Warren Buffett recently remarked on concerns regarding utility investments as wildfire risks increase. He noted that public utility operations, once seen as a remarkably stable investment, now face growing challenges given the rising number of severe fire events. Buffett pointed to instances involving Hawaiian Electric and Edison International as clear illustrations of this change.
In August 2023, investor anxiety spiked when Hawaiian Electric’s shares dropped nearly 76% amid fears the company might be held legally responsible for the deadly fires on Maui. The stock remains far below its previous level. California-based PG&E, whose equipment triggered several damaging fires between 2017 and 2021, experienced billions in claims, filed for bankruptcy, and saw its share price fall by roughly 95%. More recently, early in 2025, shares of Edison International fell by about 37% over concerns regarding potential responsibility for the Palisades incident near Los Angeles.
Buffett acknowledged that his own firm, Berkshire Hathaway, is not free from these risks. The conglomerate’s Berkshire Energy division has experienced a noticeable drop in value over the past couple of years. Greg Abel, the incoming CEO responsible for overseeing the energy operations at Berkshire Hathaway, shared similar cautions. He mentioned that teams across the company continue working hard to reduce exposure to wildfire hazards while accepting that risks from fire damage remain a serious concern.
Buffett’s recent remarks prompt investors to reassess their exposure to disaster liabilities. Stakeholders now reexamine utility shares amid rapidly shifting environmental rules and persistent risk from natural calamities.
