Texas fires follow Warren Buffett’s warning on utilities

Texas officials on Thursday blamed the state’s largest-ever fire on electrical lines sparking in dry brush, fed by blasting winds into a million-acre inferno. The same combination of high winds, power lines and dry grass last year may have been responsible for razing the seaside town of Lahaina on Maui, a place once considered too lush to burn. Fast-moving fires blamed on utility equipment leveled homes in Colorado in 2021 and Oregon in 2020.

Across a vast swath of the western US, climate change and aging infrastructure have forced utilities to confront a harsh new reality that threatens both the communities they serve as well as their own survival. The danger first became clear in California, where the state’s largest utility — PG&E Corp. — tumbled into bankruptcy in 2019 after fires sparked by its power lines killed dozens of people in wine country and the Sierra Nevada foothills. But it’s spreading, as a warmer and often drier climate leaves landscapes primed to burn.

“We’re having fires at times of the year when we didn’t used to have them — and in parts of the country where they didn’t used to have them,” said Emily Fisher, executive vice president for clean energy at the Edison Electric Institute, a utility industry trade group. “The changes are impacting the entire West and are moving further east all the time.”

Buffett’s warning on utilities

Investors have noticed. Electric utilities once were considered safe, boring investments, prized for their dividends and slow, steady growth. But last month, famed value-investor Warren Buffett warned the “specter of zero profitability or even bankruptcy” loomed over utilities in some Western states.

“Certain utilities might no longer attract the savings of American citizens,” Buffett said in his annual…