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Journalist Markham Hislop interviews leading energy experts from around the world about the energy transition and climate change.
Welcome to episode 339 of the Energy Talks podcast. I'm energy journalist, Markham Hislop. Western Canada is on fire. We recently canceled a vacation in Alberta because of the huge wildfire, that closed highways and eventually burned a third of the mountain resort town of Jasper. The smoke that covers the prairie provinces drifts down into the United States, causing discomfort and health issues far from the border.
Markham:Climate change is playing a big role exacerbating these wildfires. What, if anything, can be done? Given the recent intense interest in artificial intelligence, can AI be harnessed to mitigate the problem? I'll be talking to Brian Spear, the CEO of Technosilva, whose company works with fire agencies and some of America's biggest utilities to better monitor and forecast weather and wildfire risk scenarios. Welcome to the interview, Brian.
Bryan:Thank you, Mark, and thank you for having me.
Markham:Well, I think this is really timely. I mean, not, you know, it's timely from an AI point of view, from a detect point of view. This is interesting, But really given our, energy, media's focus, the impact on utilities, the impact on forests, and the role of climate change is top of mind. It certainly is in Western Canada here where I live, and maybe that's where we should start. So just from your point of view, your company's point of view, and maybe more importantly, the point of view of your customers, your clients who are utilities and fire agencies, what role is climate change playing in the wildfire season?
Bryan:Yeah, Mark. And so it's a good question. I think, you've got different perspectives around the world on exactly the role that climate change is playing, but I think in general, what everyone would agree is that, you know, we are having, you know, drier and warmer conditions than normal. There's a trend towards that, and, and and and and we're seeing that. And if you look around and just see what's happening from a wildfire perspective, not necessarily are we seeing more frequency of fires, but we're seeing greater intensity of fires.
Bryan:And I think all of our customers would agree with that. On the agency side, we're helping them, react to those fires and fight those fires in the most efficient and safe way and save lives and save structures. And on the utility side, there what what what's changed there is the liability piece of that. So utilities are being pinned with a liability, uncapped liability, and that's really changed their approach. They've realized that they have to be more proactive and that essentially, you know, post Lahaina, every utility in in the US, I should say, realizes that they have some form of a wildfire problem now.
Bryan:It wasn't the case, you know, just a year ago.
Markham:Yeah. It's hard to imagine Lahaina. My wife and I have, vacationed there a couple of years ago, on Maui. And, to think of Lahaina as Bert just disappeared is very difficult. But Canadians had the same visceral reaction to the prospect of Jasper being fully burned down.
Markham:That was I know in in my circle, everyone was watching with bated breath a day or 2 as the wildfire advanced on the town. You know, it's such an iconic place. Marilyn Monroe did movies there in the fifties. Families I don't know how many. Most families have been, to Jasper for a vacation.
Markham:I've driven through there many, many times, traveling between the provinces. And and so it's a it's so important now and so top of mind, but what can we do about it? I mean, the one of the the issues that came up during the the Jasper wildfire is winds came up, there was no rain, and the fire shifted. It sped up faster than anybody anticipated. Is this where your company comes in and maybe helps so that the firefighters aren't caught off guard?
Bryan:Yeah. So, Mark Emmitt, first off, I think seeing these things, you know, when you're personally impacted by these, it really changes everything. You mentioned Maui. I was in Maui, 2 weeks ago, and I got to see this firsthand, and, I got to, you know, just met so many people that had been impacted that, had, you know, had had rushed out of their house and just in time, hopped in the back of a pickup truck, you know, and and barely escaped the fire. And when you see that, you talk to so many people who've lost everything.
Bryan:For me personally and what we do, it just made it real and it really just reiterated the importance of our mission and why we do what we do every day. And you're seeing, you know, you're seeing the same thing there in in your area around around Jasper. It's it's heartbreaking, But again, it's it's why we're here. So so what we do and how we're able to help solve this problem on the agency side, we provide the the the fire agencies and firefighters the tools that that model the fire. So it models like where the fire is going to spread.
