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When a downed power line sparks a wildfire, the financial fallout rarely stays contained to the burn area. Earlier this year, PacifiCorp agreed to pay $2.2 billion to settle roughly 90% of claims tied to six wildfires in Oregon and California that together burned nearly 300,000 acres of public land, with more settlements still pending. PacifiCorp is a wholly owned subsidiary of Berkshire Hathaway Energy. The scale of that payout offers a useful lesson for anyone watching regulated utilities in fire prone regions, because it shows how quickly a liability event can outpace years of preventive spending.
The memory of Pacific Gas & Electric’s 2019 bankruptcy, driven by tens of billions of dollars in liability from deadly 2017 and 2018 fires, still shapes how Northwest utilities approach risk. With about 20,000 miles of transmission lines crisscrossing Washington, Oregon, Idaho and Alaska, hardening the grid against fire is an expensive and difficult engineering task, one that researchers at the Idaho National Laboratory describe as a system that will eventually strain under its own weight if spending does not keep pace.
Puget Sound Energy, the largest investor-owned utility in Washington and a private company owned by a consortium including Macquarie Group affiliates, has spent more than $200 million on mitigation since 2024, covering equipment upgrades, smoke detecting cameras and vegetation management. The utility already raised residential rates by almost 19% in January, and it plans to file a new three-year rate proposal this month that includes a 16.75% increase beginning in January 2027, pending approval from Washington’s Utilities and Transportation Commission. Company representatives say spreading capital costs over several years, rather than passing them along all at once, is meant to soften the impact on customers, though the cumulative effect on bills is still substantial.
Avista Corporation (NYSE: AVA), which serves customers across eastern Washington, northern Idaho and parts of Oregon, spends roughly $65 million annually on wildfire projects across its 19,000 miles of distribution lines, more than a third of which sit in high-risk fire zones. That spending, company officials note, remains under 10% of Avista’s overall capital investment, even after a 2019 fire near Malden, Washington traced to utility equipment carried a total liability cost of $27 million. Executives at Avista argue the company should be spending more, not less, given how dry and fire prone its service territory has become.
The tension at the center of all this is not really about whether wildfire mitigation is necessary. It is about who decides how much is enough and who ultimately pays for it. Washington’s Utilities and Transportation Commission only gained authority to review utility wildfire plans under a law that took effect in 2025, and its first formal review is not scheduled until next year, with as few as three staff members assigned to the task. State lawmakers have also floated the idea of a wildfire liability fund, similar to a form of state backed insurance, though an earlier version of that proposal stalled over concerns it would push rates even higher.
For anyone tracking capital spending cycles and rate case outcomes among regulated utilities, this pattern deserves attention well beyond the three companies named here. Rising capital expenditures tied to wildfire risk can expand a utility’s rate base and support higher allowed returns, but the same spending invites political scrutiny once customer bills climb far enough to draw public complaint. That dynamic is playing out now in Washington, and it is likely to surface in other wildfire exposed states as regulators, utilities and lawmakers work out how to balance prevention costs against what ratepayers are willing to absorb.
