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Pacific Power, a unit of PacifiCorp, is a major utility company that provides electricity to 800,000 people in Oregon, Washington, and Northern California. Established in 1910, it is one of eight investor-owned electric utilities in California that are regulated by the California Public Utilities Commission (CPUC). Since 2006, it has been a subsidiary of Berkshire Hathaway Energy.
The 2020 Labor Day fires were a series of devastating wildfires that had a significant impact on the state of Oregon. The scope of the lawsuits filed against Pacific Power is something the state hasn’t previously seen, though California is all too familiar with the destructive and negligent behavior of investor-owned utilities. Pacific Power serves 47,000 customers in California and has been linked to the Slater and McKinney Fires, which are still under investigation.
Pacific Power has landed itself in hot water for a number of wildfires in recent years in both California and Oregon. The company’s troubles can largely be attributed to the Labor Day fires in 2020 that burned in several counties across the 2 states. While an official cause has not been determined for the fires, Pacific Power has been implicated in at least 8.
In June 2023, a class action jury determined Pacific Power negligently caused four of the Labor Day wildfires. The jury said the utility was at fault because it did not shut off power despite weather conditions, nor did it clear vegetation that was known to be a fire hazard. Pacific Power is facing similar allegations for the Archie Creek Complex, Slater, and McKinney Fires.
Attempting to avoid responsibility has been a commonality among utility companies, and so far Pacific Power has conducted itself no differently. Attorneys for the plaintiffs in the class action said the utility company tried to cover up and destroy evidence from the Labor Day fires. They collected testimony from North Lincoln Fire & Rescue Chief Robert Dahlman, who was on-site following the Labor Day fires.
“PacifiCorp and their contractors multiple times crossed through our closed areas and went back in to repair their equipment,” he said. According to the attorneys, Pacific Power workers proceeded to destroy poles, power lines, and vegetation, despite the ongoing fire investigation. Pacific Power has also been accused of destroying evidence related to the Archie Creek Fire.
As the investigations, lawsuits, and mitigation efforts continue, Pacific Power finds itself at a critical juncture. The company’s ability to address the challenges posed by wildfires, both in terms of legal accountability and proactive prevention, will shape its reputation and likely the future of investor-owned utilities in the region. The outcomes of ongoing litigation and the effectiveness of the company’s mitigation measures will have far-reaching implications, influencing the safety, affordability, and reliability of essential services provided by Pacific Power.
Due to a string of Labor Day wildfires in 2020, Pacific Power could very likely take on hundreds of millions or even billions of dollars in liabilities for damages in the coming years. Many wonder if the utility will follow in the footsteps of PG&E, who filed for bankruptcy in 2019 following a string of destructive 2017 fires and the deadly 2018 Camp Fire.
Pacific Power appears to want to avoid this measure, as the company asked the Oregon Public Utility Commission to let it potentially pass any costs from the 2020 Labor Day fires onto its customers. The request was filed in June 2023, just days after a jury found the utility company was to blame for the Echo Mountain, Santiam Canyon, South Obenchain, and 242 Fires. Pacific Power said it was only asking for the option to raise customer rates as a fallback if its liabilities were to impact the financial stability of the company.
Customer advocates responded to the request with outrage. “The court found that Pacific Power was reckless and grossly negligent, and included punitive damages meant to punish the company, not customers. Customers should not pay a dime of these costs,” said Bob Jenks, the executive director of the nonprofit Citizens’ Utility Board.
Pacific Power’s situation is part of a larger discussion about the conduct and treatment of investor-owned utilities (IOUs). Finding the right balance between holding utility companies accountable for their actions while also ensuring the companies don’t fail is a complex challenge. Bankruptcy means delays in wildfire compensation and could also mean greater spikes in electrical costs in the long run.
Many have called for the IOUs to be converted into public entities. The spotlight is on state regulators and lawmakers to carefully consider regulations, oversight, and enforcement mechanisms that promote both safety and affordability in the provision of essential services.
In June 2023, Pacific Power was ordered to pay around $90 million in damages for the Echo Mountain, Santiam Canyon, South Obenchain, and 242 Fires. $70 million was awarded to 17 plaintiffs, while the utility was ordered to pay $20 million in punitive damages. This is the largest wildfire penalty ever imposed on an Oregon utility company.
This was only the first phase of the trial—now, thousands of other victims are looking to file claims for damages, which the utility estimates could amount to billions of dollars. However, PacifiCorp lawyers said they will appeal the decision and insist that no additional phase should move forward until the appeals process is complete.
Pacific Power came to a confidential settlement with two families who were victims of the Archie Creek Fire. Kathy Kreiter and Tim Goforth lost their home in the fire and Goforth was left permanently blind in one eye from a fire injury. Phillip and Cassie Strader lost 750 acres of timber in the fire. The families were collectively seeking $69 million dollars in damage.
The investigation into the cause of the McKinney Fire, which destroyed 185 structures and killed 4 people, is ongoing.
Several civil lawsuits on behalf of residents, business owners, and families of those who perished in the fire have been filed. The fire is believed to have been caused by a tree falling onto a Pacific Power power line. The suits allege Pacific Power acted negligently and failed to properly maintain its equipment.
