moines, Iowa that owns subsidiaries principally engaged in energy businesses. BHE is a consolidated subsidiary of Berkshire Hathaway Inc. ("Berkshire Hathaway").

The unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and the United States Securities and Exchange Commission's rules and regulations for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures required by GAAP for annual financial statements. Management believes the unaudited Consolidated Financial Statements contain all adjustments (consisting only of normal recurring adjustments) considered necessary for the fair presentation of the unaudited Consolidated Financial Statements as of March 31, 2022 and for the three-month periods ended March 31, 2022 and 2021. The Consolidated Statements of Comprehensive Income have been omitted as net income equals comprehensive income for the three-month periods ended March 31, 2022 and 2021. The results of operations for the three-month period ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year.

The preparation of the unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited Consolidated Financial Statements and the reported amounts of revenue and expenses during the period. Actual results may differ from the estimates used in preparing the unaudited Consolidated Financial Statements. Note 2 of Notes to Consolidated Financial Statements included in Sierra Pacific's Annual Report on Form 10-K for the year ended December 31, 2021 describes the most significant accounting policies used in the preparation of the unaudited Consolidated Financial Statements. There have been no significant changes in Sierra Pacific's assumptions regarding significant accounting estimates and policies during the three-month period ended March 31, 2022.

(2)    Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

Cash equivalents consist of funds invested in money market mutual funds, U.S. Treasury Bills and other investments with a maturity of three months or less when purchased. Cash and cash equivalents exclude amounts where availability is restricted by legal requirements, loan agreements or other contractual provisions. Restricted cash and cash equivalents consist of funds restricted by the Public Utilities Commission of Nevada ("PUCN") for a certain renewable energy contract. A reconciliation of cash and cash equivalents and restricted cash and cash equivalents as presented in the Consolidated Statements of Cash Flows is outlined below and disaggregated by the line items in which they appear on the Consolidated Balance Sheets (in millions):

	As of
	March 31,		December 31,
	2022		2021
Cash and cash equivalents	$	15	$	10
Restricted cash and cash equivalents included in other current assets	7		6
Total cash and cash equivalents and restricted cash and cash equivalents	$	22	$	16

125

(3)    Property, Plant and Equipment, Net

Property, plant and equipment, net consists of the following (in millions):

		As of
	Depreciable Life	March 31,		December 31,
		2022		2021
Utility plant:
Electric generation	25 - 60 years	$	1,169	$	1,163
Electric transmission	50 - 100 years	937		940
Electric distribution	20 - 100 years	1,885		1,846
Electric general and intangible plant	5 - 70 years	206		204
Natural gas distribution	35 - 70 years	445		438
Natural gas general and intangible plant	5 - 70 years	14		14
Common general	5 - 70 years	370		370
Utility plant		5,026		4,975
Accumulated depreciation and amortization		(1,878)		(1,854)
Utility plant, net		3,148		3,121
Construction work-in-progress		238		219
Property, plant and equipment, net		$	3,386	$	3,340

(4)    Recent Financing Transactions

Long-Term Debt

In April 2022, Sierra Pacific entered into a $200 million unsecured loan with NV Energy payable upon demand. The net proceeds were used to purchase certain tax-exempt refunding revenue bond obligations that were subject to mandatory purchase by Sierra Pacific in April 2022. The loan has an underlying variable interest rate based on 30-day U.S. dollar deposits offered on the London Interbank Offer Rate market plus a spread of 0.75%.

In April 2022, Sierra Pacific purchased the following series of bonds that were held by the public: $30 million of its variable-rate tax-exempt Water Facilities Refunding Revenue Bonds, Series 2016C, due 2036; $25 million of its variable-rate tax-exempt Water Facilities Refunding Revenue Bonds, Series 2016D, due 2036; $25 million of its variable-rate tax-exempt Water Facilities Refunding Revenue Bonds, Series 2016E, due 2036; $75 million of its variable-rate tax-exempt Water Facilities Refunding Revenue Bonds, Series 2016F, due 2036; $20 million of its variable-rate tax-exempt Water Facilities Refunding Revenue Bonds, Series 2016G, due 2036; and $30 million of its variable-rate tax-exempt Pollution Control Refunding Revenue Bonds, Series 2016B, due 2029. Sierra Pacific purchased these bonds as required by the bond indentures. Sierra Pacific is holding these bonds and can re-offer them at a future date.

(5)    Income Taxes

A reconciliation of the federal statutory income tax rate to the effective income tax rate applicable to income before income tax expense is as follows:

	Three-Month Periods
	Ended March 31,
	2022		2021
Federal statutory income tax rate	21	%	21	%
Effects of ratemaking	(7)		(10)
Other	1		2
Effective income tax rate	15	%	13	%

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Effects of ratemaking is primarily attributable to the recognition of excess deferred income taxes related to the 2017 Tax Cuts and Jobs Act pursuant to an order issued by the PUCN effective January 1, 2020.

(6)    Employee Benefit Plans

Sierra Pacific is a participant in benefit plans sponsored by NV Energy. The NV Energy Retirement Plan includes a qualified pension plan ("Qualified Pension Plan") and a supplemental executive retirement plan and a restoration plan (collectively, "Non‑Qualified Pension Plans") that provide pension benefits for eligible employees. The NV Energy Comprehensive Welfare Benefit and Cafeteria Plan provides certain postretirement health care and life insurance benefits for eligible retirees ("Other Postretirement Plans") on behalf of Sierra Pacific. Sierra Pacific contributed $2 million to the Other Postretirement Plans for the three-month period ended March 31, 2022. Amounts attributable to Sierra Pacific were allocated from NV Energy based upon the current, or in the case of retirees, previous, employment location. Offsetting regulatory assets and liabilities have been recorded related to the amounts not yet recognized as a component of net periodic benefit costs that will be included in regulated rates. Net periodic benefit costs not included in regulated rates are included in accumulated other comprehensive loss, net.

Amounts receivable from (payable to) NV Energy are included on the Consolidated Balance Sheets and consist of the following (in millions):

	As of
	March 31,		December 31,
	2022		2021
Qualified Pension Plan:
Other non-current assets	$	63	$	62
Non-Qualified Pension Plans:
Other current liabilities	(1)		(1)
Other long-term liabilities	(7)		(7)
Other Postretirement Plans:
Other long-term liabilities	(8)		(10)

(7)    Risk Management and Hedging Activities

Sierra Pacific is exposed to the impact of market fluctuations in commodity prices and interest rates. Sierra Pacific is principally exposed to electricity, natural gas and coal market fluctuations primarily through Sierra Pacific's obligation to serve retail customer load in its regulated service territory. Sierra Pacific's load and generating facilities represent substantial underlying commodity positions. Exposures to commodity prices consist mainly of variations in the price of fuel required to generate electricity and wholesale electricity that is purchased and sold. Commodity prices are subject to wide price swings as supply and demand are impacted by, among many other unpredictable items, weather, market liquidity, generating facility availability, customer usage, storage, and transmission and transportation constraints. The actual cost of fuel and purchased power is recoverable through the deferred energy mechanism. Interest rate risk exists on variable-rate debt and future debt issuances. Sierra Pacific does not engage in proprietary trading activities.

Sierra Pacific has established a risk management process that is designed to identify, assess, manage and report on each of the various types of risk involved in its business. To mitigate a portion of its commodity price risk, Sierra Pacific uses commodity derivative contracts, which may include forwards, futures, options, swaps and other agreements, to effectively secure future supply or sell future production generally at fixed prices. Sierra Pacific manages its interest rate risk by limiting its exposure to variable interest rates primarily through the issuance of fixed-rate long-term debt and by monitoring market changes in interest rates. Additionally, Sierra Pacific may from time to time enter into interest rate derivative contracts, such as interest rate swaps or locks, to mitigate Sierra Pacific's exposure to interest rate risk. Sierra Pacific does not hedge all of its commodity price and interest rate risks, thereby exposing the unhedged portion to changes in market prices.

There have been no significant changes in Sierra Pacific's accounting policies related to derivatives. Refer to Note 8 for additional information on derivative contracts.

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The following table, which excludes contracts that have been designated as normal under the normal purchases and normal sales exception afforded by GAAP, summarizes the fair value of Sierra Pacific's derivative contracts, on a gross basis, and reconciles those amounts presented on a net basis on the Consolidated Balance Sheets (in millions):

			Derivative
	Other		Contracts -		Other
	Current		Current		Long-term
	Assets		Liabilities		Liabilities		Total
As of March 31, 2022
Not designated as hedging contracts (1):
Commodity assets	$	1	$	—	$	—	$	1
Commodity liabilities	—		(28)		(25)		(53)
Total derivative - net basis	$	1	$	(28)	$	(25)	$	(52)
As of December 31, 2021
Not designated as hedging contracts(1):
Commodity assets	$	2	$	—	$	—	$	2
Commodity liabilities	—		(16)		(19)		(35)
Total derivative - net basis	$	2	$	(16)	$	(19)	$	(33)

(1)Sierra Pacific's commodity derivatives not designated as hedging contracts are included in regulated rates. As of March 31, 2022 a net regulatory asset of $52 million was recorded related to the net derivative liability of $52 million. As of December 31, 2021 a net regulatory asset of $33 million was recorded related to the net derivative liability of $33 million.