Bryan:So we're taking, you know, we're looking at, at high resolution weather forecasts that we do in house. We're taking the vegetation types, the the, moisture of the fuels. And with all those things, we're able to model where the fires are going to go. Not only where they're going to go, but the rate of spread, the flame length, the intensity, all that so that the firefighters can can attack these in a safe way, keep the firefighters safe, and also we give them the ability to track all their resources so they have one common picture of of where all the resources are. The firefighters, the helicopters, the planes, the dozers, etcetera.
Bryan:If you don't have that and you the firefighters are out in the field, responding so dynamically and they don't know where their other resources are, it can be very dangerous. So, so that's what we do on the agency side, and it's something like we're across, we're doing that across 10 countries today. Recently, we went into Canada last year, after the, you know, the fires in in British Columbia. We went in and did a pilot, and then now we're expanding province wide there. Part of that came about because Cal Fire, we're the authoritative modeling tool for the state of California.
Bryan:So CAL FIRE uses our tools exclusively. They went and helped BC, during the during the catastrophic fires that they were having, and and that's kinda how that came about. On the utility side, what we do for them is we're helping them prevent ignition of fires off of their assets. Right? So fire agencies, it's responding.
Bryan:It's keeping people safe. On the utility side, it's preventing it from happening. So it's much different solution set, but in the end, it's the same goal.
Markham:Now let's talk about California. That's and we'll get back to British Columbia because that that's of interest to me personally. But let's talk about California for now. We we've there've been, you know, devastating wildfires, for a number of years now. And the role, there's a lot of talk about the role of, utilities infrastructure, a lot of, you know, sparking fires.
Markham:Right. And is my understanding of that is that the Santa Ana winds blow in. They they blow transmission lines down, then there's a spark sets off a fire. Is that is that the primary means of ignition in this case?
Bryan:That's right, Mark. And it's typically, associated with extreme weather events. So it's the it's the high winds. The winds could, you know, they could knock a pole over, they could knock a tree into a pole, they could, you know, they could throw a branch for, you know, for many, many yards and, you know, into a line and that creates a spark and then that's the the winds then, cause that to spread. So what, you know, what we do with utilities is we predict, we help them model a couple things.
Bryan:Number 1 is is the weather, advanced, you know, high resolution weather modeling, but we're also taking much more of that into account. We're looking at all of their assets. We look at historical weather. Historically, when you've had winds of 60 miles an hour on that particular circuit, have you had outages? Have you had failures or not?
Bryan:Right? The historical context is really important. And then we and then we look at not only the probability of of ignition, but also the consequences. So if one particular section of your line is to ignite a fire, what are the consequences going to be under a very under various scenarios? Because not all fires are created equal.
Bryan:Right? So what we're able to do is be very granular about that at the asset level to help utilities in advance. So we're modeling out 5 to 7 days in advance at the circuit level and 2 kilometer square bay square square blocks, basically. So we're helping utilities determine coming up 5 days, 7 days in advance where do we have high areas of risk and and specifically where is it going to be so that they can take action. For example, if they need to take, de they need to do deenergization or what what's referred to as power public safety power shut off, PSPS.
Bryan:We help them, do that in advance so they can prepare their crews. They can notify customers. And when they do it, it has to be very, very surgical and limit the impact on customers.
Markham:I'm very interested in the the data that you have access to that allows you to do this high resolution modeling because, you know, I'm old enough to remember back in the day with jokes. We used to joke all the time. Every joke about, you know, the weatherman. Never got it right. Right?
Markham:You know, it was
Bryan:Best job in the world. Right? No.
Markham:Exactly. You know, you're forecasting a bright sunny day while you're standing in the rain kind of thing. And, but now with radar and other tools, it's you know, I look at my weather app, and it will say light rain starting in 17 minutes will last for 23 minutes. And then, I mean, that level of, technical specificity Mhmm. Was is I was unknown even a decade ago.
Markham:So what kind of data do you have access to?
