How Wildfires Can Fuel Electricity Price Increases and How You Can Extinguish the Spark

“Helicopter 352TA, this is Albuquerque dispatch. Be advised we have a smoke report from a homeowner in the Mountainair district. Smoke is thick and black, and appears to be originating from a transmission line’s right-of-way. Coordinates to follow. Please respond.”

The helibase leaps into action. In less than three minutes, the fire crew is buckled in and the pilot is lifting off the pad. But from the air, they can tell it’s already too late. The rookie lets out a low whistle; he’s never seen a fire so big. What started as a spark from a downed power line is now at least a hundred acres and running. “Albuquerque dispatch, this is Helicopter 352TA,” calls the helicopter boss. “We’re going to need some backup.”

In 2016, 67,743 reported wildfires ravaged 5,509,995 acres, burning in all 50 states. They’re a natural occurrence across the American ecosystem that can actually be good for the environment, with some species of coniferous trees even requiring fire for their pine cones to grow. But, as the U.S. population grows, urban areas and infrastructure are pushing further and further into wild lands, exposing not only our homes and businesses to wildfire destruction—but also our power grid. Any type of disruption increases energy costs for suppliers and distributors who, in turn, pass these on to customers. Disruptions can consist of burnt power poles, downed wires, or even firefighters demanding service interruptions to do their work safely.

If you’re a conscientious homeowner in a fire-prone area, you probably know the steps you need to take to reduce the direct risk of wildfire to your property, like clean gutters, fire-resistant shingles, and brush removal. But any homeowner, from the dry plains of West Texas to the shores of Lake Michigan, can be indirectly affected by wildfire in the form of increased electricity costs. How do you protect yourself from this? Easy. Buy your electricity at a fixed rate from a third party energy supplier.

The Link Between Wildfires and Your Utilities

Search for “blackouts caused by wildfires” online and you’ll find tons of results, from a blaze in Arizona that knocked out power in Texas, to fires in Southern California that caused all kinds of problems for the grid in San Diego.

Chances are, a wildfire isn’t the first thing that comes to mind when your lights suddenly go out. The percentage of power outages caused by natural disasters is small but significant. Since the year 2000, 30 fires have caused power failures, according to data from the Department of Energy. Wildfires have damaged electricity grids from San Diego to Cape Cod. In fact, a 2003 fire in San Diego County left 108,000 homeowners without electricity for more than three weeks. In other words, fire is a hot topic when it comes to your utilities.

Now, while the chance of losing power for three weeks is slim, it’s still important to be aware of the potential threat to your utility bill. When supply is diminished, or repairs are needed, prices increase.

Supply and Demand Smolders During Wildfire Season

When the Horse River Fire ripped through Fort McMurray in Alberta, Canada’s oil sands region, it heavily disrupted a major supply of fuel for power plants. Production plummeted by a million barrels of oil a day, about 40% of the province’s output. With less oil available, power plants had to pay more to obtain it. To recoup this extra cost, they raised the price of the electricity they produced. That’s supply and demand: if there is less product available, it becomes more expensive.

Even just the risk of fire is enough to stimulate price increases. Fires are unpredictable and anything they could affect, including the power grid, becomes unpredictable as well. If a power company suspects a wildfire will damage the grid, they’re likely to proactively raise prices in anticipation of an upcoming shortage. This increase to their rates helps to soften the potential effects of a gap in their electricity supply. Guess what? The average homeowner is the one who will pay for the utility’s assumed loss.

Rebuilding After a Fire

Smokey Bear has some good advice. If you leave your campfire unattended and it escapes, you are legally liable for the cost of suppressing, or putting out, that fire. The same is true of power companies. If a fire is started due to a utility company’s actions (or inactions, such as failing to clear brush from their right-of-ways), they’re on the hook for the cost. Large fires routinely cost millions of dollars, and can reach into the hundreds of millions during an extended campaign. Those costs will find their way to consumers.

Repairs due to wildfires are also costly for utility companies. After a fire sweeps through an area, destroyed power equipment like poles and transmission lines are going to require expensive reconstruction. In remote areas, crews, power poles, and equipment must be flown in by a heavy helicopter. The operational cost of a helicopter like the Sikorsky S-64 Skycrane is $5,000—per hour. That’s $50,000 for a 10-hour day. Just like legal fees, you, the consumer, are going to feel the burn on your electric bill.

Third Party Energy Contains the Cost of Fire

How can savvy power consumers counter the effects of wildfire season on their electric bill? Third party energy suppliers, like Liberty Power, offer the stability of fixed energy rates. They buy electricity wholesale, purchasing large amounts of energy in bulk at a predetermined price. From then on, even if the price of electricity changes, they’ve already bought the energy. This allows them to sell electricity to consumers at a fixed rate, helping to shelter them from the volatility of the market.

To sweeten the deal, energy consumers can even choose electricity produced from sustainable sources, like wind and solar, by purchasing Renewable Energy Credits, or RECs. This customer-centric attitude is especially ingrained in Liberty Power’s culture, and their humble employees are always happy to help. Working with a third party supplier means that, regardless of what’s taking place out in nature, your power bill won’t reach disastrous proportions.   

Wildfires may try to burn you on your energy rates, but third party energy suppliers like Liberty Power help protect your monthly budget from unexpected and uncontrollable fluctuations. It takes time, money, and sweat to control wildfires, but it only takes one conversation with Liberty Power to take control of your energy bill.  


Photo CreditTasi Zoltán

Liberty Power Editorial Team
The Editorial Team at Liberty Power is a swashbuckling group of passionate and creative Energy experts bringing you the hottest topics on exciting market trends, booming products and services, and the latest news in the industry.
March 30, 2017