Pacific Power, a California electric utility, asked state regulators for a 57% increase in electricity rates, with President Ryan Flynn reportedly saying, “Doing nothing is not an option.”
Pacific Power, part of PacifiCorp, which Berkshire Hathaway (NYSE: BRK) (NYSE: BRK) owns, filed the request Friday to raise its base revenue by $103 million a year.
Why Pacific Power Wants the Increase
Pacific Power’s Northern California territory covers 11,292 square miles, from the coast to the Nevada border, and serves about 46,000 customers. The typical residential bill would rise $120 a month, in one of the largest-ever such requests by an investor-owned U.S. utility, the Wall Street Journal reported.
Flynn said the area is “a rugged territory; it’s densely forested; it’s dry,” with “about four customers per square mile.” That means a small number of customers must share the cost of hardening the power grid in a wildfire-prone region, according to the report.
Much of the $103 million reflects spending already underway, including replacing wooden power poles with steel and fiberglass structures and replacing hundreds of miles of bare wire with insulated, fire-resistant conductor, said Flynn, as per the report. The utility also faces steep increases in insurance premiums and general operational inflation.
Pacific Power did not immediately respond to Benzinga’s request for comment.
Fire Liability Costs and a Second Request
Pacific Power’s equipment has allegedly been tied to two California fires: the 2020 Slater Fire, which burned more than 150,000 acres and killed two people, and the 2022 McKinney Fire, which burned 60,000 acres and killed four. Separate from the rate case, the utility faces about $637 million in liability claims and legal expenses from the two fires, and it is asking regulators to let it recover $340.5 million of that from customers. It disputes responsibility for the fires but has settled claims, according to the report.
If regulators approve that recovery, the average monthly residential bill for most customers would rise by an additional $46, or about 19%, the report added. Pacific Power plans to ask for approval to securitize those costs, a strategy utilities often use for storm or fire recovery that spreads payments over a long period and could lessen the bill impact. Regulators will consider both proposals in 2027.
Earlier PacifiCorp Settlement
In February, PacifiCorp reached a $575 million agreement with the U.S. government to settle allegations that its power lines ignited six wildfires in Oregon and California: five in September 2020 and one in July 2022. Those fires burned close to 290,000 acres of federal land. The money reimburses firefighting costs and supports restoration work by the Forest Service and the Bureau of Land Management. PacifiCorp denied liability in the agreement. That settlement is separate from the 2020 Slater and 2022 McKinney fire claims in the current report.
Electricity Prices Nationwide
Electricity-cost increases are outpacing many other types of inflation across the U.S., WSJ reported. In October, market commentator The Kobeissi Letter said in a post on X that the average U.S. residential electricity price had risen 11% since January 2025, to 19.6 cents per kilowatt-hour in August, near an all-time high. The post linked the increase to the AI boom and its demand for electricity.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock
Recent Comments