Bryan:So we have access to, several different inputs, but let me talk about the weather specifically. So, we acquired a company because we realized that core to what we do to our modeling capability is that weather because that's how you're forecasting in advance, and the weather is obviously one of the biggest inputs into the fire modeling. So we acquired a company that does this. They do fire weather modeling specifically for that. So they're doing they're taking a combination of what you can get publicly and also weather stations that we put out in the field, you know, together with our utility partners, and then we put machine learning on top of that, AI on top of that, and that's how we're able to get very accurate, very granular weather forecast around, you know, around winds and humidity and do it in very difficult topographies largely across the across the west.
Bryan:It's something that we've gotten really good at. Our utilities now have brought on, meteorologists. So you now have pretty large meteorology teams within a lot of these utilities, and, and they're using these tools for that weather modeling. But also, that's only one part of the part of the picture. So you also have, we have, you know, satellite data.
Bryan:We have lidar data. So you have, you know, vegetation types impact on the right of ways. You also have, we also put machine learning on top of that, so we can we need we need dynamic data. So a big input into fire modeling is the moisture of the fuels. Right?
Bryan:So you got live fuels and dead fuels, and you need to know the moisture of that on a pretty dynamic basis in order to properly model fires. If we're if we're, modeling too aggressively, that's that's just as bad as if we're modeling too conservatively.
Markham:Okay. When you say you need to to be able to model, you know, moisture in the I mean, we're talking about, you know, the the the brush on the side of the road, how dry it is? Or the
Bryan:That's right.
Markham:That's astonishing. How do you do that? What's the what's the mechanism for getting that that measurement?
Bryan:Yeah. So we've got, we have a partnership with with NASA. So we're getting satellite data from NASA on some of this. We've got we do a lot that we've just done in the field over the years where we're taking samples, and we've got enough of, field observations plus satellite lidar observations that we've built machine learning models that are very accurate around, around keeping those up to date on what the actual real time moisture level is in those fuels.
Markham:Wow. That's astonishing. I did not know that. I wouldn't have guessed it. Okay.
Markham:So, let's talk about British Columbia. What are you doing in BC?
Bryan:So we're giving the the agency, the forced agency in BC, all the tools that they're using on a daily basis to model those fires, to model the fires, where they're going to spread to, what the likelihood is of, you know, of of of risk on any given day, and then when there is a fire, how they're modeling it, where they're positioning their resources, how they're tracking their resources. Ultimately, it's the tools in their hands to fight the fire in the most efficient way to be able to communicate, keep the public safe, and also keep the, you know, keep the firefighters safe. Saving lives and saving structures is really the the goal, and those are the tools that we've got in their hands that they're using literally on a on a daily basis.
Markham:Now, in, British Columbia, there's really only one utility. That's BC Hydro. Fortis BC does have some infrastructure on the power grid, but it's, much, much smaller Right. Than BC Hydro. So you've got the Crown Corporation.
Markham:If I might, you don't have to share any, tray commercial secrets here, but I'm just curious about if you're, you know, if you're working with BC Hydro.
Bryan:Today, we're we're not, Markham, and I'll tell you the reason why. So, on the utility side, it is the US utilities, have a I don't wanna call it unique, but a pressing issue around liability. You know, it's uncapped liability. I don't I haven't seen this play out in other countries yet where utilities have been hit with, you know, with significant 1,000,000,000 of dollars of damages, you know, for igniting wildfires. If you look over the past several years, you know, most people are aware of this, but PG and E, they had 750 lawsuits between 20, you know, 2015 and 2018.
Bryan:They reached settlements of 25 and a half $1,000,000,000.
Markham:Oh, wow.
Bryan:Settlement of bankruptcy in 2019. I will mention today they're one of the leading, leading utilities in this area that they have a they have a rock star team. This is led by, you know, top priority of the CEO. Accel, you know, they the the Marshall fires in 2021, they've reported their potential liability for those. Could be could be a half a $1,000,000,000.
Bryan:The Smokehouse Creek fires, that's, you know, reported to be in the 1,000,000,000 specific corps. They've paid out 100 of 1,000,000 of dollars in in settlements. There could be more. Know, from the Labor Day fires. There could be more following that as well.
