After a horrible wildfire season in 2020, this year's wildfire season is off to an even earlier start in Oregon and across the West. The fires have been making national news seemingly every day, with record-breaking "heat domes" becoming common and severe drought literally adding fuel to the fires.
The Oregon legislature took a significant step at the end of this legislative session to address this ever-worsening problem by passing a $200-plus million omnibus wildfire bill, Senate Bill 762 (SB 762). The legislation, which Governor Brown recently signed, establishes more than a dozen new programs to fight and mitigate wildfires, bolster recovery, help communities adapt to smoke, and implement changes to the state's building code to develop structures within high-risk areas in the wildland-urban interface.
Many of these policies are worth attention on their own and will most certainly receive it, but here we focus on one aspect: the effect on electric utilities.
2020 Climate Change Executive Order: A Precursor to SB 762
When legislative efforts to pass comprehensive wildfire legislation failed in 2020, Oregon Governor Kate Brown incorporated some of the intended policies into last year's climate change Executive Order No. 20-04 (EO 20-04). The far-ranging executive order is perhaps best known for its attempts to curb greenhouse gas emissions (among other priorities), but also included directives intended to address Oregon's vulnerability to wildfire.
However, EO 20-04 could only go so far in its reach to address wildfires. For example, EO 20-04 directed the Oregon Public Utility Commission (OPUC) to evaluate the risk-based wildfire protection plans of the investor-owned utilities that qualify as "electric companies" under state law and are most broadly subject to OPUC oversight. EO 20-04 also directed the OPUC to convene periodic workshops to assist not only electric companies, but also consumer-owned utilities (COUs) and operators of electrical distribution systems to collaborate on wildfire risk mitigation best practices.
Implementation of both of these requirements—establishment of risk-based wildfire protection plans for electric companies and utility best-practices workshops—has been underway for some time. The OPUC enacted temporary rules for electric companies' wildfire mitigation plans earlier this year, in advance of the 2021 wildfire season, and is proceeding with permanent rulemaking. And the OPUC is holding a series of workshops on best practices through its "Oregon Wildfire & Electric Collaborative."
SB 762's Directives to Electric Utilities
The effect of SB 762 will be to codify, and in some respects expand on, the aforementioned requirements. It codifies the OPUC's responsibility to foster collaboration between Oregon electric providers and operators on "best practices regarding wildfires" to include both risk-based wildfire protection and mitigation procedures and standards. While similar to EO 20-04's directive, the statute's requirements are arguably intended to be broader in scope by specifically including operators of both distribution and transmission systems in these workshops.
SB 762 is also broader than EO 20-04 when it comes to the requirement for risk-based wildfire protections plans. It codifies the obligation for "public utilities that provide electricity" (a definition that could reach beyond "electric companies," but generally will not include COUs) to prepare, file, and operate in compliance with a risk-based wildfire protection plan, while providing more details into the requirements for such plans and OPUC oversight.
The legislation specifies that such plans must be designed in a manner that seeks to protect public safety, reduce risk to utility customers, and promote electrical system resilience to wildfire damage. This includes identifying: areas prone to heightened risk of wildfire; a mitigation methodology that considers the cost of mitigation and projected reduction of wildfire risk; and preventive actions and programs. The legislation also establishes civil penalties for non-compliance.
Where SB 762 is perhaps most notable with respect to utilities, however, is by mandating that COUs also develop and operate in compliance with a risk-based wildfire mitigation plan. Although these plans must be approved by the COU's governing body, as opposed to the OPUC, the plans are provided to the OPUC for use in the OPUC's other wildfire functions. And the law also requires COUs to regularly update their plans and conduct assessments of their utility facilities consistent with prudent utility practices.
Public Utilities are required to submit their wildfire protection plans by December 31, 2021, while consumer-owned utilities are required to follow suit by June 30, 2022. As noted above, the OPUC was actively engaged in rulemaking on this topic before SB 762's passage. That rulemaking will now need to be reconciled with the new law's requirements.
* Dee is a Summer Associate at DWT and a 2nd year law student at the University of Oregon School of Law.