PacifiCorp has filed a request with Oregon regulators to track its costs stemming from wildfire litigation. It’s a first step in potentially passing those mushrooming liabilities to customers — one that ratepayer advocates vehemently oppose.

A Multnomah County jury awarded 17 victims of four Labor Day 2020 wildfires $90 million in damages this week after finding that its conduct was reckless and showed a conscious indifference to the health and wellbeing of the residents in communities ravaged by those fires.

The company intends to appeal the verdict, but barring a reversal, PacifiCorp’s eventual liabilities may be measured in billions. The jury’s decision to hold PacifiCorp liable for the fires applies to thousands of other victims who are members of a class in the case. Their actual damages will be decided in later court proceedings.

The company faces litigation by victims of two other fires ignited on Labor Day 2020: the Archie Creek fire east of Roseburg and the Slater fire that started in California and burned into Oregon. It is also facing a lawsuit by victims of the McKinney fire, which ignited in the utility’s northern California service territory last July.

The Portland-based utility holding company, a subsidiary of billionaire Warren Buffett’s multinational conglomerate, Berkshire Hathaway, warned regulators in a filing Thursday that the verdicts could undermine its financial stability, and that it was looking to preserve the possibility of passing costs to customers.

Simon Gutierrez, a PacifiCorp spokesperson, said the utility has not requested recovery of those costs from ratepayers and is requesting the commission take no action on the filing until the ligation is concluded.

“This is a backstop to preserve our ability to take action in the event there is impact to the financial stability of the company,” he wrote in an email Friday. “Considering the uncertainty and potential impact surrounding the company’s wildfire litigation at this time, no longer term decisions have been made on recovery of costs.”

Nevertheless, the filing with regulators said the costs “resulted from unique and unforeseen circumstances outside the Company’s reasonable control” and noted that any recovery from customers would have to be authorized though a future application or rate case.

“The potential magnitude of the claims may exceed normal costs anticipated by PacifiCorp and included in its retail rates,” the filing said, “and could also far exceed the reasonable business risk associated with these claims.”

Bob Jenks, executive director of the Oregon Citizens’ Utility Board, immediately blasted the utility’s move. He said the jury’s finding that PacifiCorp was grossly negligent and its decision to award punitive damages was meant to punish the company, not ratepayers. While the filing doesn’t require any immediate action by the Oregon Public Utility Commission, Jenks said his board would ask commissioners to reject it because it doesn’t meet the legal standard for the accounting treatment, and would keep the potential liability hanging over customers heads while the litigation continues.

Any decision to allow the company to charge ratepayers would come in a future rate case, and utilities are required to prove that those costs are “prudent and reasonable.”

“When a jury says you’re reckless and grossly negligent, it’s inherently not prudent and reasonable,” he said. “Customers should not pay a dime of these costs.”

PacifiCorp may also be looking to preserve its credit rating by signaling debt markets that it remains financially stable and has a potential mechanism to recover wildfire costs. The company carries billions of dollars in debt to fund its investments in power plants and distribution lines. If credit analysts downgrade its rating based on potential wildfire liabilities, it would increase the company’s borrowing costs – an increase that would likely be passed on to ratepayers.

Kandi Young, a spokesperson for the PUC, said in an emailed statement Friday that the commission recognized the controversy surrounding the filing, but had not determined next steps to process it. Because such filings are made to preserve the utility’s option to pass costs to ratepayers, she said it commonly takes many months, or even years before the commission takes action.

“When the time comes to take action, the PUC will establish an open and transparent public process in which all interested persons have the opportunity to present information and argument to the Commission,” she added.