Bryan:And then with with Hawaii Electric, they've got over a 100 pending lawsuits, liabilities up to reported up to $5,000,000,000. So these things have happened, and then, this raised the awareness to you know, within the industry, it was thought of as this is a California issue. Right? And then Lahaina happened, and then it was realized that it you know, they lost 75% of their market cap overnight, and and and they weren't that area was not generally thought to be burnable, right, at least not to that extent. And and that changed everything.
Bryan:You know? Then Warren Buffett came out in his letter to shareholders and said that the, you know, the future investment viability of electric utilities that are exposed to wildfire risk, might not you know, might no longer be a safe investment. They could be facing bankruptcy, question the model of, can utilities even survive? 2 days after he came out with that, the Smokehouse Creek fires broke out. 2 days after.
Bryan:Right? By the second day, it was already being penned, being penned on Excel. So now every utility in the US realizes that they have a wildfire problem. That problem might be that they have real risk that they need to they need to be able to put measures in to prevent, or it might be that maybe they don't have high risk, but they need to be able to really understand that and articulate that to investors, to regulators, to insurance companies. Some utilities can't get their insurance renewed.
Bryan:They're taking a, you know, taking a hit on cost of capital due to their investment grades. So they need to be able to articulate their risk or the lack thereof the risk and then also be able to show what they're doing about it and how that impacts
Markham:I had not thought of that. Well, I mean, that that's not true. I mean, when you read stories about the wildfires down in the US and the role of utilities or the impact on utilities, and liability always comes up. And and the even the impact on residential electricity rates Yes. That are because those costs have to be paid by somebody, and, ultimately, it becomes the the ratepayer that that pays.
Markham:It's one of the reasons why California has, such high, power rates. But this, as a Canadian, where, our electricity system is our power grid's very, very different. Our electricity system is very different. Alberta is the only system that looks vaguely like an American power market. The rest are dominated by Crown Corporations, in every other province, except Ontario, which is a bit weird.
Markham:We won't get into we won't get into that, mess. But the the role of government in owning the utility, I won't say controlling the regulator, but, you know, they appoint who goes on the regulator. So they have a a greater influence on the regulator, and they are the policymaker.
Bryan:Mhmm. Mhmm.
Markham:And so that raises the question. I don't you don't need to talk about BC Hydro or anybody specific, but I just wonder if you have any observations about how that different structure, government's role in in that, might change the issue of wildfire liability.
Bryan:Well, it changes the issue in liability because, they have a they have a backstop. Right? Whereas the the public utilities, investor owned utilities in the in the US, they don't have that backstop now, and that's why they're taking such drastic actions. Now that doesn't doesn't mean that their risk is any different than what, you know, the the Canadian utilities would be. You know, they're they're probably at, in some cases, at similar levels of risk, but, the business risk is higher.
Bryan:Right? And and a lot of utilities now are pushing. There's a big push in the US at the federal level for some form of a backstop in place. And, you know, California put something similar in place with the AB 1054, several years ago. They're lobbying for something similar.
Bryan:I'm supportive of that. I think that, you know, with that, with having uncapped liabilities, on utilities, it's just it it's a it's a negative effect long term because their cost of capital goes up. That gets passed through to the to the ratepayers. It becomes, you know, rates that just don't make sense any longer, and then you can no longer invest. You can no longer invest into the grid to improve the resiliency.
Bryan:So I I am supportive of that, but I think most would agree that if they are if there is gonna be some form of a back stop, they have to be taking, you know, minimal steps, you know, required to ensure that they are preventing they do understand their risk, and they are preventing this from happening. And, the organization, EEI, has been and there's a project called the, the Hamilton project that's that's positioning for this, but also stating that if you're gonna do this, you need to understand every utility must be able to understand what their risk is. They must have a plan for addressing that, and they need to be able to, to implement power public safety power shutoff in the event of extreme events.
Markham:Now, we do a lot of energy transition journalism here at Energy Media, and one of the issues that we stories we regularly cover is the electrification of the global economy. The forecast that by 2050, advanced economies like Canada and the US will have to double or triple their power generation. And there's, you know, a great deal of talk right now about the need to and the difficulties around building, power grid infrastructure in the United States. And all of that, it seems to me, would be greatly complicated by the issue of wildfires. And so when you talk to, your utility customers, how does wildfire play into their plans to, you know, build more transmission lines, to, build more power plants or build solar farms or whatever it is.
