Given California accounts for such a small portion of electricity sold and a majority of the wildfire risks, how easy would it be for Pacific Corp. to exit its Californian service areas?
I found the following map of service areas in California. PG&E has adjacent territory and there are a number of scattered utility districts. It seems unlikely that PacifiCorp would be allowed to exit California without, at a minimum, providing some sort of indemnification for past fire liabilities.
I’ll probably submit a question about this to Becky Quick, although I suspect she will be flooded with BHE questions this year. I have not seen this particular issue discussed elsewhere although that could be because I’m making it out to be more of an issue than it is. BHE has many healthy subsidiaries and would likely be able to refinance its senior debt at the BHE level, especially considering that it makes no distributions to Berkshire Hathaway and the retention of all its earnings is constantly bolstering its equity capital base as a result. Still, it would obviously be preferable to not have this sort of provision in BHE’s debt.
Given California accounts for such a small portion of electricity sold and a majority of the wildfire risks, how easy would it be for Pacific Corp. to exit its Californian service areas?
I found the following map of service areas in California. PG&E has adjacent territory and there are a number of scattered utility districts. It seems unlikely that PacifiCorp would be allowed to exit California without, at a minimum, providing some sort of indemnification for past fire liabilities.
https://cecgis-caenergy.opendata.arcgis.com/documents/c69c363cafd64ad2a761afd6f1211442/explore
Nice find on the BHE debt trigger!
I’ll probably submit a question about this to Becky Quick, although I suspect she will be flooded with BHE questions this year. I have not seen this particular issue discussed elsewhere although that could be because I’m making it out to be more of an issue than it is. BHE has many healthy subsidiaries and would likely be able to refinance its senior debt at the BHE level, especially considering that it makes no distributions to Berkshire Hathaway and the retention of all its earnings is constantly bolstering its equity capital base as a result. Still, it would obviously be preferable to not have this sort of provision in BHE’s debt.
Thanks for a very detailed and informative article!
One question: Where do I find the 10 footnotes to which reference is made?
Thanks,
Al Phillips
The footnotes should appear at the end of the article. I can see them on the website at https://newsletter.rationalwalk.com/p/berkshire-hathaway-energys-uncertain at the bottom. They should also appear at the end of the email.