This year's annual letter from Warren Buffett was important. Not only was this made after the death of Buffett's long time business partner, Charlie Munger, but it holds a lot of insights conveyed in a way that's easy to understand. That's like any other letter that Buffett makes, but when it comes to the utilities industry, Buffett describes things better than what anyone else can.

Utilities was a disappointing area to Buffett for 2023. Earnings for Berkshire Hathaway Energy plunged 40% due to the regulatory climate and forest fires. As Buffett noted, "It is difficult to project both earnings and asset values in what was once regarded as among the most stable industries in America," and he's not wrong. With tighter scrutiny from the public on the utilities industry, Buffett sees utility companies enduring the threat of zero profitability or even bankruptcy and predicts investors will be less willing to invest in utility stocks, pushing utility companies into a public-power model.

Interestingly, Buffett said: "When the dust settles, America’s power needs and the consequent capital expenditure will be staggering." This is a big point about how bright the utility industry is. By reducing the regulatory scrutiny, utility companies will be better able to capitalize on the high future demand and invest more in expanding energy production in the present. Nuclear energy and fossil fuels remain the best options for satisfying the insatiable demand for energy in the future. Hence, why Buffett chooses to continue acquiring $OXY.

Fun fact: Taylor Swift is a notable utilities investor.