2024-04

Policies for Wildfire Mitigation, Management and Resiliency

Sponsored by

Angela Romero (UT), Angel Fourquet (PR) and Rep. Eva-Dina Delgado (IL)

Reported to the Caucus by the NHCSL Energy, Infrastructure and Environment Task Force

Rep. Eva-Dina Delgado (IL), Chair

Unanimously ratified by the Caucus on November 23, 2024

WHEREAS, in Resolution 2018-14, the National Hispanic Caucus of State Legislators addressed the need for investing in and maintaining a modernized grid that ensures resiliency, reliability and safety, potentiating smart cities and electric vehicles, with an intentional focus of providing for the most under-served and vulnerable communities, and recognized the important role that electric companies play in achieving those goals; and,

WHEREAS, in Resolution 2019-20, the National Hispanic Caucus of State Legislators recognized the destabilizing impact of climate change and its disproportionate effects on indigenous peoples, communities of color, migrant communities, rural communities, the poor, low-income earners, women, the elderly, people with disabilities, and young people; calling for solutions that solutions that center on equity and justice, including an energy-efficient smart grid and policies that prepare communities across America to mobilize if a climate emergency occurs; and,

WHEREAS, climate change has created warmer and drier conditions leading to longer and more active and destructive wildfire seasons that continue to challenge communities, public safety and the energy grid, especially communities of color[1] in the heavily Hispanic states of the west and southwest, and must be addressed holistically; and,

WHEREAS, many insurance companies are leaving the wildfire insurance market in the face of increased risks, making it difficult for homeowners, small businesses, farmers and electric companies to procure appropriate, affordable insurance to address wildfire risks and losses.[2] For example, the number of California homeowners using the more-expensive FAIR Plan fire and smoke insurance of last resort has tripled in the last five years,[3] despite new regulations allowing insurance companies to use catastrophic models to set more expensive insurance rates, the same last-ditch allowance that led to Florida’s current out-of-control insurance inflation;[4] and,

WHEREAS, recognizing these risks as they pertain especially to farming and other outdoor work, in Resolution 2021-13, the National Hispanic Caucus of State Legislators called for legislation creating a fund to replace wages lost when extreme heat or active wildfire evacuation zones make it unsafe to work; and,

WHEREAS, in terms of the grid, many electric companies are working to limit potential wildfire ignitions by deploying new technologies to ensure better situational awareness and wildfire detection capabilities,[5] undergrounding of select high-priority lines; using covered conductors to limit sparking of broken lines; and expanding use of automatic reclosers with more sensitive settings to prevent sparking when debris blows into power lines; and,

WHEREAS, the final report of the federal Wildland Fire Mitigation and Management Commission also added that,

Given the widespread impact that utility-caused ignitions can have, some utility providers have begun proactively shutting off power during times of high wildfire risk to prevent wildfires. These shut-offs are a valuable tool in reducing wildfire ignition risk but are not a standard practice across all utility providers. De-energizing transmission lines during a wildfire event is also sometimes needed to enable firefighters to use aerial suppression agents or to work safely near powerlines. However, it should be noted that the resulting power outages from these shut-offs, whether undertaken proactively or in response to an ignition, can be impactful, costly, and widespread. One study on proactive shutoffs in California identified approximately 12 million person-days of outages in 2019. During that same year, costs of proactive shutdowns were estimated to be $10 billion. Those medically dependent on consistent power and populations more vulnerable to heat are especially impacted during power loss events;[6] and,

WHEREAS, in addition to those preventive actions and investments by utilities, a range of other actors must also address their contributions to increased wildfire risks. This includes federal, state, and local land managers, whose practices can contribute to dangerous fuels loads,[7] and homeowners who fail to employ basic strategies to protect their property in the event of a wildfire; and,

WHEREAS, after evaluating the liability and insurance issues, the Wildland Fire Mitigation and Management Commission recommended, among other things, that:

1. Congress should advance legislation to support a compensation or claims fund for burn damages to third parties that can quickly provide financial relief in instances when burn practitioners adhere to identified best practices;[8]
2. Congress request a comprehensive study on the relationship between financial protection solutions available through the private market and federal disaster recovery to support federal efforts to modernize federal post-disaster recovery benefits that ensure resources are complementary rather than conflicting;[9]
3. Congress amend the Stafford Act to allow section 1206 funding for code enforcement for up to 24 months rather than the current 180 days;[10]
4. Congress should establish dedicated funding for the Natural Resources Conservation Service Emergency Watershed Protection Program with an insurance pool for state, county, or city government, special district, or Tribal government sponsors;[11]

WHEREAS, electric utility companies are not structured to meet the required risk diversification, solvency or other conditions regularly required of an insurance company. Despite this, and especially due to the insurability concerns caused by insurers leaving the wildfire insurance market, wildfires create the potential for uncapped liability for electric companies, forcing them to function as a de facto insurer of last resort even before any responsibility for a wildfire has been determined; and,

WHEREAS, the federal Wildland Fire Mitigation and Management Commission further recommended that:

