Warren Buffett is known as the Oracle of Omaha because of the incredible investment success he has achieved with his investment vehicle, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). When Buffett says something, investors listen. Right now, Buffett is warning about the increasing risks being faced by regulated utilities, a sector long known as a reliable source of income for investors. Here's what you need to know.

The truth is that Warren Buffett doesn't talk publicly all that often; he prefers to provide his wisdom in written form in Berkshire Hathaway's annual reports. The 2023 report was a doozy for investors who own utilities. Although Berkshire Hathaway is a large and diversified entity, one of its biggest exposures is to electric utilities.

According to Buffett: "[T]he regulatory climate in a few states has raised the specter of zero profitability or even bankruptcy (an actual outcome at California's largest utility and a current threat in Hawaii). In such jurisdictions, it is difficult to project both earnings and asset values in what was once regarded as among the most stable industries in America."

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Source Fool.com