The January 2025 Los Angeles wildfires, including the Palisades and Eaton fires, caused an unprecedented $65 billion in total damage and $40 billion in insured losses, making them the costliest wildfire events in insurance industry history. These catastrophic losses have forced insurance carriers to fundamentally reassess exposure management strategies in high-risk regions, creating growing challenges for utilities seeking affordable and sustainable wildfire coverage.
Although utility equipment is linked to only a small proportion of U.S. wildfire ignitions, estimated at roughly 3 percent, these incidents can cause outsized destruction. In California alone, power-line failures were responsible for approximately 19 percent of acres burned between 2016 and 2020. Overall, the total economic cost of wildfires across the U.S. is estimated in the hundreds of billions of dollars annually. What began as a regional concern has now evolved into a national priority, driving a fundamental transformation in how the utility industry approaches wildfire risk mitigation.
As wildfire mitigation for utilities becomes a core issue for regulators, insurers and investors alike, power providers are increasingly being judged not only on reliability, but on their ability to anticipate, withstand and recover from extreme fire events.
Proactive Planning and Utility Wildfire Mitigation Plans
The regulatory landscape has changed dramatically since California introduced the first Wildfire Mitigation Plan (WMP) legislation in 2018. To date, nine states require utilities to develop comprehensive wildfire mitigation plans, with six states passing new legislation in 2025 alone.
This rapid acceleration reflects a growing recognition that traditional reliability-based approaches are insufficient for managing low-probability, high-severity wildfire events. For utilities, wildfire mitigation now encompasses long-term planning, operational controls, grid hardening, vegetation management and emergency response, all designed to reduce ignition risk while maintaining continuity of service.
The shift represents a move from asking “will failures occur?” to “how do we adapt, recover quickly, and evolve when they do?” This resilience-focused mindset typically incorporates five conditions: the ability to withstand disruption, rapid recovery, adaptive response, continuity of critical services, and anticipation through preparedness.
From an insurance and underwriting perspective, the presence, quality and execution of a utility’s WMP is increasingly central to capacity allocation, pricing and long-term insurability in wildfire-exposed territories.
Advanced Wildfire Mitigation Technologies for Utilities
Utilities are deploying increasingly sophisticated operational strategies during extreme fire conditions. The priority has become clear: respond rapidly to faults, keep charged material off the ground, and de-energise broken conductors before they reach the surface.
Advanced grid technologies are central to these efforts. Fast-trip systems rapidly detect and isolate faults, reducing arc duration. Adaptive reclosers use intelligent logic to delay or prevent automatic re-energisation during high-risk conditions. SCADA-enabled devices provide real-time monitoring and control, while some utilities are implementing grounding systems that detect voltage loss and automatically de-energise entire lines before downed conductors contact the ground.
Emerging technologies such as edge computing are further enhancing wildfire mitigation capabilities. New Advanced Metering Infrastructure (AMI) systems can analyse voltage waveforms during fault events, enabling utilities to pinpoint fault locations between transformers by identifying voltage drops. This can significantly reduce patrol areas and dispatch times, improving both safety outcomes and operational efficiency.
For insurers, these technologies provide tangible evidence of risk reduction, particularly when supported by operational data that demonstrates reduced fault duration and faster response times.
Capital Investment in Utility Wildfire Mitigation
The strategies set out in wildfire mitigation plans come with substantial financial commitments. For investor-owned utilities that report detailed breakdowns, capital expenditure represents between 55 and 86 percent of total wildfire mitigation budgets.
Strategic undergrounding costs approximately $2.66 million per mile, compared to $1.21 million per mile for covered conductor and $1.05 million per mile fortraditional system hardening. While undergrounding eliminates overhead ignition sources, its high-cost limits deployment to the highest-risk circuits. Covered conductor and enhanced hardening therefore remain the most cost-effective options for broader system resilience.
Vegetation management continues to be a cornerstone investment, with utilities collectively spending between $6 billion and $8 billion annually clearing vegetation from overhead lines.
From an underwriting standpoint, the scale, consistency and targeting of these capital investments increasingly influence assessments of utility wildfire risk, particularly where mitigation spend is clearly aligned to risk modelling outputs.
Wildfire Risk Modelling and Analytics for Utilities
Perhaps the most significant advancement in utility wildfire mitigation is the integration of sophisticated modelling across multiple time horizons. Utilities now deploy wildfire risk models for long-term planning (annual to decadal), operational awareness (monthly to weekly), and real-time situational awareness during active fire events.
These models combine fire occurrence history, topography, fuel characteristics and weather data to answer increasingly complex questions: what will fire hazard look like a decade from now; if a transmission line ignites a fire, what assets and communities are at risk; where are fires most likely to occur next month?
Crucially, no single model addresses all risk questions. Effective wildfire risk management requires utilities to frame modelling scenarios appropriately, distinguishing between risk from assets (corridor-specific ignition risk) and risk to assets (landscape-wide exposure to wildfire).
For insurers, the use of transparent, well-validated modelling frameworks supports more informed underwriting decisions and enables clearer differentiation between well-managed and structurally challenged portfolios.
Data Collection, Metrics and Measurable Progress
To support modelling and technology deployment, utilities are moving toward standardised, measurable approaches to track wildfire mitigation progress. Metrics generally fall into two categories: attribute-based measures, such as miles of line cleared or assets hardened, and performance-based measures, which assess real-world outcomes such as restoration times and the number of critical customers affected during disruptions.
Effective metrics must demonstrate technical relevance to power systems and wildfire behaviour, be supported by attainable data collection processes, and provide decision-relevant insights that can drive action at both local and system-wide levels.
The availability of consistent, auditable metrics is increasingly important for insurers seeking to validate mitigation performance over time rather than relying solely on stated intent.
Collaboration and Knowledge Sharing Across the Sector
Regional collaboration and knowledge sharing are shaping the next phase of utility wildfire mitigation. Through workshops, peer exchanges and immersive interviews, researchers and industry groups are identifying gaps in decision tools and developing leading practices for wildfire risk assessment.
This collaborative approach recognises that while utilities face unique environmental conditions, design constraints and risk tolerances, many challenges benefit from shared solutions. The development of transparent, actionable standards that can be tailored to location-specific conditions represents a significant advancement for the sector.
The Path Forward for Utility Wildfire Mitigation
The wildfire mitigation journey spans basic hazard assessment, vulnerability evaluation and planning, through to advanced analytics, real-time monitoring and sophisticated grid controls. Success requires not only technology and capital investment, but also multi-entity coordination, community engagement and continuous learning from each event.
Utilities across the U.S. continue to face significant challenges in ensuring infrastructure resilience. The current patchwork of approaches often lacks transparency and consistent measures of progress. However, the industry’s markedly improved response in recent years provides evidence that utility wildfire mitigation is evolving from isolated interventions into a more systematic, data-driven and insurable framework.