Building a risk-aware utility with wildfire risk modeling

8-minute read

Quick summary: A four-phase approach to wildfire mitigation that helps utilities assess, prioritize, and reduce wildfire risks effectively

In August 2023, wildfires raged across the island of Maui, causing more than $1.3 billion in damage, 99 deaths, and destruction of nearly 3,000 structures. Investigations indicate that at least one of the fires might have been caused by a downed power line.

As wildfire risks grow across the United States, utilities are taking proactive measures to protect their assets, customers, and communities. More utilities are expanding their use of public safety power shutoff (PSPS) programs—temporary, preemptive shutoffs designed to prevent ignition during high-risk conditions—alongside strategic grid hardening initiatives to provide safe, reliable power to their communities. However, these programs require investment to effectively build and operationalize.

The growing frequency of wildfires is beginning to pose significant challenges for utility providers in regions that have not historically faced these risks. For utilities looking to prepare for regulatory changes and invest in WMP initiatives that deliver incremental value across the organization, we recommend a four-phase approach to achieving risk awareness that is founded in data and analytics.

Four-phase risk-aware approach to wildfire mitigation planning

Our structured approach to wildfire mitigation provides a robust framework that utilities can use to proactively manage and reduce wildfire risk, starting from the ground up. Each phase is driven by predictive intelligence and advanced analytics to ensure utility investment is guided by comprehensive, trustworthy insights.

Phase 1: Defining risk

Defining risk is central to any modeling initiative. Risk definitions, drivers, scenarios, and mitigations will be the bedrock of the risk methodology that a utility designs and uses to operationalize their data for decision making.

Objective: Coalesce on a shared understanding of risk

A wildfire mitigation program spans the entire utility and has applications in asset management, vegetation management, emergency response, community outreach, grid ops, and more. Because of the cross-cutting nature of wildfire mitigation, we recommend a utility start their program by defining what risk means to their organization.

This can be done by establishing the model’s pillars of safety, reliability, and financial feasibility. Defining risk at a high level and distilling risk into drivers and scenarios helps to make clear exactly what problems the utility is looking to solve with risk modeling and what kinds of programs and initiatives might be the focus of the WMP. Potential use cases and WMP initiatives are likely to be identified through this process.

Outcome: The foundational call to action of the WMP is established

With a high-level methodology outlined and potential uses cases and program initiatives identified, the utility is poised to begin planning more specific investments and determining how it will begin to prove value and iterate on its risk modeling capabilities.

Phase 2: Catalyzing risk response

Objective: Align and adapt enterprise risk management (ERM) processes to the WMP

Working across the utility to gain alignment with existing enterprise risk management processes and risk modeling capabilities, define a risk management framework that will guide how the WMP identifies, assesses, and responds to risk. This is an exercise in creating a tactical framework to operationalize insights from risk modeling and apply them to decision making. Using various “levers” such as vegetation clearing and grid hardening initiatives, the utility can generate concrete results such as fewer outages from vegetation contact and a reduced risk of utility-caused ignitions.

It is also an opportunity to gain buy-in for the WMP and initiate a transformational change management process. Utilities that take the time to outline an ERM framework have a clearer pathway towards sourcing use cases, generating useful insights, and planting the seeds for an efficient, sustainable program.

Outcome: A process to operationalize risk intelligence insights across the utility

A WMP is a matrixed, cross-functional program that spans the entire utility. An ERM framework that aligns to the goals and approaches of the WMP sets a process for communicating risk across the utility and ensuring risks have a clear path toward assessment, monitoring, and mitigation.

Phase 3: Building a risk landscape

A comprehensive view of wildfire risk unites information about utility grid assets with information about the geographic areas and environments where assets are located. Utilities want to know if an asset is located near dry vegetation, if it is a part of a circuit that powers a hospital or school or serves vulnerable customers, if it is subject to high winds—the list goes on and on. While many utilities have data that describes their assets, such as asset type, location, and material, many do not have reliable, comprehensive data on geography, weather, and climate conditions. Additionally, utilities may not have the technology infrastructure required to put all of this data together and distill it into a format that lends itself easily to insights and decision making.

