On March 5, 2025, the Assembly Utilities and Energy Committee held a hearing on Utility Wildfire Spending. In the wake of the Los Angeles fires, the state is considering how to mitigate wildfires sparked by utility infrastructure, and they should utilize the potential of distributed energy resources to build a cleaner, more resilient electricity system.
The following testimony was given to the committee by Allison Hilliard, Legislative Manager for The Climate Center:
Hello Chair and committee members, my name is Allison Hilliard and I am the Legislative Manager for the Climate Center. Thank you for the opportunity to provide public comment.
As the state considers how to mitigate wildfires sparked by utility infrastructure, one low-cost approach is to avoid building the infrastructure in the first place. By incentivizing utilities to use more distributed energy resources (DERs) to serve local load, not only can we avoid building expensive transmission infrastructure, but if deployed correctly, these resources can provide resilience during natural disasters when the grid may be down. Proper integration of DER assets can help reduce the need for additional infrastructure, such as poles and wires, leading to cost savings for all ratepayers.
This is an opportunity to lower electricity costs by utilizing distributed energy assets that can shift, store, and deliver energy during times of peak demand, reducing stress on the grid.
Microgrids built to support critical facilities in the community can also reduce customer costs by helping to shift and shape load, absorbing excess energy in the middle of the day, and allocating it in the evening when prices are highest.
There may be a small number of very high-risk places where undergrounding makes sense, in spite of the high cost. Still, insulated wire provides a cheaper alternative, and distributed energy resources can reduce the need for dangerous high-voltage lines while providing ancillary benefits. Utilities must be incentivized to choose the lowest cost alternative without bias. Unfortunately, the utilities’ current cost plus compensation mechanism biases them in favor of larger, more expensive projects and against distributed resource solutions. Fortunately, they are regulated monopolies and the state sets the rules for their compensation.
As this Committee considers utility wildfire spending this year, we strongly encourage prioritizing revising how utilities are compensated in light of new technologies, a changing climate, need for better fire mitigation, and a more reliable and resilient electrical system. This will help solve California’s electricity affordability crisis while ensuring the most cost-effective risk mitigation happens to prevent fire.
Thank you.
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