S&P pares PacifiCorp

S&P said it lowered its ratings for PacifiCorp to BBB+ from A-, its first mortgage bonds to A from A+, senior unsecured debt to BBB+ from A, and preferred stock to BBB- from BBB+. The agency also revised the outlook on PacifiCorp to negative from stable.

Concurrently, S&P affirmed the ratings on affirmed our ratings on Berkshire Hathaway Energy Co. (BHE) and subsidiaries MidAmerican Energy Co., Nevada Power Co., and Sierra Pacific Power Co., but revised the outlooks on BHE and these subsidiaries to negative from stable.

“The downgrade of PacifiCorp follows a Multnomah County jury's verdict that the company contributed to the Santiam Canyon, Echo Mountain Complex, South Obenchain, and Two Four Two wildfires that occurred in Oregon in September 2020, acting in a grossly negligent and reckless manner. The jury did not hold PacifiCorp liable for inverse condemnation, but we believe the operating risks for PacifiCorp have significantly increased. The jury's findings that the company acted in a grossly negligent manner reflects safety performance that does not meet stakeholder standards,” S&P said in a press release.

Additionally, the agency noted the jury awarded damages well above what it had estimated.

“We expect a final judgment in the coming months and expect the company to appeal on multiple grounds, which will likely take several years to fully resolve. Furthermore, in addition to the absent class members, there is the potential for other legal challenges against PacifiCorp stemming from wildfires that occurred within its service territory between 2020 and 2022,” S&P said.

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