FRI, JUN 16, 2023
Berkshire utility may be on hook for billions after wildfires, but it could have been even costlier
Berkshire's PacifiCorp may have to pay billions of dollars in damages after a jury in Oregon found the electric utility liable for four wildfires in 2020.
But Reuters quotes the company as saying the jury's decision to set punitive damages at 25% of compensation for property losses and pain and suffering "significantly reduces our financial exposure."
The Oregonian newspaper reports the jury could have awarded punitive damages of up to five times the actual damages.
Even so, lawyers for the plaintiffs predict it could become the largest civil jury verdict in the state's history.
The remains of a fire damaged automobile and a motel sit in the aftermath of the Beachie Creek fire in Detroit, Oregon, September 14, 2020. REUTERS/Shannon Stapleton
The jury's action this week directly involves 17 property owners who were awarded nearly $72 million in compensation with another $18 million in punitive damages imposed on the company, but the liability verdict also applies to another 5,000 plaintiffs.
Their property and emotional distress damages will be determined later. Under Oregon law, those economic damages could be doubled by a court.
Jurors agreed with the lawsuit's accusation that PacifiCorp recklessly failed to shut off its power lines during a powerful windstorm, and that some of those lines sparked fires.
During the trial, a lawyer for the plaintiffs urged the jury to hold the utility responsible. "The way to make sure it never happens again is to speak to them in the language that they know. And it's the language of money."
After the verdict, he said, "The jury’s verdict is extremely gratifying after PacifiCorp refused to accept responsibility for any of the damages caused by its incompetence and utter disregard for people and property."
A burned tuck sits in front of burned homes in a mobile home park that was destroyed by wildfire in Phoenix, Oregon, September 20, 2020. REUTERS/David Ryder
The company told jurors that based on what it knew at the time, power shutdowns were not needed. It also argued there's no proof its equipment was actually responsible for the fires, and cited the hundreds of millions of dollars it has spent to upgrade its equipment as evidence that is trying to act responsibly.
In a statement, it says it "plans to pursue appeals, and we are confident we will prevail."
It also argues it should not be held solely responsible for what it calls a "complex issue."
"Escalating climate change, challenging state and federal forest management, and population growth in the wildland-urban interface are substantial factors contributing to growing wildfire risk. These systemic issues affect all Oregonians and are larger than any single utility, such as Pacific Power. A holistic perspective and public-private leadership will be essential to adapt society to natural disaster risks."
Berkshire hits some more 52-week highs
Berkshire's Class A shares hit new 52-week highs on Monday ($515,739), Wednesday ($521,898), and Thursday ($522,000) this week.
Today it ended at $514,000 for a one-week gain of just 0.6%.
Its closing high of the week was $516,391 yesterday.
The more widely held B shares hit new 52-weeks highs on Wednesday ($340.38) and Thursday ($341.68) before closing today at $338.31, a gain of 0.9% since last Friday's close.
Its Thursday close of $339.82 was the highest of the week.
Both the A and B shares are still below their record intraday highs of $544,389 and $362.10 on March 29, 2022.
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BERKSHIRE'S TOP U.S. STOCK HOLDINGS - June 16, 2023
Berkshire's top holdings of disclosed publicly-traded U.S. stocks, and BYD, by market value, based on today's closing prices.
Holdings are as of March 31, 2023 as reported in Berkshire Hathaway’s 13F filing on May 15, 2023, except for Occidental Petroleum, which is as of May 30, 2023, and Itochu (Japan), which is an approximation based on Buffett’s statement in April that Berkshire has a 7.4% stake.
The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.
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