Federal And Oregon Governments Mull $1 Billion 2020 Wildfire Costs Claim Against PacifiCorp
An annual report filed on Monday by PacifiCorp’s parent company, Berkshire Hathaway Energy (BHE) revealed that the federal government has warned it intends to sue the owner of Portland-based Pacific Power. Seeking to recover close to $1 billion in costs for the 2020 wildfires in northern California and Southern Oregon, Oregon also has a claim of over $100 million. BHE is currently in negotiations to settle.
PacifiCorp failed to shut off power to its customers during a windstorm over the Labor Day weekend in 2020, despite being warned by top officials and state leaders according to the Oregon lawsuits.
As a result of this negligence, the power lines caused multiple blazes according to the lawsuit. BHE estimates show that its utilities are already facing over $8 billion in claims in wildfire lawsuits in California and Oregon, but some of the lawsuits don’t list a dollar amount. The claim amounts could potentially double or triple.
The new liabilities come after Pacificorp already agreed to pay lawsuits running into hundreds of millions of dollars related to the 2020 wildfires. BHE indicated in its annual report that the U.S. Justice Department has advised them that it is seeking firefighting and cleanup costs related to the September 2020 Susan Creek and Archie Creek fires of $625 million. The Oregon Justice Department confirmed it is also seeking $109 million in damages related to those wildfires.
Related: Jackson County Citizens Affected By 2020 Wildfires Invited To Apply For Grant
Aside from these claims, the U.S. Forest Service has requested that PacfiCorp pay a further $356 million for firefighting costs and damages for the Slater Fire originating in California before crossing over to Oregon. One of the worst natural disasters in Oregon’s history, the 2020 wildfires killed 9 people, burning over 1,875 square miles (4,856 square kilometers,) and razing over 5,000 homes and other structures.
Berkshire Hathaway Energy’s Response To Fire Damage Claims
Pacific Power in Portland has 574,000 customers in Oregon and BHE issued a statement confirming it would be many years before the final tally of forest fire-related losses can be established. Only then can they make informed decisions about investment desirability in vulnerable western states in the future. In his letter, Warren Buffett said. “It remains to be seen whether the regulatory environment will change elsewhere.”
Related: Pacificorp Rate Increase Will Add $29.47 To Oregon Residential Consumer Bills
According to Buffet, in extreme cases- such as Pacific Gas and Electric in California or Hawaiian Electric, utilities may be facing bankruptcy. He said that if private investors are no longer willing to take the risks associated with the utility business, the country may have to decide whether to turn to public power.
In western states where wildfires have become more prevalent, the combined uncertain regulatory environment and the high fire costs are making it more difficult for utilities like PacifiCorp to decide when it is viable to invest in major new power plants and transmission lines.
