Article
Why Ignition Probability Matters for Asset Risk Prioritization
Electric utilities across the United States are increasingly relying on wildfire spread prediction models to assess the risk associated with their assets. These simulations provide valuable consequence measures: acres burned, structures destroyed, population impacted. But there is an important limitation to keep in mind. Consequence measures are conditional on an ignition already having occurred. On their own, they do not represent the full expected risk of an asset.
To prioritize grid-hardening and mitigation efforts effectively, utilities need to understand not just what could happen if a wildfire starts, but how likely it is that one of their assets starts it.
Why Ignition Probability Varies Across Assets
When utilities focus solely on wildfire consequence, they are implicitly assuming that the probability of ignition is the same across all assets. In practice, it is not. The likelihood that a specific asset fails and causes an ignition depends on a range of factors: equipment age and deterioration, conductor type, span length, number of phases, and environmental conditions such as fuel type, vegetation density, slope, and local terrain. Two assets in the same fire-weather zone can carry very different ignition probabilities depending on their condition and surroundings.
Combining Probability and Consequence
A more complete picture of asset risk comes from combining both factors. Grechanuk outlined this framework in a Utility Dive article: expected risk is calculated by multiplying the probability of ignition by the consequence if that ignition occurs.
Consider two hypothetical circuits during a high-wind event:
Circuit A is heavily hardened, with a 2% probability of ignition and a potential consequence of 100 homes destroyed. Its expected risk: 2 homes (0.02 x 100).
Circuit B is moderately hardened, with a 10% probability of ignition and a potential consequence of 40 homes destroyed. Its expected risk: 4 homes (0.10 x 40).
Ranked by consequence alone, Circuit A appears to be the higher priority by a wide margin. Ranked by expected risk, Circuit B carries twice the exposure. A hardening plan that focuses only on consequence would likely direct resources toward Circuit A, even though Circuit B presents the greater overall risk.
This does not mean consequence should be ignored. Public safety is the central concern, and the potential scale of a fire’s impact matters. But probability without consequence, or consequence without probability, each tell only part of the story. The integration of both is what produces a reliable basis for prioritization.
Implications for Hardening Budgets
Understanding expected risk is important not just for day-to-day operations, but for short- and long-term grid-hardening decisions as well. When prioritization is based primarily on consequence, resources can flow toward assets that have already received significant hardening investment and now carry relatively low ignition probability. The law of diminishing returns applies: each additional dollar invested in an already-hardened asset yields progressively less risk reduction.
Asset hardening decisions are often structured through a risk spend efficiency (RSE) analysis, which weighs the expected reduction in risk against the cost of the mitigation. When RSE is calculated using conditional risk rather than expected risk, it tends to favor areas with the most extreme fire behavior potential regardless of how likely ignition actually is. Accounting for ignition probability helps ensure that hardening investments are directed where they will produce the most meaningful reduction in overall system risk.
Hardening budgets are finite. Whether the funding comes from utilities, ratepayers, or government programs, getting the prioritization right has real consequences for communities, for the environment, and for the utilities responsible for managing that risk.
This article is adapted from a piece originally published in Utility Dive.
