Warren Buffett's Berkshire Hathaway just inked a deal to buy power-line owner AltaLink in Canada. That extends Buffett's bet on the power sector in a big way. You can follow his lead by adding U.S. electric transmission company ITC (NYSE:ITC) to your portfolio.

What's the deal?
SNC-Lavalin Group and Berkshire Hathaway just agreed to a nearly $3 billion deal whereby Berkshire will acquire SNC's AltaLink. AltaLink owns 7,500 miles of electric transmission lines in Canada. This adds on to Buffett's already big energy division, which was recently renamed Berkshire Hathaway Energy from MidAmerican Energy.

This is an interesting purchase because of what it says about the power industry. It's easy to get lost inside of $200 billion market cap Berkshire Hathaway, but the energy group has been growing via acquisition and now has around $70 billion worth of assets under its control. It serves 8.4 million customers. For reference, Duke Energy (NYSE:DUK) has 7.2 million customers.

In other words, Buffett is betting big on utilities. That alone is worth notice. However, the industry is in a state of flux. Indeed, companies like SunPower (NASDAQ:SPWR) are making utility customers into utility competitors.

(Source: Emmanuel Huybrechts, via Wikimedia Commons)

How's that? SunPower not only makes top-notch solar power cells, but it's increasingly selling and installing them on the roofs of homeowners and businesses. For example, SunPower just inked a deal with Pajaro Valley Unified School District in California to install 1.2 megawatts of solar power at five schools. That's expected to offset nearly 75% of the electricity used at the schools.

The interesting thing, however, is that California is a net metering state. That means that any excess power generated during the day can, essentially, be sold to the power company at government-mandated subsidized prices. This is a virtual gold mine for a company like SunPower because it puts what would otherwise be expensive solar installations within reach of the average (or at least affluent) Joe.

While Pajaro Valley's installation is a huge one, most are smaller. But, the company started 2014 with 20,000 customers in its residential lease program. With that kind of scale, small installations start to add up to a potentially big problem for utilities.

(Source: Lucas Braun, via Wikimedia Commons)

After two years of red ink, SunPower turned a profit of $0.70 a share last year. And, according to CEO Tom Werner, "generated significant cash to fund our growth." Increasingly that includes not only selling the solar cells that utilities need to meet environmental mandates, but also the rooftop solar installations that are turning customers into erstwhile competitors.

Getting ready for the shift
So Berkshire Hathaway's move to by Canadian transmission lines fits well with a future where owning the "pipes" that move power around is a more reliable business than owning power plants. And that is exactly ITC's business. ITC owns 15,000 miles of transmission lines across seven states.

A decade's worth of top line growth shows the stability of the business. With a dividend that's been increased every year since being initiated in 2005 backing that up. Earnings haven't gone up every year, but the trend has been a steady, if not annual, upward march: ITC earned $0.03 a share in 2004 and $1.47 last year—the seventh consecutive bottom line advance.

Doing it the Buffett way
No one can invest just like Buffett because only Buffett controls Berkshire Hathaway. However, that doesn't mean you can't follow his lead. ITC is essentially a U.S. version of AltaLink. By utility standards, ITC's dividend yield of around 1.5% is paltry (Duke, for comparison, yields about 4.3%), but the company is probably among the best positioned to succeed in an energy future where power plants aren't the reliable revenue generating assets they once were. SunPower isn't a bad bet either, but government clean energy mandates are, at present, a key to its success that need to be closely monitored.

Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends Berkshire Hathaway and ITC. The Motley Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.