PacifiCorp Grapples with Wildfire Liabilities, Regulatory Scrutiny

TL;DR

**PacifiCorp is burning cash on wildfire lawsuits, making it a risky bet for investors.**

AI Summary

PACIFICORP /OR/, a subsidiary of Berkshire Hathaway Energy Company, filed its 10-Q for the quarter ended September 30, 2025. The filing primarily details the corporate structure of Berkshire Hathaway Energy Company and its various subsidiaries, including PACIFICORP, MidAmerican Energy Company, Nevada Power Company, and Sierra Pacific Power Company. As of October 30, 2025, PACIFICORP had 357,060,915 shares of common stock outstanding, all indirectly held by Berkshire Hathaway Energy Company. The report highlights significant risks, particularly those associated with wildfires, including the 2020 Wildfires and 2022 McKinney Fire, and the potential for costly litigation, such as the James class action complaint filed against PacifiCorp on September 30, 2020. These wildfire-related liabilities could materially adversely affect PacifiCorp's financial condition, limit its access to capital, and impact liquidity, cash flows, and capital expenditure plans. The company also faces risks related to regulatory rate reviews, environmental compliance, and the ability to recover costs through rates in a timely manner. While specific revenue and net income figures for PACIFICORP were not immediately available in the provided excerpt, the emphasis is on the operational and legal risks impacting its financial stability.

Why It Matters

This filing is crucial for investors as it underscores the significant legal and financial risks PACIFICORP, and by extension its parent Berkshire Hathaway Energy Company, faces from wildfire litigation and regulatory challenges. The potential for substantial payouts from cases like the James class action could severely impact PACIFICORP's liquidity and capital access, affecting its ability to invest in infrastructure and maintain service for customers. In a competitive utility landscape, these liabilities could strain resources, potentially leading to higher rates for customers or reduced investment in grid modernization. The broader market watches these developments closely as they set precedents for utility liability in an era of increasing climate-related events.

Risk Assessment

Risk Level: high — The risk level is high due to the explicit mention of 'costly litigation' and 'material adverse effect on PacifiCorp's financial condition' stemming from wildfires, including the James class action complaint filed on September 30, 2020. The filing also notes the risk that PacifiCorp 'may be found liable for damages regardless of fault' and may not be able to recover losses from insurance or through rates, indicating significant unmitigated financial exposure.

Analyst Insight

Investors should exercise extreme caution and thoroughly evaluate PACIFICORP's exposure to wildfire liabilities and its ability to recover costs through regulatory channels. Consider the potential impact on Berkshire Hathaway Energy Company's overall financial health and dividend stability. Monitor ongoing legal proceedings and regulatory decisions closely before making any investment decisions.

Key Numbers

• 357,060,915 — PacifiCorp Common Shares Outstanding (As of October 30, 2025, all indirectly held by Berkshire Hathaway Energy Company.)
• September 30, 2020 — Date of James Class Action Filing (Marks the start of significant wildfire litigation against PacifiCorp.)

Key Players & Entities

• PACIFICORP /OR/ (company) — Registrant and subsidiary of Berkshire Hathaway Energy Company
• Berkshire Hathaway Energy Company (company) — Parent company of PACIFICORP
• Berkshire Hathaway Inc. (company) — Ultimate parent company of Berkshire Hathaway Energy Company
• James et al. v. PacifiCorp (legal_case) — Class action complaint filed against PacifiCorp on September 30, 2020
• Multnomah County Circuit Court Oregon (location) — Court where the James class action complaint was filed
• 357,060,915 (dollar_amount) — Shares of common stock outstanding for PacifiCorp as of October 30, 2025
• September 30, 2025 (date) — End of the quarterly period for the 10-Q filing
• October 30, 2025 (date) — Date for outstanding share count
• 2020 Wildfires (event) — Wildfires in Oregon and Northern California in September 2020
• 2022 McKinney Fire (event) — Wildfire in Siskiyou County, California in July 2022

