Utilities Face a Growing Dilemma: Shut Off Power or Risk Wildfires
As wildfire risk spreads from Oregon to Hawaii, utilities weigh whether to leave customers in the dark when winds pick up
About three years before the fires in Hawaii, hot, dry winds threatened to sweep western Oregon and elevate the risk of wildfire. State officials advised utility companies to do something unusual: preemptively shut off power lines to prevent sparks.
PacifiCorp, a utility company serving parts of Oregon and other Western states, didn’t shut off its lines. Three years later, the unit of Berkshire Hathaway BRK.B 0.46%increase; green up pointing triangle is embroiled in litigation over whether it was negligent in failing to take that step, a wildfire prevention measure that to date has rarely been used outside California.
Oregon’s 2020 Labor Day fires burned more than 1.2 million acres, destroyed over 5,000 homes and businesses, and killed nine people. PacifiCorp’s power lines are believed to have played a role in several of the fires, though official investigations are pending and the company denies negligence.
Now, utilities across the West are pushing to get shut-off plans in place as wildfire risk—exacerbated by heat, drought and climate change—increases alongside litigation risk. Industry executives and observers expect companies to employ this strategy more frequently, making it likely that more utility customers will experience outages during fire season for years to come.
“Climate change is driving much more extreme conditions,” said Ryan Murphy, director of electric operations at Puget Sound Energy, which serves customers in 10 western Washington counties. “As the risks change, so must our tools and so must our processes.”
Murphy said the company last year began assessing its riskiest circuits and conferring with customers, local officials and others about how to best communicate the need for outages and minimize their impact. It aims to have an initial shut-off plan in place next year.
Other utilities have been hit with lawsuits attacking their decisions to keep the lights on in risky conditions. In Maui, the site of the deadliest U.S. fire in more than a century, Hawaiian Electric is facing a financial crisis and mounting litigation over indications that its power lines might have played a role in igniting the fire. It didn’t shut down its power lines ahead of time.
Maui County on Thursday filed a lawsuit alleging that the company’s power lines ignited the fire, and that it was negligent in failing to take that action. It also alleges that the company didn’t take proper measures to safely maintain its system.
“We are very disappointed that Maui County chose this litigious path while the investigation is still unfolding,” Hawaiian Electric said in a statement.
Xcel Energy XEL 1.00%increase; green up pointing triangle, which serves parts of eight Western and Midwestern states, is similarly dealing with litigation related to its likely role in a 2021 fire in Colorado and its failure to implement a shut-off as winds picked up.
Xcel declined to comment. It has publicly disputed findings that its lines probably contributed to the fire.
Shutting off power is a difficult and complex decision: It reduces fire risk but creates a range of other challenges. It can affect water, transportation and communications services. It can endanger customers who rely on electricity for medical needs, and complicate evacuation processes. And it results in economic losses by forcing business closures.
Utilities aren’t required by regulators to shut off power in risky conditions, but numerous regulations direct them to operate their systems safely, as well as reliably. Michael Wara, a lawyer who directs the Climate and Energy Policy Program at Stanford University, said safety might have to come at the expense of reliability during periods of dry, heavy winds capable of transforming sparks into wildfires.
“Utilities need to have a process to evaluate when it’s safe to operate their systems in red-flag conditions,” he said. “If they don’t, that’s a problem.”
Lawyers suing PacifiCorp scored a victory in June when a jury determined that the company owes about $90 million in damages to certain members of a class-action lawsuit who lost homes in the 2020 Labor Day fires in Oregon, and that figure could eventually top $1 billion as others pursue claims. The company has said it would appeal the decision.
During the trial, PacifiCorp attorneys told the jury that the company didn’t turn off the power because doing so created other risks, while attorneys for the victims argued that the company didn’t have the proper structures and processes in place to make the decision. According to the company, it has improved its shut-off plan in recent years.
“It doesn’t make sense to wait for regulators to step up or to wait for some catastrophe to happen before utilities have a plan to shut off the power,” said Matthew Preusch, a partner at Keller Rohrback who represented victims in the case. His firm plans to pursue litigation against Hawaiian Electric.
In a statement, PacifiCorp said it has invested substantially in reducing wildfire risk, and developed shut-off plans for the areas it serves.
California regulators first determined in 2012 that the state’s investor-owned utilities had the authority to shut off power to protect public safety. Since then, most of them have done so during periods of high risk, typically for autumn windstorms.
PG&E PCG -0.06%decrease; red down pointing triangle, the utility company serving most of Northern California, in 2019 implemented unprecedented shut-offs that left millions of people in the dark for days. Economists estimated that losses amounted to billions of dollars. The company has since installed technologies allowing for a more surgical approach.
During the 2020 Labor Day fires, Portland General Electric POR 0.07%increase; green up pointing triangle, Oregon’s largest utility, shut off power in risky areas for the first time. It did so again in 2022, and is working to refine its ability to pinpoint risky areas and better target shut-offs.
Larry Bekkedahl, Portland General Electric’s senior vice president of advanced energy delivery, said the company once relied on Portland International Airport readings to assess the weather throughout its service territory. It has since installed 69 weather stations to gather granular data on wind speeds, humidity levels and other variables that help it determine whether shut-offs are necessary in the fire-prone foothills surrounding the Willamette Valley.
“We no longer have to worry about what’s happening down in the southern part of the valley versus the northern part,” he said. “We can get right down into the canyons and see what’s happening.”
Avista Utilities AVA 2.81%increase; green up pointing triangle, a company that provides electricity in parts of eastern Washington, northern Idaho, and southern and eastern Oregon, spent 2021 and 2022 evaluating the shut-off plans implemented by other utilities. The company is working to develop its own plan.
David Howell, Avista’s director of electric operations, said the company is still assessing how best to alert and support customers whose health depends on having reliable power, as well as rural customers who need electricity to pump water wells.
“It’s a real trade-off between reliability and wildfire risk,” he said. “It will force some tough decisions when we have to make them, but they’ll have to be made related to safety.”