Why Wildfires Are an Existential Threat to Utilities

This blog is contributed by Bret Simon, a Director of Utility Solutions at Unearth

In August, the U.N. Secretary-General declared a “code red for humanity,” following the release of a damning climate report.

As climate change fuels extreme weather, California’s wildfires present a “code red” for utilities.

So far in 2021, fires have consumed nearly 2 million acres across California.

This follows 2020 - the warmest year and most active wildfire season on record in the U.S. - where California dealt with 5 of the 6 largest wildfires in its history, and fires burned 4% of all land in the state.

The rise in wildfires poses a unique threat to utilities.

While a utility doesn’t cause a hurricane or deep freeze, they do spark fires, including some of the most devastating on record.

With wildfires, a utility must weather a disaster through coordinated emergency response and prevent the disaster from occurring in the first place. The stakes are high, yet a utility’s responsibilities are complex and far-reaching.

Carefully overseeing hundreds of thousands of miles of power lines is a monumental task. And if a utility starts a fire, they face potential regulatory action, enormous settlements, and even criminal prosecution.

The cost of a wildfire to a community and ecosystem is staggering - and the status quote of utility-caused fires simply won’t cut it. 

To survive this existential threat, utilities need to leverage emerging technologies and prioritize unprecedented grid investments as they spearhead a multi-organizational effort.

Utilities Are a Leading Cause of Wildfires in California

A wildfire consuming trees

One thing’s certain: wildfires are growing more frequent and severe.

California’s witnessed 15 out of the 20 largest wildfires in its history since 2000, and suffered 10 of its most costly and destructive fires just in the last five years, according to California’s Department of Fish and Wildlife.

This includes six of the twenty deadliest wildfires.

Many local, state, and federal entities are responsible for wildfire prevention and mitigation - including private landowners - but electric utilities have a special responsibility.

Utility power lines and equipment are a leading cause of California wildfires.

Outdated utility infrastructure & operations

Utilities have sparked eight of the largest, deadliest, and most destructive fires in California history, including the Camp and Tubbs fires.

Trees collide with power lines. Outdated structures collapse or are knocked over by wind. Aging infrastructure sparks a blaze. And downed power lines ignite bone-dry brush.

Utility-caused wildfires have continued into this year as well. Investigators believe a power line ignited the Dixie Fire, the 2nd largest and 14th most destructive wildfire in history. It’s burned nearly 1 million acres and is visible from the International Space Station.

A 2020 report by California’s Public Utilities Commission (CPUC) found utility-related wildfires are responsible for 35% of wildfire fatalities and caused 109 deaths in 2017-2018 alone.

It’s clear why utilities risk billions of dollars in fines and settlements - among other serious penalties - for the countless acres burned, lives lost, and structures destroyed.

And why utilities must act to dramatically reduce wildfire risk.

The impact of utility-caused wildfires on communities is too horrific and extensive to ignore.


The Staggering Cost of Wildfires

In addition to the tragic loss of lives and homes, communities face profound economic, environmental, and health consequences following a fire.

The full extent of these damages must be considered when assessing utility-caused wildfires.

Reports by the NFPA Journal, Bureau of Land Management (BLM), National Institute of Standards and Technology (NIST), and Wharton Risk Center highlight the broad scope of direct and indirect costs.

Direct costs include destroyed assets, fire suppression, evacuations, utility power restoration, and more - the visible damage to a community and immediate clean up.

Indirect costs, on the other hand, aren’t as obvious and rarely make headlines.

For instance, wildfires disrupt business, the supply chain, tourism, insurance premiums, and even taxes. Add to that the destruction of ecosystems and exacerbated flooding, erosion, and invasive species.

And the list goes on.

A wildfire’s impacts aren’t just economic - they’re environmental, psychological, and medical.

Surpassing a hundred billion dollars

A burnt forest compared to a healthy forest

According to BLM, the true cost of a wildfire is “anywhere from 2 to 30 times the more commonly reported suppression costs.”

A 2018 research paper totals the full cost of California’s 2018 fires at a remarkable $102.6 billion, approximately 0.5% of the U.S. annual GDP.

