Power or fire? A cost-benefit analysis of PSPS

Combining data on 2019 power shutoffs, wildfires, and probabilistic fire simulations we evaluate the tradeoffs between the economic impact of this mitigation strategy and the fire it seeks to prevent.

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Inspiration

Electricity is a key pillar of California's climate mitigation strategy: decarbonize electricity and electrify everything. But at the same time, electricity supply and resilience can be itself impacted by climate change. In California, electric utilities play a large role in the wildfire problem. Conditions of high winds and dry, hot days can lead powerlines to spark nearby vegetation. These same conditions are very conducive to fast wildfire spread. While powerlines start only 10% of wildfires, they have caused almost 50% of the most damaging fires. Following the devastating Camp Fire in 2018, PG&E was held strictly liable for tens of billions of dollars of damage, leading them to declare bankruptcy.

In response to the electricity-wildfire challenge, electric utilities have begun conducting wildfire mitigation plans, comprised of many short- and long-term strategies. One such strategy is called Public Safety Power Shutoffs, a policy in which utilities de-energize high risk powerlines to avoid sparking a fire. While this strategy is relatively new, with adoption really picking up in 2019, it has become very widespread. At times in 2019 and 2020, up to 1 million customers were without power and these outage can last up to days at a time. While the utilities are making this risk-mitigation decision, the costs are borne by their customers. The costs and the effectiveness of this strategy are largely unknown.

What it does

In this study, I seek to answer the following questions:

  1. What is the cost to different economic sectors, regions, and households of these power shutoffs?
  2. How does the cost of this mitigation strategy compare to that of fires?
  3. What are the benefits in terms of avoided fire losses?

How we built it

This project relied on data from the California Public Utilities Commission on power shutoffs and fires that may have occurred without the shutoffs, as well as economic models built by the authors and other collaborators. We evaluated the tradeoffs using 4 steps:

  1. Estimating the reduction in power due to shutoffs
  2. Model the economic impact of the shutoffs to customer classes, sectors, and regions
  3. Model the economic impact of capital stock losses of wildfires that did occur in 2019
  4. Model the impact of losses due to fires that would have occurred without the shutoffs

Challenges we ran into

Working with real data is challenging and very time consuming! There were two major data set-backs with this project. First, we are working with data collected by the CPUC on number of customers impacted by shutoffs. However, this data lacked KEY geographic identifiers. We were able to infer the zipcode of the customer based on additional information in outage reports and some very time-consuming location searches.

To assess the impact of fires that would have occurred without the shutoffs, we use publicly-available simulation reports produced by a private consulting company for the CPUC. We were hoping to work with this company to get actual data, but are instead taking the results from their report. This requires converting PDF maps to spatially-explicit .geotiffs. Another largely manual step.

What's next for Power or fire? A cost-benefit analysis of PSPS

We are still completing the analysis. We hope that the results can inform public utility regulation and policy-planning on cost-effective strategies for addressing the wildfire challenge.

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