Warren Buffett’s PacifiCorp Settles Oregon Wildfire Claims for $178 Million
In a significant development, PacifiCorp, a utility owned by Warren Buffett’s Berkshire Hathaway, has agreed to pay $178 million to settle claims from 403 plaintiffs related to two devastating Oregon wildfires in 2020. This settlement is part of a larger effort by PacifiCorp to address nearly 1,500 claims stemming from wildfires that ravaged Oregon and northern California over the Labor Day weekend.
The recent settlements specifically cover victims of the Beachie Creek and Echo Mountain Complex fires in northwestern Oregon. PacifiCorp has emphasized that the majority of plaintiffs chose to opt out of a class-action lawsuit where other claimants are seeking a staggering $30 billion in damages. Despite viewing this amount as excessive, the utility remains committed to resolving all reasonable claims brought against it.
To date, PacifiCorp has agreed to pay over $900 million to wildfire victims and has projected losses of $2.4 billion through March 31. The victims allege that PacifiCorp failed to shut down power lines during a windstorm, contributing to the spread of the fires. Ryan Flynn, president of PacifiCorp’s Pacific Power unit, expressed hope that these settlements will offer some closure to the affected individuals and businesses.
Legal representation for the settling plaintiffs, George McCoy of Warren Allen, described the accord as providing “meaningful compensation” that will enable victims to rebuild and recover from the traumatic events they endured. PacifiCorp, a subsidiary of Berkshire Hathaway Energy, which is predominantly owned by Buffett’s conglomerate, has been proactive in addressing the fallout from the wildfires.
In his annual letter to Berkshire shareholders, Buffett candidly admitted to underestimating the financial risks associated with wildfires, calling it a “costly mistake.” Greg Abel, Buffett’s expected successor as CEO, reiterated at Berkshire’s annual meeting the utility’s commitment to challenging what it deems as “unfounded” wildfire litigation. He also emphasized the need for legislative and regulatory reforms to support utilities in managing such risks effectively.
The resolution of these wildfire claims underscores the complex challenges faced by utilities in mitigating natural disaster-related liabilities. As PacifiCorp continues to navigate these legal and financial hurdles, the settlements reached with wildfire victims serve as a step towards healing and recovery for those impacted by the tragic events of 2020.