Step 3 involves mapping out where in the service territory wildfire risk is most significant and determining the potential consequence of a wildfire ignition. This phase employs geospatial risk models that integrate multiple data sources—such as asset, vegetation cover, fuel loading, and topography—to visualize risk across a utility’s service territory. By pinpointing hazardous areas, the utility can prioritize high-risk zones and lay the groundwork for targeted mitigation strategies.

Objective: Generate asset-level risk scores and rankings for targeted mitigation

Using the risk definitions, drivers, and scenarios from Phase 1, we develop wildfire risk models that use high-quality data to reliably forecast wildfire risk. The predictions from these risk models can be applied to a variety of use cases and often use similar data and business logic.

Utilities that are projecting wildfire risk decades into the future may choose to develop a model that simulates climate changes and considers grid investments and construction projects, with the goal of incorporating insights into strategic planning. Utilities that are currently experiencing heightened wildfire risk conditions or that expect conditions to arise soon may focus on building models that can support emergency response or inform public safety power shutoffs.

Outcome: Risk insights that drive the WMP

With the risk landscape established, the utility has a clear understanding of where risk exists in the service territory, the factors that influence and drive the risk, and potential mitigations that can reduce the risk. Risk predictions are typically made at an asset level of granularity—for instance, circuit, segment, or span—and can be viewed on a map interface where risk scores are overlaid onto the grid alongside asset information. More mature utilities may invest in platforms that offer a more incisive view of the grid and enable an interactive exploration of risk scores that can be adjusted for scenario-based, “what if?” analysis. These types of platforms can be built iteratively in step with IT investment in data management, data governance, advanced analytics, and beyond.

Phase 4: Operationalizing risk awareness

Iteration and improvement is paramount to an effective WMP and crucial to developing risk modeling tools and technologies. These four phases link together into a cycle-drive, repeatable process that can be followed to refresh the WMP on an annual basis and introduce new initiatives and use cases.

The final phase synthesizes insights from the first three phases to develop a strategic WMP that is both actionable and scalable. This phase involves outlining specific initiatives to address identified risks—such as vegetation management and grid hardening—while also setting benchmarks for continual improvement. With a data-driven roadmap in place, utilities can implement mitigative actions, track progress, and refine their approach over time to ensure long-term resiliency against wildfire threats.

Objective: Formulate a comprehensive WMP with strategic goals and a maturity roadmap

We develop a wildfire mitigation plan that translates insights from previous phases into concrete actions and long-term strategies. This phase ensures that the utility is equipped with a strategic, adaptable roadmap for both immediate and sustained wildfire risk reduction.

Outcome: Synergistic WMP programs and initiatives

The comprehensive, actionable WMP provides a roadmap for both short- and long-term wildfire mitigation. This plan enables the utility to manage wildfire risks proactively, with structured goals and benchmarks that facilitate ongoing evaluation and refinement. By aligning immediate actions with future objectives, the WMP supports a resilient, adaptable approach to wildfire mitigation that can evolve alongside changing risk landscapes.

Building a resilient approach to wildfire risk

As wildfire threats intensify, a proactive, data-driven approach to wildfire mitigation is no longer optional for utilities—it’s essential. Through our four-phase framework, utilities can strategically assess, prioritize, and address wildfire risks, ensuring that resources are allocated effectively to safeguard communities, assets, and the environment. From mapping geographic risk to developing asset-specific models and implementing a robust wildfire mitigation plan, each phase builds on the last to create a comprehensive strategy that is both scalable and adaptive.

By leveraging predictive intelligence and advanced analytics, utilities are not only preparing for the wildfire risks of today, but also positioning themselves to respond to future challenges with agility. Our approach provides the tools needed to anticipate risk, direct investments wisely, and maintain operational resilience in the face of evolving wildfire threats. Embracing a structured, phased strategy for wildfire mitigation helps utilities meet regulatory expectations, protect their service areas, and build a safer, more reliable grid for the communities they serve.