The following table summarizes the net notional amounts of outstanding commodity derivative contracts with fixed price terms that comprise the mark-to-market values as of (in millions):

	Unit of	March 31,	December 31,
	Measure	2022	2021
Electricity purchases	Megawatt hours	1	1
Natural gas purchases	Decatherms	60	53

Credit Risk

Sierra Pacific is exposed to counterparty credit risk associated with wholesale energy supply and marketing activities with other utilities, energy marketing companies, financial institutions and other market participants. Credit risk may be concentrated to the extent Sierra Pacific's counterparties have similar economic, industry or other characteristics and due to direct and indirect relationships among the counterparties. Before entering into a transaction, Sierra Pacific analyzes the financial condition of each significant wholesale counterparty, establishes limits on the amount of unsecured credit to be extended to each counterparty and evaluates the appropriateness of unsecured credit limits on an ongoing basis. To further mitigate wholesale counterparty credit risk, Sierra Pacific enters into netting and collateral arrangements that may include margining and cross-product netting agreements and obtain third-party guarantees, letters of credit and cash deposits. If required, Sierra Pacific exercises rights under these arrangements, including calling on the counterparty's credit support arrangement.

Collateral and Contingent Features

In accordance with industry practice, certain wholesale agreements, including derivative contracts, contain credit support provisions that in part base certain collateral requirements on credit ratings for senior unsecured debt as reported by one or more of the recognized credit rating agencies. These agreements may either specifically provide bilateral rights to demand cash or other security if credit exposures on a net basis exceed specified rating-dependent threshold levels ("credit-risk-related contingent features") or provide the right for counterparties to demand "adequate assurance" if there is a material adverse change in Sierra Pacific's creditworthiness. These rights can vary by contract and by counterparty. As of March 31, 2022, Sierra Pacific's credit ratings for its senior secured debt and its issuer credit ratings for senior unsecured debt from the recognized credit rating agencies were investment grade.

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The aggregate fair value of Sierra Pacific's derivative contracts in liability positions with specific credit-risk-related contingent features totaled $2 million and $— million as of March 31, 2022 and December 31, 2021, respectively, which represents the amount of collateral to be posted if all credit risk related contingent features for derivative contracts in liability positions had been triggered. Sierra Pacific's collateral requirements could fluctuate considerably due to market price volatility, changes in credit ratings, changes in legislation or regulation or other factors.

(8)    Fair Value Measurements

The carrying value of Sierra Pacific's cash, certain cash equivalents, receivables, payables, accrued liabilities and short-term borrowings approximates fair value because of the short-term maturity of these instruments. Sierra Pacific has various financial assets and liabilities that are measured at fair value on the Consolidated Balance Sheets using inputs from the three levels of the fair value hierarchy. A financial asset or liability classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The three levels are as follows:

•Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that Sierra Pacific has the ability to access at the measurement date.

•Level 2 — Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

•Level 3 — Unobservable inputs reflect Sierra Pacific's judgments about the assumptions market participants would use in pricing the asset or liability since limited market data exists. Sierra Pacific develops these inputs based on the best information available, including its own data.

The following table presents Sierra Pacific's assets and liabilities recognized on the Consolidated Balance Sheets and measured at fair value on a recurring basis (in millions):

	Input Levels for Fair Value Measurements
	Level 1		Level 2		Level 3		Total
As of March 31, 2022:
Assets:
Commodity derivatives	$	—	$	—	$	1	$	1
Money market mutual funds	13		—		—		13
Investment funds	1		—		—		1
	$	14	$	—	$	1	$	15
Liabilities - commodity derivatives	$	—	$	—	$	(53)	$	(53)
As of December 31, 2021:
Assets:
Commodity derivatives	$	—	$	—	$	2	$	2
Money market mutual funds	10		—		—		10
Investment funds	1		—		—		1
	$	11	$	—	$	2	$	13
Liabilities - commodity derivatives	$	—	$	—	$	(35)	$	(35)

Sierra Pacific's investments in money market mutual funds and investment funds are stated at fair value. When available, a readily observable quoted market price or net asset value of an identical security in an active market is used to record the fair value.

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The following table reconciles the beginning and ending balances of Sierra Pacific's commodity derivative assets and liabilities measured at fair value on a recurring basis using significant Level 3 inputs (in millions):

	Three-Month Periods
	Ended March 31,
	2022		2021
Beginning balance	$	(33)	$	7
Changes in fair value recognized in regulatory assets	(19)		5
Ending balance	$	(52)	$	12

Sierra Pacific's long-term debt is carried at cost on the Consolidated Balance Sheets. The fair value of Sierra Pacific's long-term debt is a Level 2 fair value measurement and has been estimated based upon quoted market prices, where available, or at the present value of future cash flows discounted at rates consistent with comparable maturities with similar credit risks. The carrying value of Sierra Pacific's variable-rate long-term debt approximates fair value because of the frequent repricing of these instruments at market rates. The following table presents the carrying value and estimated fair value of Sierra Pacific's long-term debt (in millions):

	As of March 31, 2022				As of December 31, 2021
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Long-term debt	$	1,164	$	1,261	$	1,164	$	1,316

(9)    Commitments and Contingencies

Legal Matters

Sierra Pacific is party to a variety of legal actions arising out of the normal course of business. Plaintiffs occasionally seek punitive or exemplary damages. Sierra Pacific does not believe that such normal and routine litigation will have a material impact on its consolidated financial results.

Environmental Laws and Regulations

Sierra Pacific is subject to federal, state and local laws and regulations regarding climate change, renewable portfolio standards, air and water quality, emissions performance standards, coal combustion byproduct disposal, hazardous and solid waste disposal, protected species and other environmental matters that have the potential to impact Sierra Pacific's current and future operations. Sierra Pacific believes it is in material compliance with all applicable laws and regulations.

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(10)    Revenue from Contracts with Customers

The following table summarizes Sierra Pacific's revenue from contracts with customers ("Customer Revenue") by line of business, with further disaggregation of retail by customer class, including a reconciliation to Sierra Pacific's reportable segment information included in Note 11 (in millions):

	Three-Month Periods
	Ended March 31,
	2022						2021
	Electric		Natural Gas		Total		Electric		Natural Gas		Total
Customer Revenue:
Retail:
Residential	$	85	$	32	$	117	$	71	$	25	$	96
Commercial	70		15		85		54		10		64
Industrial	49		4		53		39		3		42
Other	1		—		1		1		—		1
Total fully bundled	205		51		256		165		38		203
Distribution only service	1		—		1		1		—		1
Total retail	206		51		257		166		38		204
Wholesale, transmission and other	21		—		21		15		—		15
Total Customer Revenue	227		51		278		181		38		219
Other revenue	—		1		1		—		1		1
Total revenue	$	227	$	52	$	279	$	181	$	39	$	220

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(11)    Segment Information

Sierra Pacific has identified two reportable operating segments: regulated electric and regulated natural gas. The regulated electric segment derives most of its revenue from regulated retail sales of electricity to residential, commercial, and industrial customers and from wholesale sales. The regulated natural gas segment derives most of its revenue from regulated retail sales of natural gas to residential, commercial, and industrial customers and also obtains revenue by transporting natural gas owned by others through its distribution system. Pricing for regulated electric and regulated natural gas sales are established separately by the PUCN; therefore, management also reviews each segment separately to make decisions regarding allocation of resources and in evaluating performance.

The following tables provide information on a reportable segment basis (in millions):

	Three-Month Periods
	Ended March 31,
	2022		2021
Operating revenue:
Regulated electric	$	227	$	181
Regulated natural gas	52		39
Total operating revenue	$	279	$	220
Operating income:
Regulated electric	$	30	$	31
Regulated natural gas	8		8
Total operating income	38		39
Interest expense	(13)		(14)
Allowance for borrowed funds	1		—
Allowance for equity funds	2		1
Interest and dividend income	3		2
Other, net	2		4
Income before income tax expense	$	33	$	32

	As of
	March 31,		December 31,
	2022		2021
Assets:
Regulated electric	$	3,869	$	3,829
Regulated natural gas	375		365
Other(1)	35		29
Total assets	$	4,279	$	4,223

(1)    Consists principally of cash and cash equivalents not included in either the regulated electric or regulated natural gas segments.

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Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations 

The following is management's discussion and analysis of certain significant factors that have affected the consolidated financial condition and results of operations of Sierra Pacific during the periods included herein. Explanations include management's best estimate of the impact of weather, customer growth, usage trends and other factors. This discussion should be read in conjunction with Sierra Pacific's historical unaudited Consolidated Financial Statements and Notes to Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q. Sierra Pacific's actual results in the future could differ significantly from the historical results.

Results of Operations for the First Quarter of 2022 and 2021

Overview

Net income for the first quarter of 2022 was $28 million, consistent when compared to 2021 primarily due to $5 million of higher operations and maintenance expenses, mainly due to higher plant operations and maintenance expenses and higher earnings sharing, and $2 million of lower other, net, mainly due to lower cash surrender value of corporate-owned life insurance policies, partially offset by $4 million of higher electric utility margin, mainly from higher transmission and wholesale revenue, partially offset by lower regulatory-related revenue deferrals, higher allowance for equity funds, mainly due to higher construction work-in-progress, and higher interest and dividend income, mainly from carrying charges on regulatory balances. Energy generated increased 3% for the first quarter of 2022 compared to 2021 primarily due to higher coal-fueled generation, partially offset by lower natural gas-fueled generation. Wholesale electricity sales volumes increased 66% and purchased electricity volumes decreased 25%.

