By Jonathan Stempel
(Reuters) -The U.S. government has threatened to sue the PacifiCorp unit of Warren Buffett's Berkshire Hathaway (NYSE:BRKa) over its alleged failure to cover $356 million in costs associated with the 2020 Slater wildfire in southern Oregon and northern California.
In its annual report filed on Monday, PacifiCorp's parent Berkshire Hathaway Energy said the Department of Justice notified the utility last month of its intent to litigate over fire suppression costs, natural resource damages and burned area emergency response costs incurred by the U.S. Forest Service.
Berkshire Hathaway Energy said PacifiCorp is cooperating to resolve the alleged claims, possibly through mediation or arbitration. It said the $356 million could grow to reflect interest, penalties and additional environmental damages.
The Justice Department has also corresponded with PacifiCorp about recovering the estimated $625 million costs and damages to federal lands from the 2020 Archie Creek and Susan Creek wildfires in southern Oregon, the annual report said.
Neither the Justice Department nor Berkshire Hathaway Energy immediately responded to requests for comment.
The Slater fire started on Sept. 8, 2020 in southern Oregon and spread to approximately 157,000 acres (63,536 hectares).
PacifiCorp separately faces private lawsuits from thousands of homeowners and businesses concerning Oregon and California wildfires in 2020 and 2022, including over its alleged negligent failure to shut down power lines.
Multiple juries have issued verdicts against PacifiCorp, and more trials are scheduled for 2024. PacifiCorp has taken $2.4 billion of charges through Dec. 31, 2023 for estimated wildfire losses, before recoveries from insurers.
In his annual letter to Berkshire shareholders on Saturday, Buffett said his Omaha, Nebraska-based conglomerate could face more wildfire losses if the frequency and intensity of severe thunderstorms keeps growing.
"It will be many years until we know the final tally from BHE’s forest-fire losses and can intelligently make decisions about the desirability of future investments in vulnerable western states," Buffett wrote.
Berkshire bought PacifiCorp for $5.1 billion in 2006.