Significantly, the indirect costs total $42.7 billion and rival the $59.9 billion in capital losses and health costs that year.

And as the lead author of the paper acknowledges, “... We cannot measure people’s psychological trauma and other social impact, and I am sure that is more profound than the economic cost.”

Researchers can quantify the multi-billion dollar damages and insurance claims or measure the toxicity of PM2.5 particles which poisoned skies as far away as New York this year, but there aren’t sufficient metrics to capture the toll on mental health.

As the U.S. grapples with “eco grief” and “disaster fatigue”, even those who don’t experience the trauma of losing a loved one, home, or business are affected.

With this in mind, utilities must prioritize unprecedented grid investments to prevent further tragedy.

Otherwise, utilities risk significant penalties and litigation.

Utilities Risk Significant Penalties and Litigation

The rise of extreme wildfires creates a whole host of legal, regulatory, financial, business, and reputational risks for utilities in California.

To date, utilities have faced significant consequences for causing wildfires, including:

a warning sign for wildfires
  • Tens of billions of dollars in total settlements with cities, counties, and insurance companies
  • Hundreds of millions of dollars in regulatory penalties

Answering to the Public

Insurance companies, property owners, and fire agencies can seek compensation for damages through inverse condemnation lawsuits, tort lawsuits, and California Health and Safety Code 13009.

Unlike other states, California’s inverse condemnation lawsuits operate with strict liability, which means utilities must pay for damages even if the utility wasn’t negligent.

This shifts financial risk and responsibility from insurance companies and property owners - who choose to live and operate in the WUI - to utilities.

What is more, there remain risks even when a utility doesn’t cause a fire.

In addition to millions of dollars in penalties, utilities take a hit to their reputation when trying to prevent wildfires by instituting a Public Power Safety Shutoff. Any outage - even when strategic - disrupts business, inconveniences the public, and endangers vulnerable customers.

Answering to Regulators

Millions of dollars also depend on regulatory compliance.

To avoid regulatory action, utilities must comply with…

  • State and federal vegetation management requirements
  • Utility commission requirements for Public Safety Power Shutoffs

  • Their commission-approved Wildfire Mitigation and Emergency Response Plans

If a utility continues to commit safety violations, the ramifications can be dire - a utility may risk the revocation of its operating license.

Ultimately, utilities need to build a 21st century grid - a major investment requiring widespread adoption of emerging technologies - to mitigate this existential threat.

6 Areas for Innovation as Utilities Mitigate Wildfire Risk

a light bulb representing innovation

In February, California’s investor-owned utilities announced plans to spend close to $11 billion to reduce wildfire risk in 2021 and 2022.

These investments are outlined in the utilities’ Wildfire Mitigation Plans (WMPs) - documentation required by legislation in 2017-2018.

In these plans, utilities outline how they’ll improve wildfire mitigation in six key areas - an expansive and complex undertaking.

A review of PG&E, SCE, and SDG&E’s WMPs highlights key opportunities for innovation.

1. Grid Hardening and Modernization

60% of the grid was built prior to the 1980s, and isn’t designed for 21st century weather.

Grid hardening and modernization are necessary to ensure reliable service during unprecedented weather.

hardened transmission lines

Examples from utility WMPs include:

  • Replacing wood poles with fire-resistant steel or concrete
  • Fire-proofing wood poles
  • Insulating power lines
  • Installing covered conductors

As the Public Advocates Office noted in its comments on PG&E’s plan, utilities shouldn’t continue installing equipment - including wood poles - that are fire hazards in high risk areas, when there are safer alternatives. 

Utilities are also considering more dramatic innovations to prevent utility infrastructure from coming into contact with fuel, like undergrounding wires or eliminating power lines by constructing remote grids.

At present, PG&E plans on undergrounding 10,000 miles of power lines, with a price tag of up to $30 billion. Undergrounding costs a remarkable $200,000 to $9,000,000 a mile.

A testament to the relevance of this investment, investigators suspect a power line - which hadn’t yet been buried as part of this project - sparked the Dixie Fire in July.

