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Massive wildfires sparked by power lines used to be a California problem, one many utility executives considered safely confined to the Golden State. No more.<\/p>\n
Texas officials on Thursday blamed the state\u2019s largest-ever fire on electrical lines sparking in dry brush, fed by blasting winds into a million-acre inferno. The same combination of high winds, power lines and dry grass last year may have been responsible for razing the seaside town of\u00a0Lahaina on Maui<\/a>, a place once considered too lush to burn. Fast-moving fires blamed on utility equipment leveled homes in Colorado in 2021 and Oregon in 2020.<\/p>\n Across a vast swath of the western US, climate change and aging infrastructure have forced utilities to confront a harsh new reality that threatens both the communities they serve as well as their own survival. The danger first became clear in California, where the state\u2019s largest utility \u2014 PG&E Corp. \u2014\u00a0tumbled into bankruptcy<\/a>\u00a0in 2019 after fires sparked by its power lines killed dozens of people in wine country and the Sierra Nevada foothills. But it\u2019s spreading, as a warmer and often drier climate leaves landscapes primed to burn.<\/p>\n \u201cWe\u2019re having fires at times of the year when we didn\u2019t used to have them \u2014 and in parts of the country where they didn\u2019t used to have them,\u201d said Emily Fisher, executive vice president for clean energy at the Edison Electric Institute, a utility industry trade group. \u201cThe changes are impacting the entire West and are moving further east all the time.\u201d<\/p>\n Investors have noticed. Electric utilities once were considered safe, boring investments, prized for their dividends and slow, steady growth. But last month, famed value-investor Warren Buffett warned the \u201cspecter of zero profitability or even bankruptcy\u201d loomed over utilities in some Western states.<\/p>\n \u201cCertain utilities might no longer attract the savings of American citizens,\u201d Buffett said in his\u00a0annual letter<\/a>\u00a0to investors in his Berkshire Hathaway<\/a> Inc. Berkshire\u2019s PacifiCorp utility faces claims of about $8 billion from fires in Oregon and California that lawsuits blame on the utility\u2019s equipment and this week was hit with a verdict worth at least $29 million in one of the cases.<\/p>\n Read More:\u00a0Buffett\u2019s Oregon Fire Costs Grow as He Sours on Utilities<\/a><\/p>\n Two days after Buffett\u2019s letter, the Smokehouse Creek Fire erupted in the Texas Panhandle and quickly raged out of control. The state forest service on Thursday said its investigators had determined power lines ignited both that blaze and another nearby, the Windy Deuce Fire. Utility-owner Xcel Energy<\/a> Inc. said earlier in the day that its equipment was likely involved in the\u00a0start of the Smokehouse Creek Fire<\/a>, which has destroyed up to 64 homes and killed at least two people. Xcel said it doesn\u2019t believe its power lines sparked the Windy Deuce blaze.<\/p>\n Xcel disputes claims made in a lawsuit filed against the company last week on behalf of a homeowner that it acted negligently in maintaining and operating its power infrastructure ahead of the Smokehouse Creek fire. Xcel, which operates utilities in 8 states in the central and Western US, also faces lawsuits that accuse one of its units of starting the most destructive fire in Colorado history. State officials concluded that was caused in part by a power line that snapped.<\/p>\n The threat has changed the way utilities operate, sometimes in ways that anger their customers. California utilities now switch off power lines when fire danger is highest \u2014 typically, in advance of wind storms during the annual dry season \u2014 leaving homeowners and businesses to fend for themselves. The companies also are spending heavily to harden their equipment, replacing old wooden power poles, covering some power lines with a protective sheath while burying others underground. The inevitable impact on customers\u2019 bills has already provoked a backlash, but more spending may be needed.<\/p>\n \u201cA lot of the focus had been in California for the last decade, but you are seeing more wildfire incidents impact other utilities, and that\u2019s going to put more pressure on the industry overall to address wildfire risk,\u201d said Travis Miller, a utility analyst for Morningstar Inc. \u201cThe recent wildfires have raised some questions about whether utilities are investing enough to maintain a reliable and safe system,\u201d Miller said.<\/p>\n<\/div>\nBuffett\u2019s warning on \u2018certain utilities\u2019<\/h2>\n
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