1. Congress should increase funding and technical assistance to state, local, Tribal, and territorial partners to manage post-fire recovery and incentivize the development of state and local post-fire recovery capacity;[12]
2. Establish a new grant program to fund local, state, Tribal, and territorial entities to build disaster sheltering, expand housing capacity, undertake pre-event planning, and support community readiness;[13]
3. Congress enable more flexible use of existing disaster grant funding and expansion of agency authorities in order to increase local, state, Tribal and territorial capacity to design and implement post-disaster and permanent housing solutions;[14]
4. Congress allow utilization of existing sources of mitigation funding, like Hazard Mitigation Grant Program (HMGP), the Building Resilient Infrastructure and Communities (BRIC) and the National Flood Insurance Program, to reduce future loss to housing resources and build community resiliency post-fire;[15]
5. The creation of standards[16] for electric utility wildland fire mitigation plans, encouraging the adoption of those plans by all transmission and distribution electric utilities while providing “a mechanism to incentivize and expedite ignition-resistant infrastructure improvements;”[17]
6. Congress should help advance efforts by the Alliance of Forest Fire Compacts, State Foresters, and others to update regional compacts to meet modern fire management needs and to submit the updated compacts for congressional approval;[18]
7. Congress should increase accessibility of federal grants for community wildfire risk reduction and post-fire recovery efforts;[19]
8. Congress should expand equitable access to funds, including by providing agencies the authority to reduce or waive match requirements when needed;[20]
9. Congress should ensure alternatives to reimbursable funding mechanisms are available and accessible;[21]
10. Congress should ensure funding prioritization includes socioeconomic demographics for populations disproportionately impacted by wildfire who reside in high hazard areas;[22]
11. Congress should broaden the Stafford Act’s definition of “Small Impoverished Community” by raising the population threshold from 3,000 persons to 50,000 (further recognizing that some may be inside larger geographic units) and by allowing an interpretation of impoverished that shifts from a single qualifying metric to a menu of available metrics can help communities use the most appropriate and representative metric of impoverished.[23]

THEREFORE, BE IT RESOLVED, that the National Hispanic Caucus of State Legislators recognizes the threat that increasing wildfires pose to communities across the United States and endorses the recommendations of the final report of the federal Wildland Fire Mitigation and Management Commission, stressing the locally-informed and equitable option in the cases where the Commission provided several; and,

BE IT FURTHER RESOLVED, that the National Hispanic Caucus of State Legislators further recognizes the important role played by electric utility companies in preventing wildfires and urges state and local officials to collaborate with regulators, policymakers, and stakeholders to develop policies to facilitate electric companies making significant investments to reduce wildfire risks and to ensure that the energy grid can provide resilient clean energy in the face of climate change, further urging Congress to fund the related initiatives identified by the Wildland Fire Mitigation and Management Commission; and,

BE IT FURTHER RESOLVED, that the National Hispanic Caucus of State Legislators urges Congress to collaborate with regulators, policymakers, and stakeholders to explore a national approach to address the potential for large liabilities associated with wildfires, that takes into account that utility companies are not structured to meet the required risk diversification, solvency or other conditions regularly required of an insurance company and should not act as such; at the same time that it also expands the scope of the Stafford Act to help mitigate the impact on communities as recommended by Wildland Fire Mitigation and Management Commission.

THE NHCSL ENERGY, INFRASTRUCTURE AND ENVIRONMENT TASK FORCE, AT ITS MEETING OF MARCH 14, 2024, UNANIMOUSLY RECOMMENDED THIS RESOLUTION, AS AMENDED, TO THE EXECUTIVE COMMITTEE FOR APPROVAL.

THE EXECUTIVE COMMITTEE UNANIMOUSLY APPROVED THIS RESOLUTION AT ITS MEETING OF MARCH 24, 2024.

THE NATIONAL HISPANIC CAUCUS OF STATE LEGISLATORS UNANIMOUSLY RATIFIED THIS RESOLUTION AT ITS ANNUAL MEETING OF NOVEMBER 23, 2024 IN DENVER, COLORADO.

[1] Wildland Fire Mitigation and Management Commission, Final Report, p. 126 (Sept. 2023) (citations omitted) Available at https://www.usda.gov/sites/default/files/documents/wfmmc-final-report-09-2023.pdf

[2] Id., at p. 45-46.

[3] John Lynch, More SLO County homeowners are losing their fire insurance. What are their options? (San Luis Obispo Tribune, Mar. 8, 2024) Available at https://www.sanluisobispo.com/news/local/article285704141.html

[4] Lindsey Holden and Maggie Angst, California cuts insurance deal forcing home coverage in fire zones — but it could raise prices (San Luis Obispo Tribune, Sep. 23, 2023) Available at https://www.sanluisobispo.com/news/california/article279386284.html

[5] Wildland Fire Commission, Final Report, p. 213.

[6] Wildland Fire Commission, Final Report, p. 49.

[7] Id., at p. 51.

[8] Id., at p. 58.

[9] Id., at p. 138.

[10] Id., at p. 139.

[11] Id., at p. 147.

[12] Id., at p. 137.

[13] Id., at p. 141.

[14] Id.

[15] Id., at p. 143.

[16] The Commission was split on whether or not they should be federally mandated “in the face of existing state approaches that may better reflect the state’s unique conditions and work with utilities.”

[17] Commission, Final Report, p. 51-52.

[18] Id., at p. 110.

[19] Id., at p. 247.

[20] Id., at p. 248.

[21] Id., at p. 249.

[22] Id.

[23] Id. at p. 250. This recommendation follows the same concern of NHCSL Resolution 2020-02 that official poverty calculations and funding formulas have historically failed to fully capture the disproportionate burdens faced by the urban poor and other communities.