FAQ

Risk Factors

• Wildfire Litigation [high — legal]: PacifiCorp faces significant legal and financial risks from wildfires, including the 2020 Wildfires and the 2022 McKinney Fire. The James class action complaint filed on September 30, 2020, highlights potential for costly litigation that could materially adversely affect financial condition, access to capital, liquidity, cash flows, and capital expenditure plans.
• Regulatory Rate Reviews [medium — regulatory]: The company is subject to regulatory rate reviews which can impact its ability to recover costs and achieve authorized rates of return. Delays or unfavorable outcomes in these reviews can affect financial performance.
• Environmental Compliance [medium — operational]: PacifiCorp must comply with various environmental regulations. Failure to do so or the need for significant investments in environmental upgrades could lead to increased costs and operational disruptions.

Industry Context

PacifiCorp operates within the regulated utility sector, characterized by significant capital investments in infrastructure and a strong reliance on regulatory approvals for rate setting and cost recovery. The industry faces increasing pressure from environmental regulations, the transition to renewable energy sources, and the growing threat of climate-related events like wildfires.

Regulatory Implications

PacifiCorp's operations are heavily influenced by state public utility commissions that oversee rate reviews and cost recovery mechanisms. Unfavorable regulatory decisions or delays in approving necessary rate adjustments can significantly impact profitability and the ability to fund capital projects.

What Investors Should Do

1. Monitor wildfire litigation developments closely.
2. Analyze the impact of regulatory rate reviews.
3. Assess the company's capital expenditure plans in light of potential liabilities.

Key Dates

• 2025-09-30: Quarter ended September 30, 2025 — Reporting period for the 10-Q filing, detailing financial condition and operational risks.
• 2025-10-30: PacifiCorp Common Shares Outstanding Date — As of this date, 357,060,915 shares were outstanding, all indirectly held by Berkshire Hathaway Energy Company.
• 2020-09-30: James Class Action Complaint Filed — Initiated significant wildfire-related litigation against PacifiCorp, posing substantial financial and operational risks.
• 2024-12-31: Balance Sheet Date — Prior year-end balance sheet figures for comparison in the consolidated financial statements.
• 2024-09-30: Prior Year Nine-Month Period — Comparative period for statements of operations and cash flows, allowing for year-over-year analysis.

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC) that provides a comprehensive update on a company's financial performance and condition. (This filing is the 10-Q for PacifiCorp, providing key financial and operational details for the quarter.)

Berkshire Hathaway Energy Company

The parent company of PacifiCorp, a major energy holding company. (Understanding PacifiCorp's ownership structure is crucial for assessing its financial backing and strategic alignment.)

Wildfires

Uncontrolled fires that spread rapidly through natural vegetation, posing significant risks to infrastructure and operations in affected areas. (Wildfire events are a major risk factor for PacifiCorp, leading to substantial litigation and potential liabilities.)

Class Action Complaint

A lawsuit filed by one or more individuals on behalf of a larger group of people who have similar claims against a defendant. (The James class action complaint represents a significant legal challenge with potentially large financial implications for PacifiCorp.)

Year-Over-Year Comparison

The provided excerpt focuses on the current period's risks and corporate structure, with limited comparative financial data. However, the cash position has increased from $1,392 million as of December 31, 2024, to $2,155 million as of September 30, 2025, indicating improved liquidity. The primary focus remains on the escalating risks associated with wildfire litigation and regulatory pressures, which are likely to be ongoing concerns compared to previous periods.

Key Financial Figures

• $1.00 — 30, 2025, 1,000 shares of common stock, $1.00 stated value, were outstanding. All sh
• $3.75 — 30, 2025, 1,000 shares of common stock, $3.75 par value, were outstanding. All of th
• $10,000 — 0, 2025, 60,101 shares of common stock, $10,000 par value, were outstanding. This comb