Non-GAAP Financial Measure

Management utilizes various key financial measures that are prepared in accordance with GAAP, as well as non-GAAP financial measures such as, electric utility margin and natural gas utility margin, to help evaluate results of operations. Electric utility margin is calculated as electric operating revenue less cost of fuel and energy while natural gas utility margin is calculated as natural gas operating revenue less cost of natural gas purchased for resale, which are captions presented on the Consolidated Statements of Operations.

Sierra Pacific's cost of fuel and energy and cost of natural gas purchased for resale are generally recovered from its customers through regulatory recovery mechanisms and as a result, changes in Sierra Pacific's expenses result in comparable changes to revenue. As such, management believes electric utility margin and natural gas utility margin more appropriately and concisely explain profitability rather than a discussion of revenue and cost of sales separately. Management believes the presentation of electric utility margin and natural gas utility margin provides meaningful and valuable insight into the information management considers important to running the business and a measure of comparability to others in the industry.

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Electric utility margin and natural gas utility margin are not measures calculated in accordance with GAAP and should be viewed as a supplement to, and not a substitute for, operating income which is the most directly comparable financial measure prepared in accordance with GAAP. The following table provides a reconciliation of utility margin to operating income (in millions):

	First Quarter
	2022		2021		Change
Electric utility margin:
Operating revenue	$	227	$	181	$	46	25	%
Cost of fuel and energy	124		82		42		51
Electric utility margin	103		99		4		4
Natural gas utility margin:
Operating revenue	52		39		13		33	%
Natural gas purchased for resale	34		21		13		62
Natural gas utility margin	18		18		—		—
Utility margin	121		117		4		3	%
Operations and maintenance	41		36		5		14	%
Depreciation and amortization	36		36		—		—
Property and other taxes	6		6		—		—
Operating income	$	38	$	39	$	(1)	(3)	%

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Electric Utility Margin

A comparison of key operating results related to electric utility margin is as follows:

	First Quarter
	2022		2021		Change
Utility margin (in millions):
Operating revenue	$	227	$	181	$	46	25	%
Cost of fuel and energy	124		82		42		51
Utility margin	$	103	$	99	$	4	4	%
Sales (GWhs):
Residential	663		671		(8)		(1)	%
Commercial	700		677		23		3
Industrial	755		897		(142)		(16)
Other	4		4		—		—
Total fully bundled(1)	2,122		2,249		(127)		(6)
Distribution only service	585		397		188		47
Total retail	2,707		2,646		61		2
Wholesale	291		175		116		66
Total GWhs sold	2,998		2,821		177		6	%
Average number of retail customers (in thousands)	369		363		6		2	%
Average revenue per MWh:
Retail - fully bundled(1)	$	96.40	$	73.17	$	23.23	32	%
Wholesale	$	51.14	$	60.18	$	(9.04)	(15)	%
Heating degree days	2,037		2,198		(161)		(7)	%
Sources of energy (GWhs)(2):
Natural gas	990		1,082		(92)		(9)	%
Coal	153		29		124		*
Renewables(3)	5		6		(1)		(17)
Total energy generated	1,148		1,117		31		3
Energy purchased	1,033		1,373		(340)		(25)
Total	2,181		2,490		(309)		(12)	%
Average cost of energy per MWh(4):
Energy generated	$	59.86	$	25.23	$	34.63	*
Energy purchased	$	53.19	$	38.93	$	14.26	37	%

*    Not meaningful

(1)    Fully bundled includes sales to customers for combined energy, transmission and distribution services.

(2)    GWh amounts are net of energy used by the related generating facilities.

(3)    Includes the Fort Churchill Solar Array which was under lease by Sierra Pacific until it was acquired in December 2021.

(4)    The average cost of energy per MWh includes only the cost of fuel associated with the generating facilities, purchased power and deferrals.

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Natural Gas Utility Margin

A comparison of key operating results related to natural gas utility margin is as follows:

	First Quarter
	2022		2021		Change
Utility margin (in millions):
Operating revenue	$	52	$	39	$	13	33	%
Natural gas purchased for resale	34		21		13		62
Utility margin	$	18	$	18	$	—	—	%
Sold (000's Dths):
Residential	4,552		4,658		(106)		(2)	%
Commercial	2,512		2,304		208		9
Industrial	653		745		(92)		(12)
Total retail	7,717		7,707		10		—	%
Average number of retail customers (in thousands)	179		176		3		2	%
Average revenue per retail Dth sold	$	6.69	$	5.03	$	1.66	33	%
Heating degree days	2,037		2,198		(161)		(7)	%
Average cost of natural gas per retail Dth sold	$	4.36	$	2.73	$	1.63	60	%

Quarter Ended March 31, 2022 Compared to Quarter Ended March 31, 2021

Electric utility margin increased $4 million, or 4%, for the first quarter of 2022 compared to 2021 primarily due to:

•$3 million of higher transmission and wholesale revenue;

•$2 million of higher energy efficiency implementation rates; and

•$1 million of higher electric retail utility margin primarily due to higher retail customer volumes. Retail customer volumes, including distribution only service customers, increased 2.3% primarily due to an increase in the average number of customers, offset by the unfavorable impact of weather.

The increase in utility margin was offset by:

•$1 million of lower regulatory-related revenue deferrals; and

•$1 million of lower energy efficiency programs rates (offset in operations and maintenance expense).

Operations and maintenance increased $5 million, or 14%, for the first quarter of 2022 compared to 2021 primarily due to higher plant operations and maintenance expenses and higher earnings sharing, partially offset by lower energy efficiency program costs (offset in operating revenue).

Allowance for equity funds increased $1 million for the first quarter of 2022 compared to 2021 primarily due to higher construction work-in progress.

Interest and dividend income increased $1 million for the first quarter of 2022 compared to 2021 primarily due to higher interest income, mainly from carrying charges on regulatory balances.

Other, net decreased $2 million, or 50%, for the first quarter of 2022 compared to 2021 primarily due to lower cash surrender value of corporate-owned life insurance policies.

Income tax expense increased $1 million, or 25%, for the first quarter of 2022 compared to 2021 primarily due to higher pretax income. The effective tax rate was 15% in 2022 and 13% in 2021.

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Liquidity and Capital Resources

As of March 31, 2022, Sierra Pacific's total net liquidity was as follows (in millions):

Cash and cash equivalents	$	15
Credit facility	250
Less -
Short-term debt	(57)
Net credit facility	193
Total net liquidity	$	208
Credit facility:
Maturity date	2024

Operating Activities

Net cash flows from operating activities for the three-month periods ended March 31, 2022 and 2021 were $63 million and $42 million, respectively. The change was primarily due to higher collections from customers, partially offset by higher payments related to fuel and energy costs, higher inventory purchases and the timing of payments for operating costs.

Investing Activities

Net cash flows from investing activities for the three-month periods ended March 31, 2022 and 2021 were $(83) million and $(61) million, respectively. The change was primarily due to increased capital expenditures. Refer to "Future Uses of Cash" for further discussion of capital expenditures.

Financing Activities

Net cash flows from financing activities for the three-month periods ended March 31, 2022 and 2021 were $26 million and $8 million, respectively. The change was primarily due to contributions from NV Energy, Inc., partially offset by higher repayments of short-term debt.

Long-Term Debt

In April 2022, Sierra Pacific entered into a $200 million unsecured loan with NV Energy payable upon demand. The net proceeds were used to purchase certain tax-exempt refunding revenue bond obligations that were subject to mandatory purchase by Sierra Pacific in April 2022. The loan has an underlying variable interest rate based on 30-day U.S. dollar deposits offered on the London Interbank Offer Rate market plus a spread of 0.75%.

In April 2022, Sierra Pacific purchased the following series of bonds that were held by the public: $30 million of its variable-rate tax-exempt Water Facilities Refunding Revenue Bonds, Series 2016C, due 2036; $25 million of its variable-rate tax-exempt Water Facilities Refunding Revenue Bonds, Series 2016D, due 2036; $25 million of its variable-rate tax-exempt Water Facilities Refunding Revenue Bonds, Series 2016E, due 2036; $75 million of its variable-rate tax-exempt Water Facilities Refunding Revenue Bonds, Series 2016F, due 2036; $20 million of its variable-rate tax-exempt Water Facilities Refunding Revenue Bonds, Series 2016G, due 2036; and $30 million of its variable-rate tax-exempt Pollution Control Refunding Revenue Bonds, Series 2016B, due 2029. Sierra Pacific purchased these bonds as required by the bond indentures. Sierra Pacific is holding these bonds and can re-offer them at a future date.

Debt Authorizations

Sierra Pacific currently has financing authority from the PUCN consisting of the ability to: (1) establish debt issuances limited to a debt ceiling of $1.9 billion (excluding borrowings under Sierra Pacific's $250 million secured credit facility); and (2) maintain a revolving credit facility of up to $600 million.