Markham:How how does it play into that?
Bryan:Well, I would say at the macro level, Markham, wildfire risk is is one of the very few things that could that could bankrupt the utility in the short term and could cost the CEO their job. It's a very short list of things that could do that. And and so from their perspective is they've gotta get their arms around this for the sustainability of the company. Right? Also, it helps with the showing that they're they're they're addressing this risk, also helps with cost of capital.
Bryan:We've seen that very, very clearly. Investment ratings are being, are being directly affected based off of wildfire risk and the mitigation efforts that they have in place. So that that's where I would start, that that comes down to cost of capital and the risk of the company being able to support those types of investments. And so they have to show that that's in place. And then also when they're building these new networks, they need to understand what the risk is in those areas and what type of technologies they need to put.
Bryan:Now we're not the we provide the modeling, help them understand at the asset level where that risk is, but in many cases, they need to to do things like undergrounding. They need to do things like reconductoring. Right? But you need to be very smart about that because it's expensive. So what we do is we help them understand where where it makes sense to do that, be able to to clearly calculate an ROI on that investment and understand the risk that they're buying down at the asset level, so that they're not you know, that that they're being as efficient and responsible as they can in making those investment decisions.
Markham:See, your, your your comments about how the utilities perceive risk and the tremendous pressures that wildfire risk puts on the utility immediately makes me think of the Canadian situation where you have a Crown Corporation. So the Crown Corporation doesn't have investment grade risk because it backstopped by the government, and the government will have the best rates that are available so that, you know, that's a pressure that's off the management team. Mhmm. The federal government will come in with, with, funding in the event of a wildfire, and and support. That my I guess my point here is that because the government is so involved from owning the utility on up, that some of the risk factors that are pressuring the investor owned utilities in the US are not they're not experiencing the same pressures in Canada.
Markham:And that might actually be a a negative long term or in short to medium term because they might not act, as quickly or as aggressively as the US in utilities. I just your perspective on that. Are you No.
Bryan:You're you're you you nailed it, and and that's the situation. You know? It's not necessarily that there's a difference in wildfire risk. The responsible thing to do if you're at risk of starting wildfires off of your equipment is to address that. Right?
Bryan:But you the utilities that are actually held financially liable for that, that's what's causing them to move so quickly, whereas you don't have that with the Crown Corporation. So it might be the same same risk of starting fires and damaging, you know, structures and and costing lives, but they just don't have the same incentives to go to go do that. You know, I'll give you an example. I've talked to some utilities in the US as little as 8 months ago, who said we will we will never shut off power proactively. That goes against everything that we've been investing and and and focusing on for the last, you know, several decades.
Bryan:We will never do that. And then, you know, after Lahaina, after Smokehouse Creek, they've changed, like and now it's a top priority for them. And it it's all because of the financial liability that, that they're know, you know, to save save lives and and save land and structures.
Markham:Brian, this is a fascinating conversation, and I'd like to wrap it up with the history of your company. I, I was interested to discover that it's been around for almost 30 years. Started up in 1997. Can you get, can you walk us through a little bit of the the history and more importantly, where you are now? Well, actually you've done that where you are now in terms of your modeling ability and your and the the, the some of the data you get.
Markham:But where are we going in the future? What does the future hold, particularly as AI becomes, more sophisticated and more, universal, I guess?
Bryan:Yeah. This is, something I love to talk about. So, like you said, company's been around since 1997. Our founder, Joaquin Ramirez, and his wife, Azutina, started the company. We provide the, you know, wildfire prevention and risk mitigation platform.
Bryan:It was initially started, you know, to focus on the agencies, as I mentioned. That spread over the over the years across 10 countries or in 10 states in the US, and then and it's been a very effective tool for the agencies. But, you know, after the the witch fires in San Diego in 2007 and then, more utilities in California started to be be found liable for igniting fires and and responsible for 1,000,000,000 of dollars of damages. He realized and he partnered up with another gentleman here in the US, and they said, hey. We can we can take this tool that's been more reactive, and we can make it proactive.
