By Sharon Franklin.
As climate change drastically increases the frequency and severity of wildfires, utility companies say they’re facing growing risk for payouts that could bankrupt them or require massive rate hikes on customers. Across the West, electrical utilities are pushing state lawmakers to grant them legal immunity or limit damage payouts if their equipment sparks a blaze. State legislators in at least eight states over the past few years have passed legislation or have proposed legislation, that would require the utility companies to follow plans to limit their risks of causing a fire. In exchange, lawmakers would give utilities protection from lawsuits that could expose them to billions of dollars in damage claims
What Are Wildfire Victims Saying? Wildfire victims say these bills don’t do enough to protect residents from dangerous electrical infrastructure issues.
What Are Energy Consumer Advocates Saying? Michele Beck, Utah Office of Consumer Services, who advocates for Utah energy customers, says it’s difficult to protect electrical customers and wildfire victims at the same time. “The costs for ratepayers are substantial, and it’s reasonable to try and find a balance between these extremely high jury awards “I admit, it’s a devastating loss for people who are impacted [by wildfires], but somebody is also paying on the other side.”
In Oregon, consumer advocates are similarly torn. Bob Jenks, Oregon Citizens’ Utility Board, stated “It is a difficult place to be, having utilities close to bankruptcy and unable to make investments that are necessary to provide service,” “At the same time, the principle that customers shouldn’t be bailing out utilities for bad practices is a critical standard.”
How Are Utility Companies Responding: Shawn Taylor, Wyoming Rural Electric Association, said “We’re only one wildfire away from bankruptcy,” “Even if we avoid bankruptcy, we’d have huge rate increases to cover the cost of a lawsuit. He and other industry leaders argue that power companies should be granted relief if they take actions to limit their risk, becauseutilities are also facing soaring insurance premiums due to the increasing magnitude of claims they would face if they caused a fire.He cites examples to support their claim, stating that Pacific Gas and Electric Company declared bankruptcy in 2019 because of the $30 billion liability from a series of wildfires caused by its equipment, and Oregon, PacifiCorp is facing billions of dollars in damage claims due to its role in the state’s 2020 Labor Day fires. As reported by the Oregon Capitol Chronicle, PacifiCorp has been a key player backing immunity liability bills in five states.
How Are Insurance Companies Responding: Insurers are saying their own customers could pay the price if lawmakers protect utilities. Greg Van Horssen, State Farm Insurance, testified before the Montana House Judiciary Committee in February, 2025, stating “If we have a problem with recovering costs for burnt-down houses in Montana, from an insurance company’s perspective, we only have one option, and that’s to raise the rate of homeowners’ insurance.” “When you push in one side of the balloon, it comes out somewhere else,”
Brandon Vick, National Association of Mutual Insurance Companies, a trade group noted that more and more residents in fire-prone areas are going without insurance coverage, leaving them with no recourse if they can’t seek damages from a utility. “Utilities are rightfully concerned that they’re gonna do something that causes a catastrophic wildfire.” He went on to say “The question we’ve been posing is, who should be responsible when that ultimately happens? [These bills] are really pushing that liability onto the people who can least afford it.”
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