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Future Uses of Cash

Sierra Pacific has available a variety of sources of liquidity and capital resources, both internal and external, including net cash flows from operating activities, public and private debt offerings, the use of its secured revolving credit facility, capital contributions and other sources. These sources are expected to provide funds required for current operations, capital expenditures, debt retirements and other capital requirements. The availability and terms under which Sierra Pacific has access to external financing depends on a variety of factors, including regulatory approvals, Sierra Pacific's credit ratings, investors' judgment of risk and conditions in the overall capital markets, including the condition of the utility industry.

Capital Expenditures

Capital expenditure needs are reviewed regularly by management and may change significantly as a result of these reviews, which may consider, among other factors, changes in environmental and other rules and regulations; impacts to customers' rates; outcomes of regulatory proceedings; changes in income tax laws; general business conditions; load projections; system reliability standards; the cost and efficiency of construction labor, equipment and materials; commodity prices; and the cost and availability of capital. Prudently incurred expenditures for compliance-related items such as pollution-control technologies, replacement generation and associated operating costs are generally incorporated into Sierra Pacific's regulated retail rates.

Historical and forecast capital expenditures, each of which exclude amounts for non-cash equity AFUDC and other non-cash items are as follows (in millions):

	Three-Month Periods				Annual
	Ended March 31,				Forecast
	2021		2022		2022
Electric distribution	$	20	$	20	$	125
Electric transmission	16		20		128
Solar generation	—		—		1
Other	25		43		171
Total	$	61	$	83	$	425

Sierra Pacific received PUCN approval through its recent IRP filings for an increase in solar generation and electric transmission. Sierra Pacific has included estimates from its latest IRP filing in its forecast capital expenditures for 2022. These estimates may change as a result of the RFP process. Sierra Pacific's historical and forecast capital expenditures include the following:

•Electric distribution includes both growth projects and operating expenditures consisting of routine expenditures for distribution needed to serve existing and expected demand.

•Electric transmission includes both growth projects and operating expenditures. Growth projects primarily relate to the Nevada Utilities' Greenlink Nevada transmission expansion program. In this project, the company has received approval from the PUCN to build a 350-mile, 525-kV transmission line, known as Greenlink West, connecting the Ft. Churchill substation to the Northwest substation to the Harry Allen substation; a 235-mile, 525-kV transmission line, known as Greenlink North, connecting the new Ft. Churchill substation to the Robinson Summit substation; a 46-mile, 345-kV transmission line from the new Ft. Churchill substation to the Mira Loma substations; and a 38-mile, 345-kV transmission line from the new Ft. Churchill substation to the Robinson Summit substations. Operating expenditures consist of routine expenditures for transmission and other infrastructure needed to serve existing and expected demand.

•Other includes both growth projects and operating expenditures consisting of turbine upgrades at the Tracy generating facility, routine expenditures for generation, other operating projects and other infrastructure needed to serve existing and expected demand.

Material Cash Requirements

As of March 31, 2022, there have been no material changes outside the normal course of business in material cash requirements from the information provided in Item 7 of Sierra Pacific's Annual Report on Form 10-K for the year ended December 31, 2021.

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Regulatory Matters

Sierra Pacific is subject to comprehensive regulation. Refer to "Regulatory Matters" in Berkshire Hathaway Energy's Part I, Item 2 of this Form 10-Q for discussion regarding Sierra Pacific's current regulatory matters.

Environmental Laws and Regulations

Sierra Pacific is subject to federal, state and local laws and regulations regarding climate change, RPS, air and water quality, emissions performance standards, coal combustion byproduct disposal, hazardous and solid waste disposal, protected species and other environmental matters that have the potential to impact Sierra Pacific's current and future operations. In addition to imposing continuing compliance obligations, these laws and regulations provide regulators with the authority to levy substantial penalties for noncompliance, including fines, injunctive relief and other sanctions. These laws and regulations are administered by various federal, state and local agencies. Sierra Pacific believes it is in material compliance with all applicable laws and regulations, although many are subject to interpretation that may ultimately be resolved by the courts. Environmental laws and regulations continue to evolve, and Sierra Pacific is unable to predict the impact of the changing laws and regulations on its operations and consolidated financial results.

Refer to "Environmental Laws and Regulations" in Berkshire Hathaway Energy's Part I, Item 2 of this Form 10-Q for additional information regarding environmental laws and regulations.

Critical Accounting Estimates

Certain accounting measurements require management to make estimates and judgments concerning transactions that will be settled several years in the future. Amounts recognized on the Consolidated Financial Statements based on such estimates involve numerous assumptions subject to varying and potentially significant degrees of judgment and uncertainty and will likely change in the future as additional information becomes available. Estimates are used for, but not limited to, the accounting for the effects of certain types of regulation, derivatives, impairment of long-lived assets, income taxes and revenue recognition - unbilled revenue. For additional discussion of Sierra Pacific's critical accounting estimates, see Item 7 of Sierra Pacific's Annual Report on Form 10‑K for the year ended December 31, 2021. There have been no significant changes in Sierra Pacific's assumptions regarding critical accounting estimates since December 31, 2021.

139

Eastern Energy Gas Holdings, LLC and its subsidiaries

Consolidated Financial Section

140

PART I

Item 1.Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of

Eastern Energy Gas Holdings, LLC

Results of Review of Interim Financial Information

We have reviewed the accompanying consolidated balance sheet of Eastern Energy Gas Holdings, LLC and subsidiaries ("Eastern Energy Gas") as of March 31, 2022, the related consolidated statements of operations, comprehensive income, changes in equity and cash flows for the three-month periods ended March 31, 2022 and 2021, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of Eastern Energy Gas as of December 31, 2021, and the related consolidated statements of operations, comprehensive income, changes in equity, and cash flows for the year then ended (not presented herein); and in our report dated February 25, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of Eastern Energy Gas' management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to Eastern Energy Gas in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Deloitte & Touche LLP

Richmond, Virginia

April 29, 2022

141

EASTERN ENERGY GAS HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Amounts in millions)

	As of
	March 31, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	54	$	22
Trade receivables, net	154		183
Receivables from affiliates	32		47
Notes receivable from affiliates	122		7
Other receivables	3		9
Inventories	124		122
Natural gas imbalances	105		100
Other current assets	132		131
Total current assets	726		621
Property, plant and equipment, net	10,183		10,200
Goodwill	1,286		1,286
Investments	423		412
Other assets	122		129
Total assets	$	12,740	$	12,648

The accompanying notes are an integral part of these consolidated financial statements.

142

EASTERN ENERGY GAS HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited) (continued)

(Amounts in millions)

	As of
	March 31, 2022		December 31, 2021
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	42	$	79
Accounts payable to affiliates	13		38
Accrued interest	54		19
Accrued property, income and other taxes	59		89
Accrued employee expenses	21		13
Regulatory liabilities	44		40
Other current liabilities	110		87
Total current liabilities	343		365
Long-term debt	3,899		3,906
Regulatory liabilities	645		645
Other long-term liabilities	263		238
Total liabilities	5,150		5,154
Commitments and contingencies (Note 8)
Equity:
Member's equity:
Membership interests	3,595		3,501
Accumulated other comprehensive loss, net	(38)		(43)
Total member's equity	3,557		3,458
Noncontrolling interests	4,033		4,036
Total equity	7,590		7,494
Total liabilities and equity	$	12,740	$	12,648

The accompanying notes are an integral part of these consolidated financial statements.

143

EASTERN ENERGY GAS HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Amounts in millions)

	Three-Month Periods
	Ended March 31,
	2022		2021
Operating revenue	$	482	$	486
Operating expenses:
Excess gas	(1)		—
Operations and maintenance	118		124
Depreciation and amortization	85		80
Property and other taxes	29		39
Total operating expenses	231		243
Operating income	251		243
Other income (expense):
Interest expense	(36)		(44)
Allowance for equity funds	2		2
Other, net	(1)		1
Total other income (expense)	(35)		(41)
Income before income tax expense and equity income	216		202
Income tax expense	30		27
Equity income	19		16
Net income	205		191
Net income attributable to noncontrolling interests	111		102
Net income attributable to Eastern Energy Gas	$	94	$	89

The accompanying notes are an integral part of these consolidated financial statements.

144

EASTERN ENERGY GAS HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(Amounts in millions)

	Three-Month Periods
	Ended March 31,
	2022		2021
Net income	$	205	$	191
Other comprehensive income, net of tax:
Unrecognized amounts on retirement benefits, net of tax of $— and $—	1		2
Unrealized gains on cash flow hedges, net of tax of $1 and $3	4		10
Total other comprehensive income, net of tax	5		12
Comprehensive income	210		203
Comprehensive income attributable to noncontrolling interests	111		106
Comprehensive income attributable to Eastern Energy Gas	$	99	$	97

The accompanying notes are an integral part of these consolidated financial statements.

