PacifiCorp Credit Downgrade Raises Bankruptcy Concerns Amid Wildfire Lawsuits
PacifiCorp, the Oregon-based utility owned by Warren Buffett, warns of a potential liquidity crisis amid lawsuits over the 2020 wildfires. Facing billions in damages and credit downgrades, the company says ongoing litigation threatens its long-term operations.
PORTLAND, Ore. — Warren Buffett’s Oregon-based utility company, PacifiCorp, is facing mounting financial pressure tied to lawsuits from the 2020 Labor Day wildfires, with company filings warning of a potential “liquidity crisis.”
In its Nov. 3 quarterly earnings report, PacifiCorp reported a profit of $1.48 billion but cautioned that wildfire-related legal liabilities could overwhelm the company’s finances. Earlier this year, both Moody’s and Standard & Poor’s downgraded PacifiCorp’s credit ratings, increasing concerns about its ability to access funding.
“Should PacifiCorp be downgraded below investment grade and unable to secure sufficient debt financing or alternative funding sources, it may have insufficient liquidity to support ongoing operations,” the company said in its report.
The utility, which serves over two million customers in six western states, said the lawsuits threaten its ability to deliver safe and reliable power. In an Aug. 8 filing with the Oregon Court of Appeals, the company expressed concerns that ongoing litigation could affect operations.
PacifiCorp declined interviews but stated it remains committed to meeting obligations and providing essential services. “We are working closely with our regulators in meeting state requirements while delivering safe and reliable power,” the company said.
To illustrate its financial strain, PacifiCorp submitted a sealed declaration from Chief Financial Officer Nikki Kobliha. The court allowed the filing to remain fully redacted, leaving Oregon customers unable to review the details.
The turmoil has extended to company leadership. On Oct. 4, PacifiCorp quietly appointed Darin Carroll, a Texas energy industry veteran, as its new CEO. Former CEO Cindy Crane will remain chair of the board.
The company continues to face multiple lawsuits from residents in Santiam Canyon, the Central Oregon Coast, and Southern Oregon, where the 2020 fires killed nine people and destroyed thousands of homes and businesses. Plaintiffs argue PacifiCorp’s power lines caused or worsened the fires, while the utility maintains that airborne embers from other fires were to blame.
Although the Oregon Department of Forestry’s investigation supported PacifiCorp’s position, a 2023 Multnomah County jury found the company grossly negligent. Subsequent damages trials have produced large verdicts, with juries awarding plaintiffs an average of $5 million each. Even if reduced, PacifiCorp could face payouts exceeding $4 billion.
With hundreds of individual cases still pending, Judge Steffan Alexander ordered an accelerated schedule in July to move the trials forward. PacifiCorp, however, has described this order as an existential threat, warning that the ongoing litigation could jeopardize the company’s financial stability.
Comments ()