Utilities are also pursuing innovative technologies to help detect and prevent faults:

  • Rapid Earth Fault Limiter - Reduces the electricity in a powerline when it comes into contact with vegetation or the earth (See this technology in action)
  • Radio frequency monitoring - Monitors for grid irregularities
  • Distribution Fault Anticipation - Analyzes electrical signals to identify potential and developing faults
  • Line sensors - Provide visibility into specific power lines’ performance

These tools help utilities better target maintenance, monitor the grid, and reduce ignition risk - highlighting the power of emerging tech to mitigate wildfires.

Beyond expanding these technologies, utilities should take the lead in fostering international collaboration between utility providers, and pursue academic partnerships to develop new grid solutions.

SDG&E, for instance, has partnered with four institutions and founded a Fire Science Lab in the past year.

2. Inspections and Maintenance

a drone scanning a landscape

In addition to new infrastructure, utilities must inspect and maintain a vast network of existing assets.

This ensures damaged and aging infrastructure doesn’t fail and spark a fire.

In fact, aging infrastructure caused the most destructive wildfire in California's history - the Camp Fire.

Equipment failure is responsible for 32% of all ignitions, the CPUC reports.

To prevent another tragedy, California’s utilities are investing in robust ground crews, drones, satellite imagery, infrared, helicopters, and LiDAR.

Quality assurance of inspections is particularly important as wildfire risk continues to grow.

Utilities face many of the same challenges here as they do in vegetation management - including complex field operations - and could benefit from similar software solutions.

3. Vegetation Management

The foremost cause of utility-related ignitions is vegetation coming into contact with utility infrastructure, according to the CPUC.

Consequently, utilities must inspect hundreds of thousands of miles of power lines and carefully prune, remove, and replace trees and brush.

The Rural County Representatives of California (RCRC) observe, “No amount of system-hardening and infrastructure improvements will completely negate the need for on-going vegetation management.”

Vegetation management (VM) alone is an enormous, complex, and costly undertaking, which requires a large workforce, advanced technology, and effective field operations. 

PG&E, SCE, and SDG&E - California’s biggest utilities - are investing in LiDAR, drones, satellite imagery, expanded inspection teams, and internal teams of arborists to improve their VM.

According to a monitor’s report, however, recent VM failures were due in part to “human error, lack of oversight, miscommunications, and failure to appropriately escalate matters.”

Put simply, VM not only requires vast resources but is a logistical nightmare.

Utilities should prioritize innovations in field operations to effectively coordinate workers in the field, track diverse assets across a large region, collect accurate data, and ensure clear communication and oversight.

SCE, for instance, is “investing in an integrated software platform” to better manage data, assets, and work.

Vegetation management innovation white paper

4. Public Safety Power Shut-Offs (PSPS)

When wildfire risk is high, utilities will shut off the power to avoid sparking a wildfire.

PG&E describes PSPS events as a “critical last resort,” and SDG&E takes credit for “pioneer[ing] the use of de-energization” to protect customers, a 180-degree turn from a single minded focus on reliability.

Because of this sacrifice in reliability, PSPS is the most controversial strategy in wildfire risk mitigation, and utilities must comply with the CPUC’s PSPS guidelines.

During 2019, for instance, the CPUC penalized all three utilities for violating these guidelines.

A power shutoff isn’t merely disruptive to customer’s lives - it can be life threatening for vulnerable customers, especially those who rely on life support.

With this in mind, Utilities face three primary challenges:


1) Minimizing the scope of an outage

Utilities are installing switching and sectionalizing devices - limiting shut downs to power lines at high risk - which make PSPS events more precise.

battery storage and remote grids


2) Supporting customers who do end up without power

This comes in three forms: customer outreach, temporary generation, and microgrids.

Effective customer outreach requires a functional website, multiple channels (web, text, apps, radio spots, physical signage, community meetings and outreach centers, etc.), education (e.g., Wildfire Safety Fairs), local partnerships, and support for disabled, aging, or medically vulnerable customers.

Additionally, utilities offer temporary generation, distributing propane, diesel, and battery-powered generators. For example, SDG&E provided 1,409 battery-powered generators to vulnerable customers in 2020.

Microgrids are a long-term solution, so a community can supply its own electricity instead of relying on transmission lines winding through wildfire territory.


