PacifiCorp, which is owned by Berkshire Hathaway, has agreed to sell a package of generation and grid assets in central and southern Washington state to Portland General Electric for $1.9 billion, the companies said. The assets included in the transaction are the Chehalis natural gas plant, the Goodnoe Hills wind facility, the Marengo I and II wind facilities and roughly 4,500 miles of transmission and distribution lines.
Under the terms disclosed, Portland General Electric will assume service for PacifiCorp’s approximately 140,000 customers in Washington, a service area that spans about 2,700 square miles. Manulife Investment Management will acquire a 49% stake in the Washington utility business that PGE will operate.
Company statements said the deal is intended to improve PacifiCorp’s financial position as it addresses mounting legal exposure from wildfires in Oregon. PacifiCorp has previously warned that litigation from thousands of Oregonians who allege the utility negligently failed to shut off power lines during a September 2020 windstorm could strain its liquidity. PacifiCorp has estimated damages claims could total $52 billion, while also noting that final amounts would likely be lower.
PacifiCorp has sought to narrow potential liability by asking an Oregon state appeals court to undo a class action and eliminate liability for emotional distress claims by fire victims. Company filings indicate trials related to those wildfires could continue into 2028.
In announcing the sale, PacifiCorp said "diverging policies" among the six western states it serves have produced "extraordinary pressure," affecting financial stability, liquidity and credit ratings. The company described the transaction as "an important step in strengthening the company’s overall position and simplifying operations."
The sale excludes PacifiCorp’s hydroelectric generation facilities located in Washington.
Regulatory approvals are required at both the federal and state levels. The companies noted the transaction could take at least one year to close, pending those reviews.
Maria Pope, PGE’s chief executive, commented on a conference call that the acquired assets represent "a valuable mix of natural gas and wind resources that provide safe, reliable and affordable power." In related financial results, PGE reported an adjusted fourth-quarter profit of $53 million, or 47 cents per share, compared with analyst expectations of 63 cents per share, according to LSEG.
The move is notable because it is uncommon for Berkshire or its operating units to divest a large business or group of assets. Greg Abel, who became chief executive of Berkshire Hathaway on January 1 after leading Berkshire Hathaway Energy, had previously overseen PacifiCorp’s immediate parent business for about a decade.
Key points
- PacifiCorp will sell wind, natural gas and distribution assets in Washington to Portland General Electric for $1.9 billion.
- Manulife Investment Management will acquire a 49% stake in the Washington utility business to be operated by PGE.
- The transaction is presented as a liquidity-strengthening step while PacifiCorp faces large wildfire litigation in Oregon; closing will require federal and state regulatory approvals and could take at least a year.
Risks and uncertainties
- Ongoing litigation in Oregon over alleged wildfire causes could continue to pressure PacifiCorp’s liquidity and credit profile, a factor cited as motivating the sale - this affects utilities and insurance sectors.
- Regulatory approvals at multiple levels are required and could delay or alter the terms and timing of the transaction - this impacts investors and the energy sector.
- Trials connected to the wildfire claims could extend into 2028, leaving the ultimate financial exposure uncertain - this creates sustained legal and financial risk for stakeholders in the regional utility market.