Given the strong linkage To meet these objectives, we propose that utilities of structure loss to electric infrastructure, one of the in other states and their regulators apply the Califor- most effective steps that the United States can take to nia Playbook summarized in table 1 in the context of avoid losses that will threaten insurance and broader their service territories and for the federal g. [...] The aim of such a poli- ing (Step 5 of the California Playbook) not be an ex- cy, if enacted, would be to mitigate risks to electricity plicit requirement for access, but that it be left to the customers, to electric utility shareholders, and to the discretion of a given utility and its state regulator. [...] li- will impact both costs and reliability of electricity, the ability frameworks for wildfire, which assign all liability mechanism for creating a catastrophic risk pool, the for a wildfire to the ignition source, electric utilities are necessary size of such a risk pool, and who pays to the actor likely to pay for wildfires ignited by electric fund the claims-paying capacity needed to create the. [...] This tions to the grid to harden it) is likely to be much more authority would be responsible for setting standards context-specific, both in terms of what steps are ap- for wildfire mitigation planning and implementation, for propriate and in terms of willingness of jurisdictions to review and approval of plans, and for auditing com- pay the costs of expensive steps that, in the end, serve plianc. [...] Since the first losses due go above and beyond the minimum standards set by to any covered wildfire would be the responsibility of the federal wildfire safety regulator, the attachment the utility that caused the fire, the fund would require point (i.e., the level above which the insurance mech- less capital than it otherwise might.
Related Organizations
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Table of Contents
- 1. Introduction 7
- 2. The challenge 8
- A. The growing problem of utility-ignited wildfire 8
- B. Allocation of liability for utility-ignited wildfire 9
- C. California’s Utility Wildfire Mitigation Playbook 10
- D. Growing consequences of a failure to manage utility wildfire risk 12
- 3. The proposal 14
- A. What a proposal to better manage utility wildfire risk needs to deliver 14
- B. Minimum standards for federal utility wildfire safety regulation 14
- C. Catastrophic risk insurance for utilities that meet safety standards 17
- 4. Questions and concerns 20
- 5. Conclusion 22
- Endnotes 23
- References 24
