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These formerly "public utilities" are now often owned by PE or Berkshire Hathaway. Whenever I see the folky wisdom of Charlie Munger or Warren Buffer posted on

by xrd 2y ago

These formerly "public utilities" are now often owned by PE or Berkshire Hathaway. Whenever I see the folky wisdom of Charlie Munger or Warren Buffer posted on HN, I can't help but think about their firm's work in transforming State Farm insurance, GEICO and this gem I posted earlier today on HN: "PacifiCorp Was Grossly Negligent in Oregon’s 2020 Wildfires. Now It’s Asking Lawmakers for Protection." https://news.ycombinator.com/item?id=42971311 https://news.ycombinator.com/item?id=42971311 Because of regulation, they can gouge consumers who are captive to the damage, literally and financially.

1970-01-01 2y ago
>>they are also undertaking a massive project to underground utility lines in fire-prone areas. Seems like they're actively trying to fix it.
- xrd 2y ago
  I'm glad you stated that. It certainly wasn't my takeaway of the way they handled it, however. By my reading it seems like the local officials begged them to turn off the lines when they saw what was coming. And, that the executives at the utility didn't take action and then denied that this meeting occurred seems damning to the people who lost everything.
lotsofpulp 2y ago
I don’t see anything in State Farm’s history that indicates Berkshire Hathaway had anything to do with the company. It has always been a mutual insurance company, owned by its policyholders.
- xrd 2y ago
  You are right. I'm confusing State Farm with Allstate, via McKinsey (I'm reading the book "When McKinsey comes to town"). Berkshire Hathaway owns Geico and has taken a similar path, however. But, this Oregon utility has BH ownership.
dragonwriter 2y ago
None of the things you list are former public utilities of any kind, much less the specific kind under discussion (California public utility districts providing electricity and similar services.) PacifiCorp is a private utility company like PGE, formed from the merger of other (then- troubled), also private, utilities in 1910, and the other things aren't even utilities. Are there any germane examples of your “These formerly ‘public utilities’ are now often owned by PE or Berkshire Hathaway” claim or is it just a complete non-sequitur?
- xrd 2y ago
  I do think you make valid points and I'm wrong about the way I categorized them. And, I did put public in quotes because these utilities, while privately owned, do benefit from regulatory capture that seems out of place with a privately held company. And they often operate on or over public lands. And, having lived through the fires in Oregon and seeing the trauma first hand, I'm still angry. That's my takeaway from the article but I'm willing to listen and learn. Your points are valid and show how mistaken some (or all) of my conclusions are based on false connections.
- nonplus 2y ago
  I believe Berkshire bought (or agreed to buy) part of dominion (a public utility delivering power) on the east coast, I don't know any particulars of how it was run or if the deal even closed. Thats the only related example I know of (non exhaustive).

by xrd 2y ago

1970-01-01 2y ago

>>they are also undertaking a massive project to underground utility lines in fire-prone areas. Seems like they're actively trying to fix it.

xrd 2y ago
I'm glad you stated that. It certainly wasn't my takeaway of the way they handled it, however. By my reading it seems like the local officials begged them to turn off the lines when they saw what was coming. And, that the executives at the utility didn't take action and then denied that this meeting occurred seems damning to the people who lost everything.

lotsofpulp 2y ago

I don’t see anything in State Farm’s history that indicates Berkshire Hathaway had anything to do with the company. It has always been a mutual insurance company, owned by its policyholders.

xrd 2y ago
You are right. I'm confusing State Farm with Allstate, via McKinsey (I'm reading the book "When McKinsey comes to town"). Berkshire Hathaway owns Geico and has taken a similar path, however. But, this Oregon utility has BH ownership.

dragonwriter 2y ago

None of the things you list are former public utilities of any kind, much less the specific kind under discussion (California public utility districts providing electricity and similar services.) PacifiCorp is a private utility company like PGE, formed from the merger of other (then- troubled), also private, utilities in 1910, and the other things aren't even utilities. Are there any germane examples of your “These formerly ‘public utilities’ are now often owned by PE or Berkshire Hathaway” claim or is it just a complete non-sequitur?

xrd 2y ago
I do think you make valid points and I'm wrong about the way I categorized them. And, I did put public in quotes because these utilities, while privately owned, do benefit from regulatory capture that seems out of place with a privately held company. And they often operate on or over public lands. And, having lived through the fires in Oregon and seeing the trauma first hand, I'm still angry. That's my takeaway from the article but I'm willing to listen and learn. Your points are valid and show how mistaken some (or all) of my conclusions are based on false connections.
nonplus 2y ago
I believe Berkshire bought (or agreed to buy) part of dominion (a public utility delivering power) on the east coast, I don't know any particulars of how it was run or if the deal even closed. Thats the only related example I know of (non exhaustive).