Cars and homes burned in the Smokehouse Creek Fire in Fritch, Texas. Jordan Vonderhaar/Bloomberg via Getty Images
Massive wildfires caused by power lines were once a problem in California, and many utility executives thought they were safe if they were confined to the Golden State. No more.
Texas officials on Thursday blamed the largest fire in the state's history on a power line that sparked in dry brush as winds whipped through the million-acre inferno. Last year, the same combination of high winds, power lines and dry grass may have been responsible for destroying Lahaina, a coastal town on Maui that was once thought to be too green to burn. In Colorado in 2021 and Oregon in 2020, homes were destroyed by rapid-fire fires blamed on utility equipment.
Across vast swathes of the Western United States, climate change and aging infrastructure are forcing electric utilities to confront harsh new realities that threaten both the communities they serve and their own survival. The danger first came to light in California, where PG&E, the state's largest electric utility, announced in 2019 after power line fires killed dozens of people in wine country and the Sierra Nevada foothills. It fell into bankruptcy in . But it is spreading as warmer and often drier weather makes landscapes more flammable.
“We're seeing fires at times when we didn't have fires before, and we're seeing fires in areas where we didn't have fires before,” said Emily, executive vice president of clean energy. Fisher said. Edison Electric Research Institute, Utility Industry Association. “Changes are affecting the entire West and are constantly moving further east.”
Buffett's warning about utilities
Investors have noticed. Power companies were once considered a safe, boring investment, prized for their dividends and slow, steady growth. But last month, prominent value investor Warren Buffett warned that utilities in some Western states were facing “the threat of zero profitability or even bankruptcy.”
“Some utilities may no longer be able to attract American savings,” Buffett said in his annual letter to Berkshire Hathaway investors. Berkshire's PacifiCorp utility is facing a nearly $8 billion claim for fires in Oregon and California, blaming the utility's equipment for the lawsuit. And this week, one of the lawsuits resulted in a judgment worth at least $29 million.
Read more: Buffett's Oregon fire costs increase as utility costs hit
Two days after Buffett's letter, the Smokehouse Creek Fire broke out in the Texas Panhandle and quickly grew out of control. The state Forest Service announced Thursday that investigators determined that power lines ignited both that fire and another fire nearby, the Windy Deuce Fire. Power company owner Xcel Energy said on the same day that its equipment was likely involved in the Smokehouse Creek fire, which destroyed up to 64 homes and killed at least two people. Excel said it does not believe its power lines caused the Windy Deuce fire.
Excel has filed a lawsuit against the company last week on behalf of homeowners, alleging it acted negligently in maintaining and operating power infrastructure prior to the Smokehouse Creek fire. disputes the claim. Excel, which operates utilities in eight states in the central and western United States, also faces a lawsuit accusing its division of one of the most destructive fires in Colorado history. State officials concluded that a downed power line was partly to blame.
This threat has changed the way utilities operate, in some cases to the point of angering customers. California power companies now shut down power lines when fire danger is highest, usually before each year's dry season storms, leaving homeowners and businesses to fend for themselves. The companies are also spending heavily to strengthen their facilities, replacing old wooden utility poles, covering some power lines with protective sheathing and burying others underground. The unavoidable impact on customers' bills is already causing a backlash, but could require further spending.
“While much of the focus has been on California over the past decade, there has been an increase in wildfire incidents impacting other utilities as well, increasing wildfire risk across the industry,” said utility analyst Travis Miller. “There's going to be more pressure to deal with that.” “Recent wildfires have raised some questions about whether utility companies are investing enough to maintain reliable and safe systems,” Miller said.