145

EASTERN ENERGY GAS HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)

(Amounts in millions)

			Accumulated
			Other
	Membership		Comprehensive		Noncontrolling		Total
	Interests		Loss, Net		Interests		Equity
Balance, December 31, 2020	$	2,957	$	(53)	$	4,091	$	6,995
Net income	89		—		102		191
Other comprehensive income	—		8		4		12
Contributions	11		—		—		11
Distributions	(22)		—		(109)		(131)
Balance, March 31, 2021	$	3,035	$	(45)	$	4,088	$	7,078
Balance, December 31, 2021	$	3,501	$	(43)	$	4,036	$	7,494
Net income	94		—		111		205
Other comprehensive income	—		5		—		5
Distributions	—		—		(114)		(114)
Balance, March 31, 2022	$	3,595	$	(38)	$	4,033	$	7,590

The accompanying notes are an integral part of these consolidated financial statements.

146

EASTERN ENERGY GAS HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Amounts in millions)

	Three-Month Periods
	Ended March 31,
	2022		2021
Cash flows from operating activities:
Net income	$	205	$	191
Adjustments to reconcile net income to net cash flows from operating activities:
Losses on other items, net	1		—
Depreciation and amortization	85		80
Allowance for equity funds	(2)		(2)
Equity income, net of distributions	(8)		(5)
Changes in regulatory assets and liabilities	(14)		6
Deferred income taxes	27		30
Other, net	2		—
Changes in other operating assets and liabilities:
Trade receivables and other assets	44		(56)
Derivative collateral, net	2		2
Accrued property, income and other taxes	(29)		(25)
Accounts payable and other liabilities	28		20
Net cash flows from operating activities	341		241
Cash flows from investing activities:
Capital expenditures	(75)		(55)
Repayment of loans by affiliates	3		—
Loans to affiliates	(117)		—
Other, net	(5)		(1)
Net cash flows from investing activities	(194)		(56)
Cash flows from financing activities:
Repayment of notes payable, net	—		(9)
Distributions	(114)		(109)
Net cash flows from financing activities	(114)		(118)
Net change in cash and cash equivalents and restricted cash and cash equivalents	33		67
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period	39		48
Cash and cash equivalents and restricted cash and cash equivalents at end of period	$	72	$	115

The accompanying notes are an integral part of these consolidated financial statements.

147

EASTERN ENERGY GAS HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1)    General

Eastern Energy Gas Holdings, LLC is a holding company, and together with its subsidiaries ("Eastern Energy Gas") conducts business activities consisting of Federal Energy Regulatory Commission ("FERC")-regulated interstate natural gas transportation pipeline and underground storage operations in the eastern region of the U.S. and operates Cove Point LNG, LP ("Cove Point"), a liquefied natural gas ("LNG") export, import and storage facility. Eastern Energy Gas owns 100% of the general partner interest and 25% of the limited partnership interest in Cove Point. In addition, Eastern Energy Gas owns a 50% noncontrolling interest in Iroquois Gas Transmission System, L.P. ("Iroquois"), a 416-mile FERC-regulated interstate natural gas transportation pipeline. Eastern Energy Gas is an indirect wholly owned subsidiary of Berkshire Hathaway Energy Company ("BHE"). BHE is a holding company based in Des Moines, Iowa that owns subsidiaries principally engaged in the energy industry. BHE is a consolidated subsidiary of Berkshire Hathaway Inc. ("Berkshire Hathaway").

The unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and the United States Securities and Exchange Commission's rules and regulations for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures required by GAAP for annual financial statements. Management believes the unaudited Consolidated Financial Statements contain all adjustments (consisting only of normal recurring adjustments) considered necessary for the fair presentation of the unaudited Consolidated Financial Statements as of March 31, 2022 and for the three-month periods ended March 31, 2022 and 2021. The results of operations for the three-month period ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year.

The preparation of the unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited Consolidated Financial Statements and the reported amounts of revenue and expenses during the period. Actual results may differ from the estimates used in preparing the unaudited Consolidated Financial Statements. Note 2 of Notes to Consolidated Financial Statements included in Eastern Energy Gas' Annual Report on Form 10-K for the year ended December 31, 2021 describes the most significant accounting policies used in the preparation of the unaudited Consolidated Financial Statements. There have been no significant changes in Eastern Energy Gas' assumptions regarding significant accounting estimates and policies during the three-month period ended March 31, 2022.

148

(2)    Property, Plant and Equipment, Net

Property, plant and equipment, net consists of the following (in millions):

		As of
		March 31,		December 31,
	Depreciable Life	2022		2021
Utility Plant:
Interstate natural gas pipeline assets	21 - 44 years	$	8,776	$	8,675
Intangible plant	5 - 10 years	110		110
Utility plant in-service		8,886		8,785
Accumulated depreciation and amortization		(2,936)		(2,901)
Utility plant in-service, net		5,950		5,884
Nonutility Plant:
LNG facility	40 years	4,477		4,475
Intangible plant	14 years	25		25
Nonutility plant in-service		4,502		4,500
Accumulated depreciation and amortization		(454)		(423)
Nonutility plant in-service, net		4,048		4,077
Plant, net		9,998		9,961
Construction work-in-progress		185		239
Property, plant and equipment, net		$	10,183	$	10,200

Construction work-in-progress includes $151 million and $209 million as of March 31, 2022 and December 31, 2021, respectively, related to the construction of utility plant.

149

(3)    Investments and Restricted Cash and Cash Equivalents

Investments and restricted cash and cash equivalents consists of the following (in millions):

	As of
	March 31,		December 31,
	2022		2021
Investments:
Investment funds	$	15	$	13
Equity method investments:
Iroquois	408		399
Total investments	423		412
Restricted cash and cash equivalents:
Customer deposits	18		17
Total restricted cash and cash equivalents	18		17
Total investments and restricted cash and cash equivalents	$	441	$	429
Reflected as:
Current assets	$	18	$	17
Noncurrent assets	423		412
Total investments and restricted cash and cash equivalents	$	441	$	429

Equity Method Investments

Eastern Energy Gas, through a subsidiary, owns 50% of Iroquois, which owns and operates an interstate natural gas pipeline located in the states of New York and Connecticut.

As of both March 31, 2022 and December 31, 2021, the carrying amount of Eastern Energy Gas' investments exceeded its share of underlying equity in net assets by $130 million. The difference reflects equity method goodwill and is not being amortized. Eastern Energy Gas received distributions from its investments of $11 million and $10 million for the three-month periods ended March 31, 2022 and 2021, respectively.

150

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

Cash equivalents consist of funds invested in money market mutual funds, U.S. Treasury Bills and other investments with a maturity of three months or less when purchased. Cash and cash equivalents exclude amounts where availability is restricted by legal requirements, loan agreements or other contractual provisions. Restricted cash and cash equivalents consist of customer deposits as allowed under the FERC gas tariffs. A reconciliation of cash and cash equivalents and restricted cash and cash equivalents as presented in the Consolidated Statements of Cash Flows is outlined below and disaggregated by the line items in which they appear on the Consolidated Balance Sheets (in millions):

	As of
	March 31,		December 31,
	2022		2021
Cash and cash equivalents	$	54	$	22
Restricted cash and cash equivalents included in other current assets	18		17
Total cash and cash equivalents and restricted cash and cash equivalents	$	72	$	39

(4)    Regulatory Matters

In September 2021, Eastern Gas Transmission and Storage, Inc. ("EGTS") filed a general rate case for its FERC-jurisdictional services, with proposed rates to be effective November 1, 2021. EGTS' previous general rate case was settled in 1998. EGTS proposed an annual cost-of-service of approximately $1.1 billion, and requested increases in various rates, including general system storage rates by 85% and general system transportation rates by 60%. In October 2021, the FERC issued an order that accepted the November 1, 2021 effective date for certain changes in rates, while suspending the other changes for five months following the proposed effective date, until April 1, 2022, subject to refund and the outcome of hearing procedures. This matter is pending.

(5)    Income Taxes

A reconciliation of the federal statutory income tax rate to the effective income tax rate applicable to income before income tax expense is as follows:

	Three-Month Periods
	Ended March 31,
	2022		2021
Federal statutory income tax rate	21	%	21	%
State income tax, net of federal income tax benefit	5		3
Equity interest	2		2
Effects of ratemaking	(4)		(1)
Noncontrolling interest	(11)		(11)
Other, net	1		(1)
Effective income tax rate	14	%	13	%

For the period ended March 31, 2022, Eastern Energy Gas' reconciliation of the federal statutory income tax rate to the effective income tax rate is driven primarily by an absence of tax on income attributable to Cove Point's 75% noncontrolling interest.

Eastern Energy Gas, as a subsidiary of BHE, is included in Berkshire Hathaway's U.S. federal income tax return. Consistent with established regulatory practice, Eastern Energy Gas' provisions for income tax have been computed on a stand-alone basis, and substantially all of its currently payable or receivable income tax is remitted to or received from BHE. Eastern Energy Gas made no cash payments for income tax to BHE for the three-month periods ended March 31, 2022 and 2021.