Filing Documents

• bhe-20250930.htm (10-Q) — 8668KB
• bhe93025ex31.htm (EX-3.1) — 497KB
• sppc93024ex45.htm (EX-4.5) — 615KB
• sppc93024ex46.htm (EX-4.6) — 168KB
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• bhe93025ex321.htm (EX-32.1) — 5KB
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• egts93025ex3215.htm (EX-32.15) — 5KB
• egts93025ex3216.htm (EX-32.16) — 5KB
• pac93025ex95.htm (EX-95) — 32KB
• bhe-20250930_g1.jpg (GRAPHIC) — 113KB
• 0001081316-25-000022.txt ( ) — 41687KB
• bhe-20250930.xsd (EX-101.SCH) — 145KB
• bhe-20250930_cal.xml (EX-101.CAL) — 175KB
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• bhe-20250930_pre.xml (EX-101.PRE) — 2189KB
• bhe-20250930_htm.xml (XML) — 8542KB

Financial Statements

Financial Statements 1 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 2 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 209 Item 4.

Controls and Procedures

Controls and Procedures 209 PART II Item 1.

Legal Proceedings

Legal Proceedings 210 Item 1A.

Risk Factors

Risk Factors 218 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 219 Item 3. Defaults Upon Senior Securities 219 Item 4. Mine Safety Disclosures 219 Item 5. Other Information 219 Item 6. Exhibits 219

Signatures

Signatures 224 i Definition of Abbreviations and Industry Terms When used in Forward-Looking Statements, Part I - Items 2 through 3, and Part II - Items 1 through 6, the following terms have the definitions indicated. Berkshire Hathaway Energy Company and Related Entities BHE Berkshire Hathaway Energy Company Berkshire Hathaway Berkshire Hathaway Inc. Berkshire Hathaway Energy or the Company Berkshire Hathaway Energy Company and its subsidiaries PacifiCorp PacifiCorp and its subsidiaries MidAmerican Funding MidAmerican Funding, LLC and its subsidiaries MidAmerican Energy MidAmerican Energy Company NV Energy NV Energy, Inc. and its subsidiaries Nevada Power Nevada Power Company and its subsidiaries Sierra Pacific Sierra Pacific Power Company and its subsidiaries Nevada Utilities Nevada Power Company and its subsidiaries and Sierra Pacific Power Company and its subsidiaries Eastern Energy Gas Eastern Energy Gas Holdings, LLC and its subsidiaries EGTS Eastern Gas Transmission and Storage, Inc. and its subsidiaries Registrants Berkshire Hathaway Energy Company, PacifiCorp and its subsidiaries, MidAmerican Funding, LLC and its subsidiaries, MidAmerican Energy Company, Nevada Power Company and its subsidiaries, Sierra Pacific Power Company and its subsidiaries, Eastern Energy Gas Holdings, LLC and its subsidiaries and Eastern Gas Transmission and Storage, Inc. and its subsidiaries Northern Powergrid Northern Powergrid Holdings Company and its subsidiaries BHE Pipeline Group BHE GT&S, LLC, Northern Natural Gas Company and Kern River Gas Transmission Company BHE GT&S BHE GT&S, LLC and its subsidiaries Northern Natural Gas Northern Natural Gas Company Kern River Kern River Gas Transmission Company BHE Transmission BHE Canada Holdings Corporation and BHE U.S. Transmission, LLC BHE Canada BHE Canada Holdings Corporation and its subsidiaries AltaLink AltaLink, L.P. and its subsidiaries BHE U.S. Transmission BHE U.S. Transmission, LLC and its subs

Forward-Looking Statements

Forward-Looking Statements This report contains statements that do not directly or exclusively relate to historical facts. These statements are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can typically be identified by the use of forward-looking words, such as "will," "may," "could," "project," "believe," "anticipate," "expect," "estimate," "continue," "intend," "potential," "plan," "forecast" and similar terms. These statements are based upon the relevant Registrant's current intentions, estimates, assumptions, expectations and beliefs and are subject to risks, uncertainties and other important factors. Many of these factors are outside the control of each Registrant and could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include, among others: general economic, political and business conditions, as well as changes in, and compliance with, laws and regulations, including tariffs and income tax reform, initiatives regarding deregulation and restructuring of the utility industry and reliability and safety standards, affecting the respective Registrant's operations or related industries; changes in, and compliance with, environmental laws, regulations, decisions and policies, whether directed towards protection of environmental resources, present and future climate considerations or social justice concerns that could, among other items, increase operating and capital costs, reduce facility output, accelerate facility retirements or delay facility construction or acquisition; the outcome of regulatory rate reviews and other proceedings conducted by regulatory agencies or other governmental and legal bodies and the respective Registrant's ability to recover costs through rates in a timely manner; changes in economic, industry, compet

