Case Study: Southern California Edison reduces wildfire risk with Moody’s Analytics wildfire modeling

Quantifying the Impact of Mitigation Measures in the Power Sector

Southern California Edison (SCE), a major electricity utility, faced the challenge of quantifying the effectiveness of its wildfire mitigation investments and public safety power shutoff (PSPS) program. They needed to demonstrate a measurable reduction in risk to regulators, customers, and shareholders. To address this, SCE partnered with Moody's Analytics and utilized its Moody's RMS North America Wildfire HD Model and Climate Change Model through the Risk Modeler application to establish a data-driven baseline of their wildfire risk.

Moody's Analytics implemented a solution that integrated SCE's detailed infrastructure and mitigation data into their stochastic models. This allowed them to run simulations comparing risk before and after mitigations were applied. The results were significant, showing Moody's Analytics helped SCE estimate a 75-80% reduction in the probability of catastrophic financial losses. Specific outcomes included a 71% reduction in faults on covered circuits and a more than 90% reduction in structures damaged, validating the value of SCE's risk mitigation strategy.

Southern California Edison

Robert LeMoine

Director, Enterprise Risk Management, Insurance and Data Analytics