The U.S. Department of Justice announced on February 20 that it has reached an agreement with PacifiCorp, a utility company, to pay $575 million to settle damage claims related to six wildfires in Oregon and California.
The settlement resolves allegations by the U.S. government accusing PacifiCorp of negligence in causing six fires through its power lines. The settlement funds will be used to reimburse the significant costs incurred by the U.S. government in fighting the fires, as more than half of the U.S. Forest Service’s budget is currently spent on wildfire suppression.
According to the statement, the settlement funds will also be allocated to the Forest Service and the Bureau of Land Management to restore some of the 290,000 acres of public land that were burned.
Of the six wildfires involving PacifiCorp, two occurred in California, namely the Slater Fire on September 8, 2020, and the McKinney Fire on July 29, 2022, which collectively burned nearly 200,000 acres of federal land.
The other four fires took place in Oregon in September 2020, burning nearly 80,000 acres of federal land in total.
The Department of Justice clarified that the allegations involved in the settlement remain accusations, as PacifiCorp continues to deny responsibility for these wildfires.
Adam Gustafson, the Principal Deputy Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice, stated that the settlement aims to ensure fair compensation for the American taxpayers for wildfire-related damages.
Gustafson remarked that the agreement strikes a balance as it resolves significant firefighting costs and natural resource losses without hindering PacifiCorp from providing electricity at a reasonable price.
Following the settlement, PacifiCorp, headquartered in Oregon, announced on the 20th that it will continue to invest in wildfire prevention and mitigation measures. The company is committed to working with regulatory agencies and customers to seek long-term solutions to address wildfire threats.
Ryan Flynn, President of Pacific Power, a subsidiary of PacifiCorp, stated that nearly 90% of the wildfire claims associated with the company have been settled, totaling over $2.2 billion. This brings certainty to customers and drives the company towards financial health goals.
According to data from the National Interagency Fire Center, federal agencies spend billions of dollars each year on wildfire suppression. In 2023, federal firefighting costs exceeded $3.16 billion, significantly higher than the $1.74 billion spent a decade ago in 2013, with an average annual cost of $2.52 billion over the past ten years.
Recently, California State Senator Sasha Renée Pérez introduced SB1076, the Insurance Coverage for Fire-Safe Homes Act. The bill requires insurance companies to insure and continue coverage for residences that meet fire safety standards.
The statement released by her office on the 18th indicated that the bill addresses concerns of wildfire survivors who fear not being able to secure insurance coverage even if their rebuilt homes meet the highest fire safety standards. The legislation mandates insurance coverage for homes that meet reinforcement and defensible space requirements set by the state insurance commissioner.
Pérez stated, “I have spoken with survivors of the Eaton Canyon Fire whose new homes will meet the highest fire protection standards, yet they are concerned about securing insurance. Being denied coverage after meeting safety standards sends the wrong message; it punishes those who have done the right thing.”