151

(6)    Employee Benefit Plans

Eastern Energy Gas is a participant in benefit plans sponsored by MidAmerican Energy Company ("MidAmerican Energy"), an affiliate. The MidAmerican Energy Company Retirement Plan includes a qualified pension plan that provides pension benefits for eligible employees. The MidAmerican Energy Company Welfare Benefit Plan provides certain postretirement health care and life insurance benefits for eligible retirees on behalf of Eastern Energy Gas. Eastern Energy Gas contributed $3 million to the MidAmerican Energy Company Retirement Plan and $1 million to the MidAmerican Energy Company Welfare Benefit Plan for the three-month period ended March 31, 2022. Amounts attributable to Eastern Energy Gas were allocated from MidAmerican Energy in accordance with the intercompany administrative service agreement. Offsetting regulatory assets and liabilities have been recorded related to the amounts not yet recognized as a component of net periodic benefit costs that will be included in regulated rates. Net periodic benefit costs not included in regulated rates are included in accumulated other comprehensive loss, net. As of both March 31, 2022 and December 31, 2021, Eastern Energy Gas' amount due to MidAmerican Energy associated with these plans and reflected in other long-term liabilities on the Consolidated Balance Sheets was $95 million.

(7)    Fair Value Measurements

The carrying value of Eastern Energy Gas' cash, certain cash equivalents, receivables, payables, accrued liabilities and short-term borrowings approximates fair value because of the short-term maturity of these instruments. Eastern Energy Gas has various financial assets and liabilities that are measured at fair value on the Consolidated Financial Statements using inputs from the three levels of the fair value hierarchy. A financial asset or liability classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The three levels are as follows:

•Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that Eastern Energy Gas has the ability to access at the measurement date.

•Level 2 - Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

•Level 3 - Unobservable inputs reflect Eastern Energy Gas' judgments about the assumptions market participants would use in pricing the asset or liability since limited market data exists. Eastern Energy Gas develops these inputs based on the best information available, including its own data.

152

The following table presents Eastern Energy Gas' financial assets and liabilities recognized on the Consolidated Balance Sheets and measured at fair value on a recurring basis (in millions):

	Input Levels for Fair Value Measurements
	Level 1		Level 2		Level 3		Total
As of March 31, 2022:
Assets:
Money market mutual funds	$	28	$	—	$	—	$	28
Equity securities:
Investment funds	15		—		—		15
	$	43	$	—	$	—	$	43
Liabilities:
Commodity derivatives	$	—	$	(2)	$	—	$	(2)
Foreign currency exchange rate derivatives	—		(3)		—		(3)
	$	—	$	(5)	$	—	$	(5)
As of December 31, 2021:
Assets:
Foreign currency exchange rate derivatives	$	—	$	3	$	—	$	3
Equity securities:
Investment funds	13		—		—		13
	$	13	$	3	$	—	$	16
Liabilities:
Foreign currency exchange rate derivatives	$	—	$	(3)	$	—	$	(3)
	$	—	$	(3)	$	—	$	(3)

Derivative contracts are recorded on the Consolidated Balance Sheets as either assets or liabilities and are stated at estimated fair value unless they are designated as normal purchase or normal sales and qualify for the exception afforded by GAAP. When available, the fair value of derivative contracts is estimated using unadjusted quoted prices for identical contracts in the market in which Eastern Energy Gas transacts. When quoted prices for identical contracts are not available, Eastern Energy Gas uses forward price curves. Forward price curves represent Eastern Energy Gas' estimates of the prices at which a buyer or seller could contract today for delivery or settlement at future dates. Eastern Energy Gas bases its forward price curves upon market price quotations, when available, or internally developed and commercial models, with internal and external fundamental data inputs. Market price quotations are obtained from independent brokers, exchanges, direct communication with market participants and actual transactions executed by Eastern Energy Gas. Market price quotations are generally readily obtainable for the applicable term of Eastern Energy Gas' outstanding derivative contracts; therefore, Eastern Energy Gas' forward price curves reflect observable market quotes. Market price quotations for certain natural gas trading hubs are not as readily obtainable due to the length of the contracts. Given that limited market data exists for these contracts, as well as for those contracts that are not actively traded, Eastern Energy Gas uses forward price curves derived from internal models based on perceived pricing relationships to major trading hubs that are based on unobservable inputs. The estimated fair value of these derivative contracts is a function of underlying forward commodity prices, interest rates, currency rates, related volatility, counterparty creditworthiness and duration of contracts.

153

Eastern Energy Gas' long-term debt is carried at cost, including unamortized premiums, discounts and debt issuance costs as applicable, on the Consolidated Financial Statements. The fair value of Eastern Energy Gas' long-term debt is a Level 2 fair value measurement and has been estimated based upon quoted market prices, where available, or at the present value of future cash flows discounted at rates consistent with comparable maturities with similar credit risks. The carrying value of Eastern Energy Gas' variable-rate long-term debt approximates fair value because of the frequent repricing of these instruments at market rates. The following table presents the carrying value and estimated fair value of Eastern Energy Gas' long-term debt (in millions):

	As of March 31, 2022				As of December 31, 2021
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Long-term debt	$	3,899	$	3,911	$	3,906	$	4,266

(8)    Commitments and Contingencies

Legal Matters

Eastern Energy Gas is party to a variety of legal actions arising out of the normal course of business. Plaintiffs occasionally seek punitive or exemplary damages. Eastern Energy Gas does not believe that such normal and routine litigation will have a material impact on its consolidated financial results.

Environmental Laws and Regulations

Eastern Energy Gas is subject to federal, state and local laws and regulations regarding climate change, renewable portfolio standards, air and water quality, emissions performance standards, hazardous and solid waste disposal, protected species and other environmental matters that have the potential to impact Eastern Energy Gas' current and future operations. Eastern Energy Gas believes it is in material compliance with all applicable laws and regulations.

(9)    Revenue from Contracts with Customers

The following table summarizes Eastern Energy Gas' revenue from contracts with customers ("Customer Revenue") by regulated and nonregulated, with further disaggregation of regulated by line of business (in millions):

	Three-Month Periods
	Ended March 31,
	2022		2021
Customer Revenue:
Regulated:
Gas transportation and storage	$	285	$	279
Wholesale	—		17
Total regulated	285		296
Nonregulated	203		190
Total Customer Revenue	488		486
Other revenue	(6)		—
Total operating revenue	$	482	$	486

154

Remaining Performance Obligations

The following table summarizes Eastern Energy Gas' revenue it expects to recognize in future periods related to significant unsatisfied remaining performance obligations for fixed contracts with expected durations in excess of one year as of March 31, 2022 (in millions):

	Performance obligations expected to be satisfied
	Less than 12 months		More than 12 months		Total
Eastern Energy Gas	$	1,832	$	17,061	$	18,893

(10)    Components of Accumulated Other Comprehensive Loss, Net

The following table shows the change in accumulated other comprehensive loss by each component of other comprehensive income (loss), net of applicable income tax (in millions):

	Unrecognized						Accumulated
	Amounts On		Unrealized				Other
	Retirement		Losses on Cash		Noncontrolling		Comprehensive
	Benefits		Flow Hedges		Interests		Loss, Net
Balance, December 31, 2020	$	(12)	$	(51)	$	10	$	(53)
Other comprehensive income (loss)	2		10		(4)		8
Balance, March 31, 2021	$	(10)	$	(41)	$	6	$	(45)
Balance, December 31, 2021	$	(6)	$	(42)	$	5	$	(43)
Other comprehensive income	1		4		—		5
Balance, March 31, 2022	$	(5)	$	(38)	$	5	$	(38)

155

Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations

The following is management's discussion and analysis of certain significant factors that have affected the consolidated financial condition and results of operations of Eastern Energy Gas during the periods included herein. This discussion should be read in conjunction with Eastern Energy Gas' historical Consolidated Financial Statements and Notes to Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q. Eastern Energy Gas' actual results in the future could differ significantly from the historical results.

Results of Operations for the First Quarter of 2022 and 2021

Overview

Net income attributable to Eastern Energy Gas for the first quarter of 2022 was $94 million, an increase of $5 million compared to 2021. Net income increased primarily due to lower than estimated 2021 tax assessments of $10 million and lower interest expense of $8 million primarily due to the repayment of long-term debt in the second quarter of 2021. These increases were partially offset by lower margins from regulated gas transportation and storage operations of $16 million due to unfavorable natural gas prices and volumes.

Quarter Ended March 31, 2022 Compared to Quarter Ended March 31, 2021

Operating revenue decreased $4 million, or 1%, for the first quarter of 2022 compared to 2021, primarily due to a decrease in regulated gas revenues for operational and system balancing purposes due to decreased volumes of $17 million, partially offset by an increase in Cove Point liquefied natural gas variable revenue of $13 million.

Excess gas was a credit of $1 million for the first quarter of 2022, primarily due to a decrease in volumes sold of $14 million, partially offset by an unfavorable change in natural gas prices of $9 million and increased volumes of $4 million.

Operations and maintenance decreased $6 million, or 5%, for the first quarter of 2022 compared to 2021, primarily due to a decrease in postretirement benefit costs.

Depreciation and amortization increased $5 million, or 6%, for the first quarter of 2022 compared to 2021, primarily due to higher plant placed in-service.

Property and other taxes decreased $10 million, or 26%, for the first quarter of 2022 compared to 2021, primarily due to lower than estimated 2021 tax assessments.

Interest expense decreased $8 million, or 18%, for the first quarter of 2022 compared to 2021, primarily due to the repayment of $500 million of long-term debt in the second quarter of 2021.

Income tax expense increased $3 million, or 11%, for the first quarter of 2022 compared to 2021 primarily due to higher pre-tax income. The effective tax rate was 14% for the first quarter of 2022 and 13% for the first quarter of 2021.

