Studying Wildfire Risks

The paper “Wildfire Modeling: Designing a Market to Restore Assets” by Ramandeep Kaur Bagri presents a comprehensive investigation into the relationship between wildfires, climate change, electrical corporations, and the development of a market mechanism for wildfire risk management and fund allocation. The study focuses on California, where wildfires have become increasingly common and destructive, partly due to climate change and the role of electrical corporations in ignition. The thesis proposes a novel approach to collect wildfire funds or charge customers based on their location’s wildfire risk to maximize social impact.

Key Concepts and Findings:

  • Electrical Corporations and Wildfires: The study discusses how electrical corporations can cause wildfires through various means such as vegetation contact, infrastructure failure, and conductor clashing, among others. It highlights the significant impact of wildfires caused by electrical utilities, referencing specific events like the North California wildfires of 2017 and 2018.
  • Wildfire Funds and Charges: The research details California’s legislative efforts (e.g., AB1054) to establish a Wildfire Fund, financed by state-issued bonds and contributions from electrical corporations. This fund aims to support affected customers and utilities, financed in part by a flat rate charge to all utility customers.
  • Data-Driven Wildfire Risk Assessment: The proposal emphasizes the use of data-driven techniques to assess wildfire risk based on location. By analyzing historical data on wildfires and their causes, the study aims to forecast future risks and prioritize mitigation efforts accordingly.
  • PSPS (Public Safety Power Shutoffs) Data: The study examines PSPS events as a strategy to prevent wildfires by de-energizing power lines during high-risk conditions. It critically assesses the impact of PSPS events on different communities, suggesting a need for a more nuanced approach.
  • Risk-Based Locational Marginal Pricing (LMP): The thesis proposes incorporating wildfire risk into the economic dispatch model for electricity pricing, suggesting a method to adjust charges based on wildfire risk associated with customers’ locations. This approach aims to reflect the true cost of wildfire risk in energy prices, promoting fairer distribution of wildfire-related costs.
  • Social Impact and Policy Recommendations: The study underscores the importance of aligning wildfire risk management with social equity principles. It recommends policy changes to ensure that charges related to wildfire risk are distributed more equitably, taking into account the varying degrees of risk across different locations.

In summary, Bagri’s thesis contributes to the ongoing discussion on how to manage and mitigate wildfire risks in a changing climate, with a particular focus on the role of electrical corporations and the development of a market mechanism for equitable risk and fund distribution. The study’s findings and recommendations aim to enhance the resilience of electrical infrastructure to wildfires and improve the fairness of cost distribution among utility customers.

How to Prepare for Wildfire Risks

Wildfires have become a new normal in many parts of the world, particularly in California, where the combination of climate change and certain human activities, including those of electrical corporations, significantly increase the risk. Understanding these risks and preparing for them is essential for the safety and well-being of individuals and communities. This blog post delves into the complexities of wildfire risks and offers practical advice on how to prepare for them.

Understanding Wildfire Risks

Wildfires can be ignited by various factors, including natural causes like lightning or human activities such as electrical equipment failure, vegetation contact with power lines, and infrastructure weaknesses. Climate change exacerbates these risks by creating hotter, drier conditions that make vegetation more flammable.

Electrical corporations have been identified as significant contributors to wildfire ignition. Events like conductor clashing, equipment failure, and vegetation contact with power lines under extreme weather conditions have led to devastating wildfires. Recognizing these risks is the first step in preparing for them.

Preparing for Wildfires: Actionable Advice

1. Stay Informed

  • Risk Assessment: Understand the wildfire risk in your area. Regions with frequent dry, hot winds, and abundant dry vegetation are at higher risk.
  • Alert Systems: Subscribe to local alert systems for immediate information on wildfire threats and Public Safety Power Shutoffs (PSPS) events.

2. Create Defensible Space

  • Vegetation Management: Maintain a buffer zone around your property by clearing away dead plants, grass, and weeds. This reduces the chance of a wildfire reaching your home.
  • Safe Landscaping: Opt for fire-resistant plants and materials in your landscaping to create a moist, green barrier around your home.

3. Home Hardening

  • Roof and Vents: Use fire-resistant roofing materials and cover vents with metal mesh to prevent embers from entering your home.
  • Windows: Install dual-pane windows with one pane of tempered glass to withstand heat better.

4. Emergency Plan and Kit

  • Evacuation Plan: Have a clear evacuation plan that includes multiple escape routes. Practice this plan with all household members.
  • Emergency Kit: Prepare an emergency kit with essentials such as water, food, medications, important documents, and supplies for pets.

5. Community Preparedness

  • Community Efforts: Engage with local community preparedness efforts. Shared initiatives like community firebreaks can significantly reduce risk.
  • Education: Educate your community about the risks and how to mitigate them, including the importance of electrical safety and vegetation management.

The Role of Electrical Corporations and Policy Implications

Electrical corporations and policymakers play crucial roles in managing wildfire risks. Efforts include improving infrastructure resilience, vegetation management near power lines, and implementing strategic power shutoffs during extreme weather conditions to prevent wildfire ignition.

Consumers should be aware of policies like Risk-Based Locational Marginal Pricing, which aims to distribute the costs associated with wildfire risks more equitably. Understanding these policies helps consumers advocate for fair practices and supports community resilience.

As wildfires become increasingly common, understanding the risks and taking proactive steps to prepare is more important than ever. By staying informed, creating defensible space, hardening homes, preparing for emergencies, and engaging in community efforts, individuals can significantly reduce the risk to themselves and their communities. Additionally, staying engaged with the actions and policies of electrical corporations and local governments ensures a collective approach to managing and mitigating wildfire risks.


  • Anika Patel

    Anika Patel boasts an extensive understanding of financial markets from her tenure at Goldman Sachs and roles such as Portfolio Manager and Financial Advisor. With degrees from Stanford and Wharton, she's also an author and adjunct professor, advocating for financial literacy among marginalized communities. Anika's work, praised for breaking down complex concepts into digestible steps, centers on personal finance, investment strategies, and wealth management, with a keen interest in ESG investments.

    View all posts

Leave a Comment