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Abel says protecting public comes first during wildfires

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Abel says Berkshire cannot be insurer of last resort for

wildfires

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Victims blamed PacifiCorp for 2020 Oregon, California

wildfires

By Jonathan Stempel

OMAHA, Nebraska, May 3 (Reuters) -

Berkshire Hathaway ( BRK/A ) 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 ( BRK/A ).