Presenter: Michael Wara, Woods Institute for the Environment, Stanford University
The bankruptcy of PG&E, the nation’s largest investor owned utility, in 2018, was a milestone for wildfire and climate related impacts. This was the first major corporation to face reorganization due to events attributable to climate change. Wildfire related costs, the bankruptcy, and subsequent reorganization place significant constraints on the future of energy policy in California, even as the state prioritizes electrification of vehicles and buildings. Utility caused wildfires are not new. They are as old as utilities. But unwise fuels management, development in the WUI, and subtle changes in fall California climate have undermined the assumptions that govern utility distribution system design, operation, and maintenance in California and likely most of the western US. The response has been fourfold: deployment of weather stations, vegetation management, hardening and sectionalization of distribution infrastructure, and a willingness to turn off power when wind and fuel conditions create substantial risk. All of this significantly raises the cost of serving wildfire prone areas and is leading to double digit rate increases across the IOUs and significant decreases in customer reliability. In addition, in order to stabilize the utility financial situation in 2019, the State created the Wildfire Fund. Ultimately, if California is to maintain energy access for middle and low-income residents, and invest in grid upgrades necessary to enable vehicle and building electrification, utilities must spend less on wildfire. The best solution will likely emerge from a full consideration of the cost-effectiveness of different portfolios of community mitigation investment that include grid hardening, fuels reduction adjacent to homes, home hardening, and power shutoffs paired with backup generation. In the end, the deep lesson from the wildfire-utility crisis in California is that secondary and unanticipated effects of a warming climate can surprise even those that are looking hard for climate impacts, forcing “disorganized” adjustment of practices and markets, with substantially higher costs of climate adaptation.
The series is organized by Michael Gollner (UC Berkeley), Crystal Kolden (UC Merced) and Jeanette Cobain (UC Merced) and supported by the Berkeley Fire Research Group, College of Engineering, University of California, Berkeley and the University of California, Merced. The series outreach partner is the California Science Consortium, a JFSP Fire Science Exchange Network.