Berkshire-owned PacifiCorp, citing liquidity, sells Washington assets to Portland General Electric for $1.9 billion

By Jonathan Stempel and Katha Kalia

Feb 17 (Reuters) - PacifiCorp, a utility owned by Berkshire Hathaway BRKa.N, is selling wind, natural gas generation and distribution assets and infrastructure in central and southern Washington state to Portland General Electric POR.N for $1.9 billion, citing liquidity concerns as it battles wildfire litigation in Oregon.

The transaction announced on Tuesday includes the Chehalis natural gas plant, Goodnoe Hills wind facility, Marengo I and II wind facilities and 4,500 miles of transmission and distribution lines. PGE will add PacifiCorp's 140,000 customers in Washington state, covering about 2,700 square miles.

Manulife Investment Management MFC.TO will take a 49% stake in the Washington utility business, PGE said. The transaction could take at least one year to close, pending federal and state regulatory reviews. PGE and PacifiCorp are based in Portland, Oregon.

PacifiCorp has said it could face strained liquidity from litigation by thousands of Oregonians who blamed it for causing four wildfires in September 2020 by negligently failing to shut off power lines during a windstorm.

Damages claims could total $52 billion, PacifiCorp has said, but would likely be lower. Trials could last into 2028. PacifiCorp has asked an Oregon state appeals court to undo a class action and eliminate liability for fire victims' emotional distress.

PACIFICORP FACES 'EXTRAORDINARY PRESSURE'

In announcing the asset sale, PacifiCorp said "diverging policies" among the six western U.S. states it serves have created "extraordinary pressure," affecting its financial stability, liquidity and credit ratings.

It is rare for Berkshire or its operating units to sell a large business or group of assets. Greg Abel replaced Warren Buffett as the Omaha, Nebraska-based conglomerate's chief executive on January 1. Abel previously led PacifiCorp's immediate parent Berkshire Hathaway Energy for about a decade.

"PacifiCorp is navigating a complex set of financial and regulatory pressures," the utility said in a statement. "The sale is an important step in strengthening the company’s overall position and simplifying operations."

The sale does not include PacifiCorp’s hydroelectric generation facilities in Washington.

As electricity demand surges among industrial customers and data centers, utilities are seeking additional generation and transmission assets to support load growth.

Maria Pope, PGE's chief executive, on a conference call said the PacifiCorp assets are "a valuable mix of natural gas and wind resources that provide safe, reliable and affordable power."

PGE also posted an adjusted fourth-quarter profit of $53 million, or 47 cents per share. Analysts, on average, expected 63 cents per share, according to LSEG.