A civil lawsuit filed on behalf of 69 homeowners, business owners, and renters in January 2021 is ongoing. The suit alleges that Pacific Power did not de-energize its power lines despite warnings of dry, hot, and high-speed winds in the area, even when other utility companies did. The suit further alleges that the company did not properly maintain vegetation to protect its power lines from trees crashing into them during high winds.
Another lawsuit was filed on behalf of an additional 42 victims in February 2022. In addition to recovering damages, plaintiffs can make claims under California’s law of inverse condemnation, meaning they will allege that the utility has illegally deprived owners of the use of their property.
Four insurance companies filed a lawsuit against Pacific Power “seeking redress for property damage, loss of use, and other related losses” resulting from the Susan Creek, Smith Springs, and Archie Creek Fires (collectively called the Archie Creek Complex Fire). The suit alleges that the utility company did not de-energize its power lines despite knowledge of a severe weather event and further acted negligently when it re-energized power lines without proper inspection after weather events caused power outages.
The attorneys who represented Kathy Kreiter, Tim Goforth, and Phillip and Cassie Strader for Archie Fire damages filed three more civil lawsuits in late 2022 seeking over $100 million in damages for its clients. The attorneys say they are representing over 200 families and will hold off on filing more cases until they know whether the current cases will go to trial, or if a global settlement will be considered.
A $350 million lawsuit filed by eight timber landowners in Oregon is still pending. The suit alleges Pacific Power’s negligent actions destroyed over 50,000 acres of prime commercial-grade timber.
Since 2020, utility companies regulated by the CPUC have been required to submit a 3-year wildfire mitigation plan supplemented with yearly updates. Pacific Power’s 2023 Wildfire Mitigation Plan shows the company spent roughly $150 million on mitigation efforts from 2020-2022 and plans to spend a little over $300 million over the next three years.
“We’re investing nearly half a billion dollars across our system in wildfire mitigation strategies over the coming years,” reads Pacific Power’s website. “This includes developing an industry-leading meteorology program, rebuilding portions of the grid with equipment upgrades, and using advanced technology to monitor the system while increasing inspections and vegetation maintenance on our lines.”
Pacific Power’s challenge lies in the implementation of its mitigation plans and wildfire safeguards. Despite having strategies and protocols in place, the company has faced accusations of negligence for:
Pacific Power’s catastrophic 2020 wildfire year seems to have given the utility company a wake-up call, though time will tell how efforts will impact its fire footprint. Utility giant PG&E is an example of how a reactionary culture can place a utility company far behind where its mitigation progress should be.
In June 2019, Pacific Power attended a community fair in Happy Camp, California, where personnel shared plans to cut off power to the community to protect it from wildfires when it was most at risk. This action, called a Public Safety Power Shutoff, is used to prevent electrical infrastructure from causing wildfires. Most commonly, the program is used when weather, like high winds, drought, or heat conditions exceed risk benchmarks.
Despite its wildfire prevention plan, lawsuits claim the utility company failed to implement these practices, with disastrous consequences. When severe weather threatened Happy Camp in early September 2020, Pacific Power did not de-energize its power lines, despite conditions surpassing its thresholds, investigations would later reveal. Oregon was facing similar weather conditions, and while other utility companies opted to cut power, Pacific Power did not.
Lawsuits maintain that the Slater Fire, as well as the Archie Creek Complex and four other Oregon fires, were caused at least in part by this inaction. While Pacific Power was not required to cut electricity, the incidents call into question the company’s decision-making and preparedness for a PSPS event.
Indeed, Pacific Power did not have power shut-off plans for most areas where the Labor Day fires ignited, such as Santiam Canyon. Lawsuits argue the utility company “systematically underestimated fire risks across its service territory.” Internal emails revealed the company was aware of the severe wind event but chose not to shut off power.
Since the catastrophic events of 2020, Pacific Power said it has put more focus on its PSPS program, conducting 5 Tabletop Exercises and 3 plan reviews to help better prepare the company and its emergency management personnel.
Before the 2020 Labor Day Fires, Pacific Power had just 12 weather stations and no meteorologists. According to its 2023 Wildfire Mitigation Plan, it now has a team of six meteorologists and has added 83 weather stations in California since 2020.
The utility company also upgraded 103 reclosers between 2020-2022, which are designed to detect electrical faults and can shut off electrical power in milliseconds if a tree branch or other object comes into contact with a power line.
Pacific Power’s vegetation management program has routinely fallen short of requirements set by the Oregon Public Utility Commission. The Commission’s 2019 audit contained 27 pages worth of violations across the state—in 2020, there were 20 pages of violations listed.
Shortcomings in its vegetation management program could very well be to blame, at least in part, for a number of wildfires Pacific Power has been linked to, including the 2022 McKinney Fire.
Internal emails cited in the Labor Day fires class action lawsuit revealed that in 2019, certain trees around Medford had been identified as fire threats but were not removed due to “budget constraints”. Pacificorp’s combined net income for 2019 and 2020 was $1.5 billion—it spent $1.6 million in 2019 and $7 million in 2020 on vegetation management.
According to Pacific Power’s 2023 Wildfire Mitigation Plan, the company inspected 1,425 line miles for vegetation maintenance between 2020-2022, wherein 879 of those miles were beyond routine maintenance. Pacific Power noted it was a key accomplishment.