Sam Drevo and his mother love art.
Sam enjoys photography and traveled the world collecting various pieces for their home. His mother, Perry, is a weaver, and made her own textiles on wooden looms.
They called their home the "art house." But that house and everything in it vaporized in the 2020 Labor Day Fires in Oregon.
"It was, yeah, definitely a gut punch," Drevo said. "I mean, it's just changed the trajectory of your life."
One of Oregon's largest public utilities, PacifiCorp., was found "grossly negligent" by a state jury for starting the fires and had to pay more than $1 billion in settlements. They're now trying to appeal.
It's not the first time a utility company has been blamed for the damage caused by wildfires.
In 2018, the Camp Fire in California killed 85 people and displaced 50,000. That catastrophe ultimately bankrupted PG&E — California's largest electric utility — amid a slew of lawsuits from victims, local governments and insurance companies.
In the wake of that incident, and others, bills began cropping up in state legislatures — all striving to limit utility companies' liability for causing wildfires.
Eric Gray is the vice president of government relations for Edison Electric Institute, which represents all U.S. investor-owned electric companies.
"What we're really trying to do is move forward with legislation that really at the end of the day, in our mind, really protects our customers, and really tries to eliminate these just time consuming and expensive litigation [actions] that we're seeing," he said.
A state by state effort
A Mountain West News Bureau investigation found 18 of the country's 19 Western-most states have seen similar legislation or policy regarding utility liability and cost management over the past six years.
In about half of those states some version of the legislation became law.
The sole outlier is Nebraska, the only state in the country with a fully public utility system in which all electricity is generated by consumer-owned, not-for-profit utilities.
In Nevada, the policy change is not in the form of a bill, but is seeking approval of a self-insurance policy through the state's public utilities commission.
California was also an outlier in its approach. Assembly Bill 1054 created new utility mitigation and oversight requirements and established a wildfire fund in anticipation of future utility liability cases rather than exempting the companies from liability.
Each state wound up with a different form of legislation and the outcomes varied, ranging wildly in the protections utilities were able to secure. As a result, in nearly every state, liability protections for utilities are contingent on utilities following a wildfire mitigation plan.
That's the case in Arizona, where state Sen. J.D. Mesnard says he's worried utilities are an easy target for lawsuits. Still, he wasn't comfortable giving the utilities the provisions they initially asked for, like blanket liability and a ban on class action lawsuits by fire victims.
"My approach was, 'You want high protections? You have to have a high threshold,'" he said. "'You want low protections? You can have a low threshold.' They had low threshold, high protections."
In Arizona, firefighters were also proponents of the utility protections, as it is tied to wildfire mitigation plans.
"This situation is inevitable to happen to our state, and what we do to prepare for it is absolutely critical," Tom Caretto testified to Arizona lawmakers on behalf of the Professional Fire Fighters of Arizona. "So, I would ask that you vote in favor of this because we cannot let perfection be the enemy of progress when it comes to wildfire mitigation in our state."
Utilities say they need legal protections because they're vital to everyday life, and don't want the costs of settlements passed on to ratepayers.
Colorado state Sen. Marc Snyder says that's something he had in mind when sponsoring his state's version of a utility liability bill: "I think we recognize that if we put the liability on to the utility provider, that will ultimately just result in larger rate increases for our taxpayers and utility customers."
Barry Aarons represents Arizona Trial Attorneys. He speculates that utilities are really concerned with shareholder exposure.
"I really think that it's a little bit disingenuous to throw out, 'Oh my God, we're just concerned about the people of the state and what it's going to do to their utility costs.' Well, tell that to a community that burns to the ground," Aarons said.
Aarons also questioned utilities' argument that wildfire mitigation plans will incentivize them to work to lower wildfire risk.
"I mean, do you really need the legislature to tell you to have plans to mitigate wildfires? Isn't that in your best interest?" he asked.
Utilities argue that they can't control everything. For instance, they say lightning strikes or overgrown vegetation on federal lands are hard to mitigate.
Meanwhile, wildfire risk is worsening amid a variety of factors, including prolonged drought, longer summer heat waves, and stormier, unpredictable weather.
Utilities worry about the bottom line
Graphic: Chelsey Heath and Camryn Sanchez/KJZZ
The Mountain West News Bureau's review found utilities were blamed for more than 11 wildfires across the West since 2012 — and paid settlements in at least five cases. The cases involve, in most cases, denials by utilities.
