Wyoming and Utah may soon see the utility giant PacifiCorp undergo a significant shift, as the company explores a potential breakup that could align it more closely with states favoring pro-coal energy policies, Bridger Valley Pioneer reports.
PacifiCorp, part of Warren Buffett’s Berkshire Hathaway conglomerate, has faced increasing challenges in balancing the fossil-fuel friendly policies of Wyoming and Utah with the cleaner energy standards required in states like California, Oregon, and Washington, where it also operates.
The possibility of a corporate realignment, which has not yet been formally proposed, is being driven by diverging energy priorities across the six states PacifiCorp serves. While Wyoming and Utah have pushed for a greater focus on coal and other traditional energy sources, other states have prioritized renewable energy and environmental policies aimed at reducing carbon emissions. This has led to tension within the company, especially as PacifiCorp has faced criticism from lawmakers in Wyoming and Utah for moving away from coal-fired power generation in favor of wind and solar.
According to PacifiCorp’s Rocky Mountain Power President, Dick Garlish, any breakup of the utility would come with significant costs and complexities. He told Utah lawmakers that realignment scenarios are still in the early stages and will require additional time to develop. The company is working with six states and other stakeholders to determine the potential costs and benefits of a reorganization. However, he acknowledged that such a shift is not without challenges, including possible increased operational costs.
One key concern for Wyoming lawmakers is the impact of PacifiCorp’s policy shifts on ratepayers. The company has already proposed substantial rate hikes in recent years, including a historic 29.2% increase for Wyoming customers in 2023, which was later reduced to 5.5%. A second increase of 9.3% was temporarily imposed in July, and another rate hike of 14.7% is currently under consideration. These increases are partly attributed to the company’s need to recover costs related to shifting energy markets and ongoing investments in infrastructure.
While the potential breakup may offer benefits for states like Wyoming and Utah, it remains uncertain what the long-term effects will be for local ratepayers. Some lawmakers in Utah have expressed support for a reorganization that would create a regional operation focused on serving the interests of Wyoming, Utah, and Idaho, where pro-coal policies align more closely with the energy priorities of these states. However, Wyoming has not yet formally requested such a separation, though many state lawmakers have shown interest in exploring alternatives to PacifiCorp’s current multi-state model.
The potential realignment comes at a time when PacifiCorp is also facing significant pressures, including billion-dollar wildfire liability lawsuits related to its role in West Coast wildfires. Additionally, rising insurance premiums for utilities in the wake of climate change-related risks, such as more intense wildfires, have added to the company’s financial strain.