Net income attributable to noncontrolling interests increased $9 million, or 9%, for the first quarter of 2022 compared to 2021, primarily due to an increase in Cove Point liquefied natural gas variable revenue.

156

Liquidity and Capital Resources

As of March 31, 2022, Eastern Energy Gas' total net liquidity was $454 million as follows (in millions):

Cash and cash equivalents	$	54
Intercompany revolving credit agreement	400
Total net liquidity	$	454
Intercompany revolving credit agreement:
Maturity date	2022

Operating Activities

Net cash flows from operating activities for the three-month periods ended March 31, 2022 and 2021 were $341 million and $241 million, respectively. The change was primarily due to increased cash receipts from receivables and other working capital adjustments.

The timing of Eastern Energy Gas' income tax cash flows from period to period can be significantly affected by the estimated federal income tax payment methods elected and assumptions for each payment date.

Investing Activities

Net cash flows from investing activities for the three-month periods ended March 31, 2022 and 2021 were $(194) million and $(56) million, respectively. The change was primarily due to loans to its parent under an intercompany revolving credit agreement of $117 million and an increase in capital expenditures of $20 million.

Financing Activities

Net cash flows from financing activities for the three-month period ended March 31, 2022 were $(114) million. Uses of cash totaled $114 million and consisted of distributions to noncontrolling interests from Cove Point.

Net cash flows from financing activities for the three-month period ended March 31, 2021 were $(118) million. Uses of cash totaled $118 million and consisted primarily of distributions to noncontrolling interests from Cove Point of $109 million.

Future Uses of Cash

Eastern Energy Gas has available a variety of sources of liquidity and capital resources, both internal and external, including net cash flows from operating activities, public and private debt offerings, the use of credit agreements, capital contributions and other sources. These sources are expected to provide funds required for current operations, capital expenditures, investments, debt retirements and other capital requirements. The availability and terms under which Eastern Energy Gas and each subsidiary has access to external financing depends on a variety of factors, including regulatory approvals, Eastern Energy Gas' credit ratings, investors' judgment of risk and conditions in the overall capital markets, including the condition of the utility industry.

Capital Expenditures

Capital expenditure needs are reviewed regularly by management and may change significantly as a result of these reviews, which may consider, among other factors, changes in environmental and other rules and regulations; impacts to customers' rates; outcomes of regulatory proceedings; changes in income tax laws; general business conditions; system reliability standards; the cost and efficiency of construction labor, equipment and materials; commodity prices; and the cost and availability of capital.

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Eastern Energy Gas' historical and forecasted capital expenditures, each of which exclude amounts for non-cash equity AFUDC and other non-cash items, are as follows (in millions):

	Three-Month Periods				Annual
	Ended March 31,				Forecast
	2021		2022		2022
Natural gas transmission and storage	$	8	$	7	$	57
Other	47		68		319
Total	$	55	$	75	$	376

Eastern Energy Gas' natural gas transmission and storage capital expenditures primarily include growth capital expenditures related to planned regulated projects. Eastern Energy Gas' other capital expenditures consist primarily of non-regulated and routine capital expenditures for natural gas transmission, storage and liquefied natural gas terminalling infrastructure needed to serve existing and expected demand.

Material Cash Requirements

As of March 31, 2022, there have been no material changes outside the normal course of business in material cash requirements from the information provided in Item 7 of Eastern Energy Gas' Annual Report on Form 10-K for the year ended December 31, 2021.

Regulatory Matters

Eastern Energy Gas is subject to comprehensive regulation. Refer to "Regulatory Matters" in Berkshire Hathaway Energy's Part I, Item 2 of this Form 10-Q for discussion regarding Eastern Energy Gas' current regulatory matters.

Environmental Laws and Regulations

Eastern Energy Gas is subject to federal, state and local laws and regulations regarding climate change, RPS, air and water quality, emissions performance standards, hazardous and solid waste disposal, protected species and other environmental matters that have the potential to impact Eastern Energy Gas' current and future operations. In addition to imposing continuing compliance obligations, these laws and regulations provide regulators with the authority to levy substantial penalties for noncompliance, including fines, injunctive relief and other sanctions. These laws and regulations are administered by various federal, state and local agencies. Eastern Energy Gas believes it is in material compliance with all applicable laws and regulations, although many are subject to interpretation that may ultimately be resolved by the courts. Environmental laws and regulations continue to evolve, and Eastern Energy Gas is unable to predict the impact of the changing laws and regulations on its operations and consolidated financial results.

Refer to "Environmental Laws and Regulations" in Berkshire Hathaway Energy's Part I, Item 2 of this Form 10-Q for additional information regarding environmental laws and regulations.

Critical Accounting Estimates

Certain accounting measurements require management to make estimates and judgments concerning transactions that will be settled several years in the future. Amounts recognized on the Consolidated Financial Statements based on such estimates involve numerous assumptions subject to varying and potentially significant degrees of judgment and uncertainty and will likely change in the future as additional information becomes available. Estimates are used for, but not limited to, the accounting for the effects of certain types of regulation, impairment of goodwill and long-lived assets and income taxes. For additional discussion of Eastern Energy Gas' critical accounting estimates, see Item 7 of Eastern Energy Gas' Annual Report on Form 10-K for the year ended December 31, 2021. There have been no significant changes in Eastern Energy Gas' assumptions regarding critical accounting estimates since December 31, 2021.

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Item 3.Quantitative and Qualitative Disclosures About Market Risk

For quantitative and qualitative disclosures about market risk affecting the Registrants, see Item 7A of each Registrant's Annual Report on Form 10-K for the year ended December 31, 2021. Each Registrant's exposure to market risk and its management of such risk has not changed materially since December 31, 2021. Refer to Note 6 of the Notes to Consolidated Financial Statements of PacifiCorp, Note 6 of the Notes to Consolidated Financial Statements of Nevada Power and Note 7 of the Notes to Consolidated Financial Statements of Sierra Pacific in Part I, Item 1 of this Form 10-Q for disclosure of the respective Registrant's derivative positions as of March 31, 2022.

Item 4.Controls and Procedures

At the end of the period covered by this Quarterly Report on Form 10-Q, each of Berkshire Hathaway Energy Company, PacifiCorp, MidAmerican Funding, LLC, MidAmerican Energy Company, Nevada Power Company, Sierra Pacific Power Company and Eastern Energy Gas Holdings, LLC carried out separate evaluations, under the supervision and with the participation of each such entity's management, including its Chief Executive Officer (principal executive officer) and its Chief Financial Officer (principal financial officer), or persons performing similar functions, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended). Based upon these evaluations, management of each such entity, including its Chief Executive Officer (principal executive officer) and its Chief Financial Officer (principal financial officer), or persons performing similar functions, in each case, concluded that the disclosure controls and procedures for such entity were effective to ensure that information required to be disclosed by such entity in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the United States Securities and Exchange Commission's rules and forms, and is accumulated and communicated to its management, including its Chief Executive Officer (principal executive officer) and its Chief Financial Officer (principal financial officer), or persons performing similar functions, in each case, as appropriate to allow timely decisions regarding required disclosure by it. Each such entity hereby states that there has been no change in its internal control over financial reporting during the quarter ended March 31, 2022 that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

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PART II

Item 1.Legal Proceedings

Berkshire Hathaway Energy and PacifiCorp

On September 30, 2020, a putative class action complaint against PacifiCorp was filed, captioned Jeanyne James et al. v. PacifiCorp et al., Case No. 20cv33885, Circuit Court, Multnomah County, Oregon. The complaint was filed by Oregon residents and businesses who seek to represent a class of all Oregon citizens and entities whose real or personal property was harmed beginning on September 7, 2020, by wildfires in Oregon allegedly caused by PacifiCorp. On November 3, 2021, the plaintiffs filed an amended complaint to limit the class to include Oregon citizens allegedly impacted by the Echo Mountain, South Obenchain, Two Four Two and Santiam Canyon (also known as Beachie Creek) fires, as well as to add claims for noneconomic damages. The amended complaint alleges that PacifiCorp's assets contributed to the Oregon wildfires occurring on or after September 7, 2020 and that PacifiCorp acted with gross negligence, among other things. The amended complaint seeks the following damages for the plaintiffs and the putative class: (i) noneconomic damages, including mental suffering, emotional distress, inconvenience and interference with normal and usual activities, in excess of $1 billion; (ii) damages for real and personal property and other economic losses of not less than $600 million; (iii) double the amount of property and economic damages; (iv) treble damages for specific costs associated with loss of timber, trees and shrubbery; (v) double the damages for the costs of litigation and reforestation; (vi) prejudgment interest; and (vii) reasonable attorney fees, investigation costs and expert witness fees. The plaintiffs demand a trial by jury and have reserved their right to further amend the complaint to allege claims for punitive damages.

