Wildfire risks are driving up costs for Northwest utilities

by Aspen Ford, Oregon Capital Chronicle
September 4, 2026

When power lines are blamed for starting a wildfire, costs to utilities can stretch into the billions and trickle down to consumers. 

Earlier this year, PacifiCorp settled a federal lawsuit over its lines allegedly starting six fires in Oregon and California, burning nearly 300,000 acres of public land. Thousands of residents also filed claims against the investor-owned utility, which serves 2 million customers in the West.

The company has agreed to pay $2.2 billion to settle roughly 90% of all claims, and it’s preparing to settle more. 

PacificCorp’s woes come seven years after the country’s largest utility company, California-based Pacific Gas & Electric, filed for bankruptcy. This came as the utility faced tens of billions of dollars in potential liability related to deadly fires in 2017 and 2018 that destroyed tens of thousands of structures. 

Anxious to avoid a similar fate, utilities in the Pacific Northwest are spending millions of dollars each year on wildfire mitigation projects. With around 20,000 miles of transmission lines across the region, fire-proofing the grid is a major engineering problem that’s not cheap or easy to solve. 

“At some point, the system will break,” said Jake Gentle, a research manager at the Idaho National Laboratory who tests wildfire technology for grid infrastructure. “And unfortunately, the corporations are the ones that have to pay, which then bill the customers.”

Consumer advocates worry that unchecked wildfire spending will drive up electricity rates. The state’s Utilities and Transportation Commission will soon begin reviewing utilities’ wildfire projects, but there’s concern that it isn’t well equipped to do so. Meanwhile, one state lawmaker is looking at how to safeguard both utilities and residents from the costs of wildfire damages.  

“We’re putting a lot of our wildfire mitigation efforts in Washington state on the backs of utility customers,” said Emily Moore, senior director of climate and energy at Sightline, a sustainability think tank. 

“I think there’s a risk that they are overspending,” Moore said, noting that investor-owned utilities earn a profit after investing in grid infrastructure. 

Utility spending and rate hikes

Washington is unique in that most of its power is supplied by not-for-profit publicly owned utilities and cooperatives, with rates set by city councils or member boards.

The three investor-owned utilities operating in the state — Puget Sound Energy, Avista and Pacific Power, a division of PacifiCorp — serve roughly 1.5 million electricity customers.

When these utilities spend on capital costs to upgrade the grid, including wildfire mitigation measures, they can point to that spending to justify higher electricity rates and earn a return on their investment. The state’s Utilities and Transportation Commission regulates and approves rate increases. The utilities’ profits depend on these hikes. 

Puget Sound Energy, the largest of the three, has spent more than $200 million on wildfire mitigation efforts since 2024, according to a company spokesperson. That funding covers equipment upgrades, smoke-detecting cameras, vegetation management and more.

For wildfire mitigation projects, the utility is spending 10 times more on capital than on operating costs, according to company documents submitted to the commission. 

When utilities spend more on capital projects, it’s “a challenge for affordability, obviously,” Moore said. Higher electricity rates also disincentivize people to switch from natural gas or other fossil fuels to clean energy, she added. 

To ensure cost-effective wildfire spending and avoid excessive rate increases, regulators should scrutinize wildfire mitigation plans, Moore said. But she fears that regulators don’t have enough resources to do so adequately. 

Puget Sound Energy raised its rates by almost 19% for residential customers in January and it’s preparing to increase them again, according to Gerald Tracy, a Puget Sound Energy spokesperson. The utility is spending heavily to meet rising electricity demand and to comply with Washington’s clean energy requirements.

Its new proposal, to be submitted this month, would increase rates over three years with a steep 16.75% hike starting in January 2027, pending the commission’s approval.

“Capitalizing costs enables us to spread the rate impact over several years instead of hitting customers all at once,” Tracy said. 

What if they’re not spending enough?

Powering homes across Washington, Oregon, Idaho and Alaska are 19,000 miles of Avista’s distribution lines. Of those, 36% are in areas with a high risk of wildfire, according to the company’s wildfire mitigation plan. 

“Our power lines go to where our customers are,” said Josh DiLuciano, vice president of energy delivery at Avista. “The nature of our geography is more arid, more dry, more fire-prone.”

The Washington State Department of Natural Resources determined that, in 2019, Avista’s infrastructure sparked the Babb Road Fire in the town of Malden, population less than 250, after a branch struck a power line.

Though the company maintains it was not negligent, total liability costs for the Malden fire were $27 million, according to an Avista filing with the U.S. Securities and Exchange Commission. Avista reported the fire costs had “no impact” on the utility’s net income. It’s possible insurance covered the expense.

Avista is now spending around $65 million a year on wildfire projects, which is less than 10% of its overall investments, DiLuciano said. 

Those projects include burying wires underground, cutting back vegetation, and wrapping poles in fire-resistant material. DiLuciano added that information recorded by the utility’s wildfire cameras is shared with local first responders. 

Gentle, the research manager at the Idaho National Laboratory, thinks utilities are having to “do more with less” as they prepare grids for worsening wildfire conditions. 

Utilities can monitor equipment and model risk, Gentle said, but they cannot predict with certainty which pole or power line will fail. Every risk-reducing option comes with a cost, and in recent years, it’s become more expensive. 

Gentle and his colleagues at the federal research lab have been testing grid technologies under simulated wildfire conditions. The idea is to help utilities decide which to invest in. 

“We got to spend a little bit of money to harden our electric grid so that these massive catastrophic events don’t continue to make the electric bill even higher,” Gentle said.

“Anybody who wants to accuse any type of utility of spending too much money,” Gentle added, “I don’t think they’re spending enough.” 

State regulators

Washington is in the early phase of trying to limit rate hikes caused by a utility’s spending on wildfire projects. A law that took effect in 2025 requires utilities to submit plans that outline such projects to the Utilities and Transportation Commission.

Though the commission received plans from the three investor-owned utilities in 2024, it did not have the authority to approve or reject them. The commission’s first review will occur next year. Three to seven commission employees will review the plans, according to a spokesperson. 

Utilities are required to submit a plan at least once every three years, but there is no standard format. In the 2024 plans, Puget Sound Energy and Avista did not disclose how much they spent on wildfire mitigation projects, but Pacific Power forecasted investing over $10 million.

At the state Legislature, Rep. Kristine Reeves, D-Federal Way, proposed a bill this year that would have created a wildfire liability fund for utilities to tap into to settle wildfire claims. It would have also created a council to oversee the fund. 

“Think of it as like a state version of wildfire insurance,” said Reeves. Utilities could “default to the state” for costs beyond what their insurance covers. She’s worried what will happen if the damage to homes from a fire sparked by power lines is more extreme than what utilities can pay.

The bill didn’t pass because of concerns it would raise utility rates. Reeves plans to bring back a similar bill next year. This time, she’s looking at requiring utilities to carry a certain level of liability insurance. 

“They need to have a level of insurance that’s going to help their community recover,” Reeves said.

Oregon Capital Chronicle is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Oregon Capital Chronicle maintains editorial independence. Contact Editor Julia Shumway for questions: [email protected].