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Wildfires Affect Every Utility

Posted 12/31/2018

By Jess A. Hurtado, Program Manager and R. Bruce Wright, CPCU

 

Wildfires are not just the "other guys" problem, they affect us all.  

The past couple of years have presented parts of the nation with the worst wildfire cost in history. Some of these were caused by known human agencies, campers, cars and the like, but several have been traced to utility sources, apparently including the latest large fire, the Camp Fire, in Northern  California, which devastated the town of Paradise and caused the deaths of at least 86 people.

According to government statistics, 6 of the top 10 most destructive California wildfires were recorded in the last 2 years.

Name

County

Acres

Start date

Structures

Deaths

Notes

Camp

Butte

153,336

11/ 2018

18,804

86

Town of Paradise destroyed[10]

Tubbs

Napa, Sonoma

36,807

10/ 2017

5,643

22

 

Tunnel

Alameda

1,600

10/ 1991

2,900

25

 

Cedar

San Diego

273,246

10/ 2003

2,820

15

 

Valley

Lake, Napa, Sonoma

76,067

9/ 2015

1,955

4

 

Witch

San Diego

197,900

10/ 2007

1,650

6

 

Woolsey

Ventura, Los Angeles

96,949

11/ 2018

1,643

3

 

Carr

Shasta, Trinity

229,651

7/2018

1,604

8

 

Nuns

Sonoma

54,382

10/ 2017

1,355

3

 

Thomas

Ventura, Santa Barbara

281,893

12/ 2017

1,063

2 Direct, 21 Indirect

Indirect deaths resulted from mudslides

Of the top 20 most destructive fires, the sources of 9 are currently undetermined and under investigation and one is shown as “misc.” cause. Of the 10 that were determined, 3 are listed as arson, 2 more as “human related,” 1 as “electrical,” 1 as a rekindled fire, and 3 were determined to have been caused by power lines.  (Source- http://www.fire.ca.gov/communications/downloads/fact_sheets/Top20_Destruction.pdf)

By now you are likely thinking, “Yes, that’s awful, but I don’t live in California and we don’t have those problems here, so what is your point?”

However, while that may be true on the surface, we recently had a conversation with one of our clients whose utility was just hit by a wildfire who said, “If you had told me this would happen to us 2 or 3 years ago I would have told you ‘No way!’ ”

In our experience, dating back decades, wildfires caused by a utility’s negligence are rare and unusual. Yet that doesn’t mean it can’t happen and it has, as we have all read about in the recent costs likely facing PG&E in California. Yes, PG&E is an investor-owned utility, but all utilities should recognize that even under the best operational procedures a series of events can come together to produce ignition that leads to a wildfire. 

By now you may ask, “What’s your point, we know all this already?” Of course we all know about what has just happened in California, it has be extensively covered in all of the types of news media. Most remember how previous similar news coverage reported on stories of prior wildfires in Texas, Oklahoma, Utah, New Mexico and Colorado. 

Wildfires loss costs estimates for this year have reached the billions of dollars and it will take years before the full costs are known and paid. In the meantime, insurance carriers are sitting on large reserves while the liabilities are sorted out, and some homeowner insurance markets are already filing for bankruptcy. The result has been a tightening of capacity within the excess liability and umbrella markets including, in some cases, a limitation of wildfire limits and an increase in the overall excess or umbrella premiums.

 

So what can you do? Please continue doing what you do best; keep up on your line patrols, your ROW work, tree trimming, vegetation control programs, full width clearing, your pole inspections and pole testing. If you contract any of this work out to third parties, make sure your contracts are up-to-date and that you have current certificates of insurance on file as well as Additional Insured Endorsements. Make sure that any problems found are properly reported and logged in, and repaired with all due dispatch. The fact is that preventing problems is the best way, and the only sure way, to help you, help the entire utility community, and the public at large. Prevention is the best medicine!