OMAHA, Nebraska - Two years ago, Warren Buffett branded Berkshire Hathaway's energy business one of his conglomerate's four "giants." Now he fears its business model may be broken.
Buffett, 93, and his designated successor Greg Abel, 61, may face shareholder questions at Berkshire's May 4 annual meeting in Omaha, Nebraska, about their concerns for the energy company. Utilities can reduce the risk of wildfires by insulating wires to reduce the threat of sparks, trimming or cutting down trees that could contact power equipment, burying transmission lines underground, and temporarily shutting off power.
Berkshire spent years cleaning up poor underwriting at General Re after paying $16 billion for the reinsurer in 1998. "Our assumption is that if damages at PacifiCorp become unsustainable long term, the company's support toward PacifiCorp could be limited," S&P Global analyst Sloan Millman said.PacifiCorp said the $30 billion claim shows the need for legal reform, with its ability to serve customers "threatened by excessive wildfire damages pursued by plaintiffs' attorneys who have a substantial financial stake in these outcomes.