Berkshire Hathaway, led by Warren Buffett, is gearing up to fight all lawsuits against its utility business related to wildfires, calling them “unfounded.” Greg Abel, Buffett’s likely successor, made this announcement at Berkshire’s annual meeting, stating that they will challenge all litigation concerning PacifiCorp.
The utility company is facing a massive $30 billion in new claims from a thousand victims blaming it for causing Oregon wildfires in 2020. This adds to the $825 million already paid or owed in claims due to other wildfire-related lawsuits, making it a significant challenge for Berkshire’s earnings.
Abel acknowledged that the utility business has been a drag on the conglomerate’s profits, with Buffett admitting to a costly mistake in failing to anticipate adverse developments in this sector. However, Berkshire is now taking steps to address the issue, including instructing employees to shut off power during wildfires and investing in measures to reduce wildfire risks.
Utah lawmakers have also taken action by allowing utilities to collect surcharges from customers to establish wildfire funds and capping liability on some claims, a move Abel praised as the “gold standard.”
Despite these efforts, Berkshire remains cautious about further investments in utilities, with Abel emphasizing the need to be disciplined and not waste capital. The company is focused on improving its operations and minimizing risks to prevent future wildfire-related challenges.