Financial Statements

Item 1. Financial Statements Berkshire Hathaway Energy Company and its subsidiaries Report of Independent Registered Public Accounting Firm 4 Consolidated Balance Sheets 5 Consolidated Statements of Operations 7 Consolidated Statements of Comprehensive Income 8 Consolidated Statements of Changes in Equity 9 Consolidated Statements of Cash Flows 10

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 11 PacifiCorp and its subsidiaries Report of Independent Registered Public Accounting Firm 58 Consolidated Balance Sheets 59 Consolidated Statements of Operations 61 Consolidated Statements of Changes in Shareholders' Equity 62 Consolidated Statements of Cash Flows 63

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 64 MidAmerican Energy Company Report of Independent Registered Public Accounting Firm 91 Balance Sheets 92 94 95 96

Notes to Financial Statements

Notes to Financial Statements 97 MidAmerican Funding, LLC and its subsidiaries Report of Independent Registered Public Accounting Firm 106 Consolidated Balance Sheets 107 Consolidated Statements of Operations 109 Consolidated Statements of Changes in Member's Equity 110 Consolidated Statements of Cash Flows 111

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 112 Nevada Power Company and its subsidiaries Report of Independent Registered Public Accounting Firm 127 Consolidated Balance Sheets 128 Consolidated Statements of Operations 129 Consolidated Statements of Changes in Shareholder's Equity 130 Consolidated Statements of Cash Flows 131

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 132 Sierra Pacific Power Company and its subsidiaries Report of Independent Registered Public Accounting Firm 149 Consolidated Balance Sheets 150 Consolidated Statements of Operations 151 Consolidated Statements of Changes in Shareholder's Equity 152 Consolidated Statements of Cash Flows 153

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 154 Eastern Energy Gas Holdings, LLC and its subsidiaries Report of Independent Registered Public Accounting Firm 173 Consolidated Balance Sheets 174 Consolidated Statements of Operations 176 Consolidated Statements of Comprehensive Income 177 Consolidated Statements of Changes in Equity 178 Consolidated Statements of Cash Flows 179

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 180 Eastern Gas Transmission and Storage, Inc. and its subsidiaries Report of Independent Registered Public Accounting Firm 193 Consolidated Balance Sheets 194 Consolidated Statements of Operations 196 Consolidated Statements of Changes in Shareholder's Equity 198 Consolidated Statements of Cash Flows 199

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 200 1

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Berkshire Hathaway Energy Company and its subsidiaries 33 PacifiCorp and its subsidiaries 80 MidAmerican Funding, LLC and its subsidiaries and MidAmerican Energy Company 117 Nevada Power Company and its subsidiaries 140 Sierra Pacific Power Company and its subsidiaries 164 Eastern Energy Gas Holdings, LLC and its subsidiaries 188 Eastern Gas Transmission and Storage, Inc. and its subsidiaries 206 2 Berkshire Hathaway Energy Company and its subsidiaries Consolidated Financial Section 3 PART I

Financial Statements

Item 1. Financial Statements REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Berkshire Hathaway Energy Company Results of Review of Interim Financial Information We have reviewed the accompanying consolidated balance sheet of Berkshire Hathaway Energy Company and subsidiaries ("the Company") as of September 30, 2025, the related consolidated statements of operations, comprehensive income, and changes in equity for the three-month and nine-month periods ended September 30, 2025 and 2024, and of cash flows for the nine-month periods ended September 30, 2025 and 2024, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America. We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2024, and the related consolidated statements of operations, comprehensive income, changes in equity, and cash flows for the year then ended (not presented herein); and in our report dated February 21, 2025, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2024, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. Basis for Review Results This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicabl

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