Berkshire-owned Pacific Power seeks 57% California rate hike

what happened

Pacific Power, a unit of Berkshire Hathaway-owned PacifiCorp, has asked California regulators for a 57% rate increase, one of the largest such requests by an investor-owned U.S. utility, according to the Wall Street Journal. The move would lift base revenue by $103 million a year and add about $120 a month to a typical residential bill.

The money would fund grid hardening in a sparsely populated, wildfire-prone part of Northern California, including replacing wooden poles and bare wire. The company also wants to recover $340.5 million of roughly $637 million in liability claims and legal costs tied to the 2020 and 2022 fires, which it disputes responsibility for. Regulators will weigh both proposals in 2027.

The Journal, citing PowerLines, reports that utilities have requested more than $23 billion in rate increases this year.

why it matters

The scale of the request and PacifiCorp's financial strain matter for markets. The company has halted dividends to Berkshire, is selling assets to Portland General Electric for $1.9 billion, and S&P has cut its issuer rating to BBB-minus, the lowest investment-grade level. The outcome may signal how regulators across the western US treat wildfire costs.

market impact

US utilities: rate hikes and wildfire liabilities affect cash flow and credit ratings of western utilities

tags

instruments