On August 20, 2021, a complaint against PacifiCorp was filed, captioned Shylo Salter et al. v. PacifiCorp, Case No. 21cv33595, Multnomah County, Oregon, in which two complaints, Case No. 21cv09339 and Case No. 21cv09520, previously filed in Circuit Court, Marion County, Oregon, were combined. The plaintiffs voluntarily dismissed the previously filed complaints in Marion County, Oregon. The refiled complaint was filed by Oregon residents and businesses who allege that they were injured by the Beachie Creek Fire, which the plaintiffs allege began on or around September 7, 2020, but which government reports indicate began on or around August 16, 2020. The complaint alleges that PacifiCorp's assets contributed to the Beachie Creek Fire and that PacifiCorp acted with gross negligence, among other things. The complaint seeks the following damages: (i) damages related to real and personal property in an amount determined by the jury to be fair and reasonable, estimated not to exceed $75 million; (ii) other economic losses in an amount determined by the jury to be fair and reasonable, but not to exceed $75 million; (iii) noneconomic damages in the amount determined by the jury to be fair and reasonable, but not to exceed $500 million; (iv) double the damages for economic and property damages under specified Oregon statutes; (v) alternatively, treble the damages under specified Oregon statutes; (vi) attorneys' fees and other costs; and (vii) pre- and post-judgment interest. The plaintiffs demand a trial by jury and have reserved their right to amend the complaint with an intent to add a claim for punitive damages.

Other individual lawsuits alleging similar claims have been filed in Oregon and California related to the 2020 Wildfires. Investigations into the causes and origins of those wildfires are ongoing. For more information regarding certain legal proceedings affecting Berkshire Hathaway Energy, refer to Note 8 of the Notes to Consolidated Financial Statements of Berkshire Hathaway Energy in Part I, Item 1 of this Form 10-Q, and PacifiCorp, refer to Note 8 of the Notes to Consolidated Financial Statements of PacifiCorp in Part I, Item 1 of this Form 10-Q.

PacifiCorp

On March 17, 2022, a complaint against PacifiCorp was filed, captioned Roseburg Resources Co et al. v. PacifiCorp, Case No. 22CV09346, Circuit Court, Douglas County, Oregon. The complaint was filed by nine businesses and public pension plans that own and/or operate timberlands or possess property in Douglas County who allege damages, losses and injuries associated with their timberlands as a result of the French Creek Fire, the Archie Creek Fire, the Susan Creek Fire and the Smith Springs Road Fire in Douglas County in September 2020. The complaint alleges (i) PacifiCorp's conduct constituted not only common law negligence but also gross negligence and that such conduct contributed to or caused the ignition and spread of the aforementioned fires; (ii) PacifiCorp violated certain Oregon rules and regulations; and (iii) as an alternative to negligence, inverse condemnation. The complaint seeks the following damages: (i) economic and property damages in excess of $175 million under a determination of negligence or inverse condemnation; (ii) doubling of those economic damages to in excess of $350 million under a determination of gross negligence pursuant to Oregon statutes; (iii) all costs of the lawsuit; (iv) prejudgment and post-judgment interest as allowed by law; and (v) attorneys' fees and other costs.

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Item 1A.Risk Factors

There has been no material change to each Registrant's risk factors from those disclosed in Item 1A of each Registrant's Annual Report on Form 10-K for the year ended December 31, 2021, except as disclosed below.

Potential terrorist activities and the impact of military or other actions, including sanctions, export controls and similar measures, could adversely affect each Registrant's financial results.

The ongoing threat of terrorism and the impact of military or other actions by nations or politically, ethnically or religiously motivated organizations regionally or globally may create increased political, economic, social and financial market instability, which could subject each Registrant's operations to increased risks. Additionally, the U.S. government has issued warnings that energy assets, specifically pipeline, nuclear generation, transmission and other electric utility infrastructure, are potential targets for terrorist attacks. Further, the potential or actual outbreak of war or other hostilities, such as Russia's invasion of Ukraine in February 2022 and the resulting economic sanctions on Russia and the sale of Russian natural gas and petroleum, as well as the existing and potential further responses from Russia or other countries to such sanctions and military actions, could adversely affect global and regional economies and financial markets. For instance, the current ban on imports of Russian oil, liquefied natural gas and coal to the U.S. could contribute to increases in prices for such commodities in the U.S. and elsewhere which could adversely affect each Registrant's business. Further, each Registrant's business must be conducted in compliance with applicable economic and trade sanctions laws and regulations, including those administered and enforced by the U.S. Department of Treasury's Office of Foreign Assets Control, the U.S. Department of State, the U.S. Department of Commerce, the United Nations Security Council and other relevant governmental authorities in the U.S., Canada, the United Kingdom and European Union, which include sanctions that could potentially restrict or prohibit each Registrant's relationships with certain suppliers and customers. Political, economic, social or financial market instability or damage to or interference with the operating assets of the Registrants, customers or suppliers, or continued increases in the price of natural gas and other petroleum commodities may result in business interruptions, lost revenue, higher costs, disruption in fuel supplies, lower energy consumption and unstable markets, particularly with respect to electricity and natural gas, and increased security, repair or other costs, any of which may materially adversely affect each Registrant in ways that cannot be predicted at this time. Any of these risks could materially affect its consolidated financial results. Furthermore, instability in the financial markets as a result of terrorism or war could also materially adversely affect each Registrant's ability to raise capital.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3.Defaults Upon Senior Securities

Not applicable.

Item 4.Mine Safety Disclosures

Information regarding Berkshire Hathaway Energy's and PacifiCorp's mine safety violations and other legal matters disclosed in accordance with Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is included in Exhibit 95 to this Form 10-Q.

Item 5.Other Information

Not applicable.

Item 6.Exhibits

The following is a list of exhibits filed as part of this Quarterly Report.

161

Exhibit No. Description

BERKSHIRE HATHAWAY ENERGY

4.1	Seventeenth Supplemental Indenture, dated as of April 21, 2022, by and between Berkshire Hathaway Energy Company and The Bank of New York Mellon Trust Company, N.A., as trustee, relating to the 4.600% Senior Notes due 2053 (incorporated by reference to Exhibit 4.1 to the Berkshire Hathaway Energy Company Current Report on Form 8-K dated April 25, 2022).
4.2	Trust Deed, dated as of April 1, 2022, among Northern Powergrid (Northeast) plc and HSBC Corporate Trustee Company (UK) Limited, relating to the £350,000,000 in principal amount of the 3.250% Bonds due 2052.
15.1	Awareness Letter of Independent Registered Public Accounting Firm.
31.1	Principal Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Principal Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Principal Executive Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Principal Financial Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

PACIFICORP

15.2	Awareness Letter of Independent Registered Public Accounting Firm.
31.3	Principal Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.4	Principal Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.3	Principal Executive Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.4	Principal Financial Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

BERKSHIRE HATHAWAY ENERGY AND PACIFICORP

95 Mine Safety Disclosures Required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

MIDAMERICAN ENERGY

15.3	Awareness Letter of Independent Registered Public Accounting Firm.
31.5	Principal Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.6	Principal Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.5	Principal Executive Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.6	Principal Financial Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

MIDAMERICAN FUNDING

31.7	Principal Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.8	Principal Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.7	Principal Executive Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.8	Principal Financial Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

162

Exhibit No. Description

NEVADA POWER

15.4	Awareness Letter of Independent Registered Public Accounting Firm.
31.9	Principal Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.10	Principal Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.9	Principal Executive Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.10	Principal Financial Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIERRA PACIFIC

10.1	$200,000,000 Demand Promissory Note, dated as of April 14, 2022, among Sierra Pacific Power Company, as the Maker, and NV Energy Inc., as the Holder.
31.11	Principal Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.12	Principal Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.11	Principal Executive Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.12	Principal Financial Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

EASTERN ENERGY GAS

31.13	Principal Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.14	Principal Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.13	Principal Executive Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.14	Principal Financial Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

ALL REGISTRANTS

101

The following financial information from each respective Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, is formatted in iXBRL (Inline eXtensible Business Reporting Language) and included herein: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements, tagged in summary and detail.

104

Cover Page Interactive Data File formatted in iXBRL (Inline eXtensible Business Reporting Language) and contained in Exhibit 101.

163

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BERKSHIRE HATHAWAY ENERGY COMPANY
Date: April 29, 2022	/s/ Calvin D. Haack
	Calvin D. Haack
	Senior Vice President and Chief Financial Officer
	(principal financial and accounting officer)
	PACIFICORP
Date: April 29, 2022	/s/ Nikki L. Kobliha
	Nikki L. Kobliha
	Vice President, Chief Financial Officer and Treasurer
	(principal financial and accounting officer)
	MIDAMERICAN FUNDING, LLC
	MIDAMERICAN ENERGY COMPANY
Date: April 29, 2022	/s/ Thomas B. Specketer
	Thomas B. Specketer
	Vice President and Controller
	of MidAmerican Funding, LLC and
	Vice President and Chief Financial Officer
	of MidAmerican Energy Company
	(principal financial and accounting officer)
	NEVADA POWER COMPANY
Date: April 29, 2022	/s/ Michael E. Cole
	Michael E. Cole
	Senior Vice President, Chief Financial Officer and Treasurer
	(principal financial and accounting officer)
	SIERRA PACIFIC POWER COMPANY
Date: April 29, 2022	/s/ Michael E. Cole
	Michael E. Cole
	Senior Vice President, Chief Financial Officer and Treasurer
	(principal financial and accounting officer)
	EASTERN ENERGY GAS HOLDINGS, LLC
Date: April 29, 2022	/s/ Scott C. Miller
	Scott C. Miller
	Vice President, Chief Financial Officer and Treasurer
	(principal financial and accounting officer)

164