3) Inspecting power lines and restoring power as efficiently as possible

High winds are a common cause of PSPS events and knock down trees or the power lines themselves.

Before a utility can re-energize power lines, they must organize inspections to assess damage and ensure restoring power won’t start a fire.

To do this effectively, utilities are investing in helicopters, fixed-wing aircraft, cameras, infrared equipment, and additional crews.

Field teams completing inspections also need effective tools for data collection and visualization - another opportunity for innovation.

Notably, a swift recovery from a PSPS event depends on situational awareness.

5. Situational Awareness

While its own category, situational awareness is key to all wildfire risk mitigation:

  • Public Safety Power Shut-Offs rely on accurate weather forecasting and risk analysis
  • First responders need visibility into fire conditions
  • Vegetation management, inspections, maintenance, and grid hardening depend on accurate identification of high-risk areas and aging assets to prioritize work
satellites and satellite imagery

To enhance situational awareness, utilities are employing...

  • Weather stations to evaluate fire risk by measuring temperature, humidity, and wind speeds
  • HD cameras for added visibility
  • Artificial intelligence for accurate weather forecasts and predictive modeling
  • Data analytics and machine learning

There are three primary challenges here: 1) adopting and installing the technology necessary to gather this data, 2) acquiring tools to process this data into actionable information, 3) and partnering with local, state, and federal stakeholders to ensure this information is utilized effectively.

The CPUC argues fire propagation models, for instance, suffer from “limited collaboration."

They highlight how these models could benefit “local communities, fire suppression professionals, regulators, utilities, and others to establish a common source of accurate information about potential fire risk and to drive coordinated decision-making.”

Emerging as leaders in this collaborative effort not only improves operations across an organization but also further justifies these investments to the CPUC and public.

6. Emergency Response

Much of what I’ve discussed so far concerns prevention, not response.

However, whether or not a utility actually starts a fire, they’re almost guaranteed to experience outages due to wildfire damage. It’s an inevitability.

Like PSPS events, effective power restoration hinges on effective customer outreach, damage assessments, and coordination with affected communities.

That said, emergency response differs from PSPS in the scope of coordination and mobilization.

a wildfire destroying everything in its path

For example, a utility supports fire suppressing professionals by sharing situational awareness and - as SCE reports - even providing helitankers to “bolster firefighting capabilities.”

Utilities must also wait to perform damage assessments until CAL Fire allows them into an area, collaborating with local, state, and federal stakeholders in cleaning up and restoring power.

And logistics may grow even more complex if a utility requests mutual aid from neighboring utilities.

In that case, utilities must coordinate housing, equipment, advanced tech, supplies, and assignments with a much larger workforce and crews unfamiliar with the territory.

Simply put, utilities manage very complex operations when restoring power.

Not only do field teams need the right equipment - trucks, drones, helicopters - but real-time visibility into the field.

A major challenge here is streamlining data, work, and asset management, and providing field workers with the right digital tools, as they navigate dynamic and potentially hazardous conditions.

Conclusion: Grid Transformation Requires Collaboration

Strategies exist for mitigating wildfire risk, but there’s no panacea for this problem - preventing fires is a sweeping, complex, and expensive operation.

The challenges utilities face are stunning, and the billions of dollars in regulatory penalties and liability for wildfire damages threaten their very existence.

It’s easy for commentators to criticize utilities for causing devastating, costly fires, but the grid wasn’t built for extreme wildfires.

Mitigating wildfire risk requires unprecedented investments in utility infrastructure and emerging technologies - utilities can’t accomplish this vast undertaking alone.

Utilities must work closely with the CPUC, partner with local communities, collaborate with fire suppression professionals, and join organizations worldwide in preventing and mitigating wildfires.

Ultimately, wildfire mitigation is a multi-organizational undertaking, and utilities are uniquely positioned to spearhead these collaborative efforts.

Building the grid of tomorrow will require becoming leaders in fire suppression, community hardening, and technological innovation.

Interested in the threat posed by extreme weather? Check out our white paper on navigating state regulation and safeguarding the grid in Texas, New York, and California.
Extreme weather white paper