Executive Summary
Wildfire risk is reshaping the economics of grid reliability across the United States.
Public Safety Power Shutoffs (PSPS) by utilities, once reserved for the most extreme conditions, are now a recurring reality, a result of worsening drought conditions, extreme heat and longer fire seasons.
The threat has outpaced the response.
The price of repeated shutoffs is high for customers, businesses, and local economies.
A single PG&E PSPS event in California, for example, was estimated to have caused roughly $2 billion in economic losses. Even a one-hour outage can cost large commercial and industrial customers tens of thousands of dollars. Its rising frequency and scale have turned PSPS from a contingency measure into a recurring liability with no natural ceiling.
This paper examines why utilities are rethinking the long-term viability of PSPS and making a stronger commitment to undergrounding high-risk distribution lines. What once seemed financially out of reach is becoming more achievable — driven by standardized construction, strategic sourcing and industrialized delivery models that are reducing per-mile deployment costs.
The paper also looks at the operational, regulatory and financial realities of scaling undergrounding programs. Utilities must balance wildfire risk reduction with affordability, execution speed and regulatory scrutiny as undergrounding takes on a larger role in future rate cases and grid-hardening strategies.
For utility, procurement and business leaders, the question is no longer whether these investments are necessary but how to deliver them efficiently and at the pace the risk demands.
FAQs
Wildfire risk across the U.S. has led to repeated Public Safety Power Shutoffs (PSPS), which are disruptive and costly for customers, businesses and regional economies. Utilities are evaluating whether long-term infrastructure investments such as undergrounding high-risk distribution lines offer a more sustainable path to grid resilience.
Permitting complexity, contractor availability, routing constraints and a tight global supply market all create execution pressure. At the same time, utilities must satisfy regulators on affordability and cost discipline, making operational rigor as important as engineering capability.
Strategic sourcing, standardized civil designs and industrialized delivery models are steadily reducing per-mile distribution undergrounding costs. But those efficiency gains depend on sustained program funding: without sufficient annual volume, the economies of scale that make these programs viable erode.
Given the persistent tightness in the high-voltage cable market, procurement teams at leading utilities are establishing multiyear supplier agreements and procuring long-lead components — such as cable, splice, and vault — well in advance to secure supply and reduce cost exposure.
Procurement is central to resilience strategies. Multiyear supplier contracts, earlier sourcing decisions and stronger cross-functional coordination are becoming decisive factors in whether utilities can deliver undergrounding programs on time, on budget and at scale.