In many other cases, utilities have been accused of playing a role in starting a wildfire, but claim they had no impact. For instance, Xcel Energy is "prepared to go to trial" after mediation with hundreds of parties failed regarding the 2021 Marshall Fire, which burned 1,000 homes in Colorado. The Boulder County sheriff, in an investigation, found that Xcel was partly to blame for the fire, an accusation Xcel denies.
Sierra Club attorney Rose Monahan referred to a letter Berkshire Hathaway CEO Warren Buffett sent to shareholders a few years ago sounding the alarm about how wildfire liabilities could impact utilities' profits. Berkshire Hathaway Energy owns several utilities, including PacifiCorp.
"One investment rule at Berkshire has not and will not change: Never risk permanent loss of capital," Buffett wrote. "The regulatory climate in a few states has raised the specter of zero profitability or even bankruptcy (an actual outcome at California's largest utility and a current threat in Hawaii). In such jurisdictions, it is difficult to project both earnings and asset values in what was once regarded as among the most stable industries in America."
Buffett added that investors are becoming "apprehensive" about their rate of return due in part to climate change increasing wildfire risk.
Worsening fire conditions mean more expensive settlements. A small fire might damage only 100 acres and would be easy to subdue. But a wildfire in 90 mph winds going through dry vegetation can be much more destructive.
"We have made a best estimate for the amount of losses that have occurred," Buffet wrote. "These costs arose from forest fires, whose frequency and intensity have increased — and will likely continue to increase — if convective storms become more frequent. It will be many years until we know the final tally from BHE's forest-fire losses and can intelligently make decisions about the desirability of future investments in vulnerable western states."
Not all utilities operate the same way. Former Idaho Sen. Jim Woodward sponsored that state's version of utility liability legislation.
Woodward, who is also a board member of the Northern Lights Electric Co-op, said cooperatives like his are member-owned and don't have shareholders, meaning bankruptcy would be personal and affect individual members.
"We want to have electricity in our homes, yes," Woodward said. "And so if we want to have electricity, we have to make sure we have to have a system in place that is fair and equitable to both: the people who want electricity and the utility that serves them together."
The power of power companies, and the costs of mitigation
Utilities are a powerful entity in each state. They're deeply embedded in government and tend to carry heavy political clout.
Utilities also make hefty political contributions.
Monahan, the Sierra Club attorney, said utilities are operating with a thumb on the political scale.
"If utilities were operating in an open market, they would have the incentive to innovate, to adjust to new market conditions," she said. "They wouldn't have the option of saying, 'Can someone just protect me from this and I won't have to deal with this issue?'"
Utility-caused wildfires usually start with power lines experiencing some sort of problem, like arcing during a storm or a tree falling on a powerline. Systemic overhauls, like burying powerlines underground, could go a long way toward limiting such risk, but to do so can be extremely expensive.
For instance, Travis Million, the CEO of Golden Valley Electric Association in Alaska, puts the cost of an overhead line compared to an underground line into perspective: "If you were talking transmission in Alaska, we typically use between $1-1.5 million a mile for transmission overhead, and if you're looking about four times as expensive, you're probably looking at about $4 million a mile."
According to the U.S. Fish and Wildlife Service, there are about seven million miles of overhead electric power lines in the country. Based on Million's calculation, at $4 million per mile, it would cost about $28 trillion to bury them all.
Buffett wrote of the potential cost of utilities being forced to bury their lines: "Underground transmission may be required but who, a few decades ago, wanted to pay the staggering costs for such construction?"
“Reliability is becoming a secondary factor because of the risk of liability."
As Oregon lawmaker Pam Marsh points out, the cost for burying lines would again come back on consumers.
"The cost involved in burying lines is so tremendous, and it is ratepayers you're going to pay for them," she said.
The cost of wildfire mitigation itself, unfortunately, can lead to higher utility rates.
"Rates have absolutely gone up, but I don't believe that the rates have gone up to reflect the kind of wildfire payoff. … The rates have gone up because the cost of wildfire mitigation are driving the rates, the cost of inflation and the cost of responding to a variety of other climate-related weather events like ice storms have driven the utility to either make repairs or harden systems," Marsh said.
For Marsh, this issue started with the Labor Day Fires, which hit densely populated areas. She said utilities are now being much more careful, to the point of causing multi-hour long power outages out of caution during risky weather because of the risk of liability.
"Reliability is becoming a secondary factor because of the risk of liability," she said.
As a proponent of Oregon's utility legislation, Marsh says she faced blowback and accusations that she and other lawmakers were trying to aid PacifiCorp in their lawsuits, even though the legislation would not apply retroactively.
Marsh said PacifiCorp hasn't recognized the "tremendous enmity" they've generated since the fires.
