Utilities have long been dependable motors of Warren Buffett’s Berkshire Hathaway conglomerate, turning out steady profits at rates of return approved by regulators. But the billionaire is now casting doubt on the business.
The 93-year-old Buffett and his anointed successor Greg Abel have been watching as billions of dollars of liabilities accumulate at Berkshire’s energy division, where its largest electric utility is wrestling with legal proceedings over its alleged role in forest fires that burnt hundreds of thousands of acres and led to deaths in the US Pacific Northwest.
The costs centre on PacifiCorp, a utility that serves six western states including Oregon and California. The company faces a potential $8bn in damages after being accused of contributing to a deadly 2020 deadly blaze by failing to shut off power lines, among other factors. Damages can be doubled or tripled if jurors find the company guilty of gross negligence or recklessness.