Utility owes $73M for wildfire damages. Now it wants to scale back liability in Idaho

Months after it was found culpable for destructive Oregon wildfires, an energy utility company has asked officials in Idaho and other states to reduce its liability for wildfires, prompting concern from fire victims and an Idaho environmental group.

PacifiCorp, which serves approximately 90,000 customers in eastern Idaho under the name Rocky Mountain Power, sent requests to public utility officials in Idaho, Oregon, Washington, California and Utah to limit its wildfire responsibility to economic damages, like property loss or repair.

The company would not be on the hook to pay punitive damages — considered a punishment for bad behavior — or other types of compensation, such as for pain and suffering.

PacifiCorp officials said the change would help keep electricity rates lower for customers, but critics say it could set a dangerous precedent that lets utilities skirt responsibility as the risk of wildfire in the West continues to grow.

PacifiCorp settles Oregon wildfire complaints

PacifiCorp submitted its request to revise its agreement with the Idaho Public Utilities Commission in October. Late last month, the commission created a public comment period for written feedback, which is due by Jan. 23. Comments can be submitted online at puc.idaho.gov or mailed to the commission.

Brad Heusinkveld, energy policy associate for the Idaho Conservation League, told the Idaho Statesman the application caught his eye because it’s “a really, really dramatic request.”

The proposal would protect PacifiCorp from future claims similar to those it was found responsible for in Oregon earlier this year. In June, a jury ordered the company to pay at least $73 million to a group of plaintiffs whose property was damaged in the destructive 2020 Labor Day Fires, Oregon Public Broadcasting reported. The jury found the company guilty of gross negligence and recklessness after it refused to cut power from some of its lines despite warnings of extreme fire risk.

Nearly all of the damages — $68 million — were for emotional suffering. If PacifiCorp’s proposals are approved, the company would no longer be responsible for such costs in future claims. The company settled 463 additional complaints associated with the fires for $299 million last week, according to a financial disclosure with the Securities and Exchange Commission.

PacifiCorp’s application has drawn the ire of Labor Day Fire victims and a utility customer advocacy group. Sam Drevo, one of the plaintiffs from the Oregon case, told The Oregonian he was “shocked by this disgusting proposal” and felt non-economic and punitive damages were the only deterrent consumers had to keep utilities from repeating negligent behavior.

In an emailed statement, PacifiCorp spokesperson Jona Whitesides told the Statesman the company believes its request aligns with other liability precedents in the West and that Rocky Mountain Power customers stand to benefit, too. Whitesides said approval of its proposal would “shield (customers) from some of the costs associated with third-party wildfire claims.”

In its application, PacifiCorp noted that the recent Oregon ruling meant its credit was downgraded from A to BBB+, making it more expensive for the company to access financing. It said that could hamper its ability to serve customers and improve its equipment.

Whitesides said PacifiCorp is “continually upgrading critical infrastructure” and has made improvements, including covering conductors and upgrading fuses to mitigate wildfire risk.

Who pays for wildfires?

If PacifiCorp’s proposal is approved, the change will only apply to Rocky Mountain Power, commission spokesperson Adam Rush told the Statesman.

But Heusinkveld said the proposal is part of a larger shift. He said as wildfires become more common and more destructive because of climate change, they’ve raised a big question: Who is responsible for paying for the damage they cause? He said that’s being decided now by the Public Utilities Commission.

“Wildfires in a growing and drying American West will be larger, more frequent, more damaging and more costly, and we’ve known this for decades,” Heusinkveld told the Statesman. “But we haven’t known who gets to pay for that.”

Cassie Koerner, assistant director of research for Boise State University’s CAES Energy Policy Institute, said in an interview that the electric grid has long been linked to wildfires because of the inherent risks of running electricity through transmission lines. As the U.S.’s energy grid infrastructure ages, drought and climate change as well as shifts in the wildland-urban interface — where homes meet forest and rangeland — have created a complex fire relationship, she said.

PacifiCorp’s Oregon case was one of a series of high-profile wildfires involving utility companies. The 2018 Camp Fire in California and August Lahaina Fire in Maui were also tied to electric utilities. Koerner said it’s becoming increasingly common for utilities like PacifiCorp to prompt “bottom-up” policies on utility liability, especially as states have adopted vastly different approaches.

For companies that operate in multiple states, that means a ruling like the one in Oregon can impact customers across state lines.

Koerner said often utilities are viewed as a monopoly, but their costs trickle down to customers when the company is on the hook for a big payout. Often that can mean rate increases on a necessary public service.

“If a utility goes under, that public good is no longer provided,” Koerner said. “The cost ultimately is paid by the customer, so there has to be some sort of balancing in liability.”