"Our wildfire survivor issue is very live, and people didn't want to be seen as in conflict in any way with the wildfire survivors," she said.
Marsh said everyone opposed to the utility legislation may end up feeling differently if they end up without electricity.
Who is responsible for damages if not utilities?
If there's a wildfire and state legislation protects the utility at fault from liability, then who pays for the damage? In many cases that would fall to insurance companies, the strongest opposition to utilities' efforts.
State Farm Insurance lobbyist Greg Van Horssen told Montana legislators expensive settlements would hit consumers.
"If we have a problem with recovering costs for burnt-down houses in Montana, from an insurance company's perspective, well then, we only have one option, and that's to raise the rate of homeowner's insurance," Van Horssen said.
Wildfire risk is already causing a widespread issue of rising costs for homeowners insurance across the West, and even resulting in non-renewals in particularly fire-prone areas.
There is still some gray area about who is responsible for shouldering the costs of fire damage outside of insured areas.
Climate change is another wild card.
Monahan said from the Sierra Club's perspective, the utilities are contributing to the problem of wildfires fundamentally because they create greenhouse gas emissions which contribute to wildfire risk in the first place, making it all the more frustrating that utilities want protection from wildfire liability.
"Because if you don't address that problem, we're really not going to get we're not going to make any progress on these mega fires that we're seeing across the West," Monahan said.
The current state of affairs
Few states have granted all the protections utilities are asking for, but lawmakers in several states without utility protections are concerned.
South Dakota state Rep. Carl Perry says it's better to put something in place now, before the state experiences its first utility-caused wildfire, than to have nothing at all and end up like California.
"We looked at the wildfires in Los Angeles and Maui and when they approached me about being the prime [sponsor] on this bill, I thought to myself, 'You know, South Dakota has a lot of forest … and there's a lot of financial liability,'" Perry said.
Washington Rep. Tom Dent said mitigation is important, but it won't prevent all wildfires linked to utilities.
"You can have all the airbags in the world and you can't do anything about it," Dent said.
Proposed utility liability protections ultimately didn't succeed in Washington, but Dent predicted the legislation and debate will return.
Another Washington representative, Kristine Reeves, worked with Dent other utility legislation, but had questioned the intent of the liability provisions.
"We started poking at, 'What's the real intent here? What are you guys really trying to get at?' And I think that's why that bill died," Reeves said.
On the other end of the spectrum is Utah, which passed House Bill 66 in 2020. It includes what are widely-considered the strongest protections for utilities.
"S.B. 224 strengthens Utah's energy future by ensuring reliable, affordable power through a focus on baseload energy resources," Utah Sen. Scott Sandall said.
In comparison, Sandall said "poor policy decisions" in states like Oregon have led to expensive legal actions and rising power bills.
Gray, with Edison Electric Institute, said the legislation is spreading – and utilities are lobbying at the federal level in the wake of fires not just in the West, but spanning from New Jersey to Louisiana.
"Many of our companies are trying to go after this on a state by state level," Gray said. "But then I can tell you we are also trying to approach the issue of wildfires from a national approach as well. This issue is becoming more and more, you know, relevant for the entire country."
“It's just wild to see the political maneuvering that occurs on such a tangible and real issue that affects Oregonians and really affects all the people in the West."
Settlements involving thousands of homes in multiple fires blamed on utilities across the country are a long way off as states, residents and utilities continue to argue over who is to blame.
Four-and-a-half years after the Labor Day Fires, Sam Drevo and his mother are still fighting for compensation from PacifiCorp. They still live in Oregon, and they're getting by.
But others from their community weren't so lucky. Nine people died in the fire. Sam says he knows folks who ended up living in trailers or even under highway underpasses because they didn't have insurance.
He fought against PacifiCorp's legislation in the Oregon Legislature this year.
"I'm sad that you know the community still hasn't really rebuilt, you know, kind of got left behind a little bit by the not a little bit it got left behind by the utilities that they caused the fires. They just sort of turned their back," Drevo said. "That sort of thing makes me sad, you know? And then also there's some anger there, too. As far as just like, why can't we learn, learn lessons and why can't we take responsibility at some point?"
PacifiCorp did not respond to a request for comment.
Drevo is opposed to utilities securing protections in Oregon in the event they start another wildfire.
"It's just wild to see the political maneuvering that occurs on such a tangible and real issue that affects Oregonians and really affects all the people in the West," he said.
Drevo added that his utility rates have also gone up since the Labor Day Fires.
This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Nevada Public Radio, Boise State Public Radio in Idaho, KUNR in Nevada, KUNC in Colorado and KANW in New Mexico, with support from affiliate stations across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting.
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