By Jonathan Stempel
OMAHA, Nebraska (Reuters) -Berkshire Hathaway Vice Chairman Greg Abel said on Saturday that “keeping the lights on” is no longer a priority for the conglomerate’s utilities when the threat of wildfires becomes excessive.
Abel spoke at Berkshire’s annual shareholder meeting, as the conglomerate’s PacifiCorp utility defends against a slew of litigation over wildfires in Oregon and northern California.
Fire victims have blamed the Portland, Oregon-based utility for failing to shut off power lines during a Labor Day weekend windstorm in 2020, leading to wildfires that burned more than 2,000 structures and more than 500,000 acres.
PacifiCorp has lost a handful of “mini-trials” to determine liability. Through the end March, it projected pretax losses of $2.75 billion, and has faced at least $48 billion of claims.
The U.S. government and Oregon, meanwhile, have sought to recover more than $900 million from PacifiCorp for natural resources damages and other costs, court records show.
“Our employees and their management team have been trained to keep the lights on,” Abel said.
After the wildfires, “we clearly recognized that we have to de-energize those assets,” Abel continued. “It’s not around keeping the lights on. It’s around protecting the general public and being sure the fire doesn’t spread further.”
Abel was also asked what would happen if a hospital lost power because of a shutoff, and a patient died. He said Berkshire’s utilities communicate more to understand the “unusual situations” its customers might face.
He nonetheless said “we cannot be an insurer of last resort” for wildfires, and “we just can’t be responsible for everything that happens in a state.”
For his part, Berkshire Chairman and Chief Executive Warren Buffett said “we made some mistakes” in not shielding PacifiCorp as well as it could have from wildfire liability. Berkshire bought the utility for $5.1 billion in 2006.
“There are going to be places where publicly held utilities would be very foolish to operate,” Buffett said.
Other utilities facing wildfire litigation include Southern California Edison over January’s wildfires in the Los Angeles area.
While PacifiCorp is not involved there, Berkshire on Saturday said the wildfires caused $1.1 billion of first-quarter losses for its insurance businesses.
PacifiCorp has worked with legislators in Oregon and neighboring Idaho and Washington on bills that could help shield utilities that have wildfire mitigation plans from litigation over fires attributed to their equipment, according to media reports.
Last year, Utah lawmakers allowed large utilities to collect surcharges from customers to establish wildfire funds, and capped liability on some claims.
PacifiCorp is a unit of Berkshire Hathaway Energy, which is owned by Berkshire Hathaway.
(Reporting by Jonathan Stempel in Omaha, Nebraska, editing by Deepa Babington)
Comments