As catastrophic wildfires become more frequent and severe, traditional approaches to cost recovery are proving unsustainable.
A recent article in Utility Dive highlights the growing tension between utilities, ratepayers, and policymakers over who should bear these escalating costs.
Andrew Dressel, a power industry consultant in CRA’s Energy Practice, explains that both utilities and customers are reaching financial limits. Historically, shareholder earnings have been the default source for wildfire-related liabilities, but Dressel notes that recent events represent “a different order of magnitude.” Adding these costs to electric bills could exacerbate affordability challenges for consumers.
Dressel advocates for a broader, more resilient strategy. Rather than relying solely on utilities or ratepayers, he suggests investing in wildfire resilience by strengthening communities through stricter building and zoning standards, supported by tax incentives and programs modeled on energy efficiency initiatives.