Bryan:We can help prevent these fires with utilities. And so we partnered with San Diego Gas and Electric in 2015 on developing, I guess, or modifying the tools around the use cases of the utilities. So they're the pioneer. They still are a pioneer in this. They've got an amazing, emergency operating center that they've just built there in San Diego, showcased I mean, it's best in class, you know, around the world, no doubt.
Bryan:But then after that, we, we we we we expanded into Southern Cal Edison and then PG and E, so across all of California even with the with the Public Utility Commission. And then but at that time, it was still kinda seen as a California problem, but we had these very sophisticated tools that were were showing and still today, incredible results in helping utilities prevent these these, asset caused ignitions. But then in 2020, 2021, there were the Labor Day fires, the Marshall Fires, and then it became, pretty clear this is more than a California problem. So we started quickly moving outside of California. Now we're in utilities across 15 states.
Bryan:Up until 6 months ago, that was mostly in the west. Now we're quickly moving east, into the upper Midwest and Minnesota, Wisconsin. We're also starting some work in the southeast, with utilities as well. So, really, the transition that that we've made in a very short period of time is that, we've moved from large utilities with large teams and very deep expertise on meteorology and and wildfire, prevention all the way across the spectrum to, you know, medium sized investor owned utilities that have a few resources that are starting to understand how to how to attack this all the way into co ops now. And so what that's meant for us is that we've had to we have to continue to provide the same level of sophistication behind the tools, but we've had to simplify the outputs.
Bryan:We've had to go from being able to present the data to these very, complex organizations where they know how to how to put that into action to turning that into recommendations that are easier to consume. And that's really where we see the next use of AI that, you know, what we foresee, what we're looking to use AI for now is to put it on top of all that and give these users the ability to ask very complex questions and get very simple answers back. And, and that has the ability to be to be game changing because, again, this is something that every utility across the US and maybe beyond, they're gonna have to do some form of this. Now it's gonna look different everywhere. Not not everything that California has done is applicable when you go further east.
Bryan:It's overkill. Right? But there there are some basic fundamentals that every utility needs to be doing, and we're looking at at AI to help simplify that and make it more effective for those those smaller teams.
Markham:Before I let you go, Brian, I I do have to ask. Given the interest, in British Columbia and the fact that you're now working with the fire agency there, right next door on the other side of the mountains, the Rocky Mountains, is is Alberta, which is, you know, we talked about Jasper at the beginning of this interview. Is there any interest in in Alberta either from the fire agency side, which I assume would be run by the province. But then there are 4 or 5 big utilities. And, just wondering if there's any interest there.
Bryan:You know, we were having discussions with some of the other, provinces and the a and the agencies within those provinces, not not with the utilities to date. Hopefully, we'll get there, but, it's probably been it just hasn't been a a priority for them. And, honestly, we've been we've been really, really laser focused on some of the areas where, the problem is just so so so desperate. Right?
Markham:Right. Well, I I know that a lot of Western Canadians are would think that, their situation is is certainly Yeah.
Bryan:No. You're absolutely right. You're absolutely right. A lot of places around the world feel the same. And, hey, we hope that we can expand across Canada.
Bryan:We can help bring, you know, the same solutions that we're doing in BC, the same solutions that we're doing with utilities in the US. We hope we can do that across Canada. I also should mention, Mark, and I should have mentioned it earlier, but we also, just months ago, we we acquired another, fire modeling company in Canada, and and they build, they they have specific fuel or fire and fuel models for Canada, which we didn't have, and it's been a great complement into our overall solution and has helped us with with BC, for example, and will help us as we continue to expand across across Canada.
Markham:This Brian, this is fascinating. I mean, the, we've been talking for a long time about how when climate change really begins to bite, they're we're going to we're you know, we're clear it can't be stopped, and, we're gonna have to adapt. And, clearly, this is one of the adaptations, that were will be high on the priority list. We'll be managing, wildfires. So, good luck, and thank you very much for this.
Markham:Really appreciate it.
Bryan:Markham, I really appreciate the opportunity. Thank you.