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In the past decade, summer wildfires have become the norm in California, andthe United States of America. These wildfires are caused due to variety ofreasons. The state collects wildfire funds to help the impacted customers.However, the funds are eligible only under certain conditions and are collecteduniformly throughout California. Therefore, the overall idea of this project isto look for quantitative results on how electrical corporations cause wildfiresand how they can help to collect the wildfire funds or charge fairly to thecustomers to maximize the social impact. The research project aims to proposethe implication of wildfire risk associated with vegetation, and due to powerlines and incorporate that in dollars. Therefore, the project helps to solvethe problem of collecting wildfire funds associated with each location andincorporate energy prices to charge their customers according to their wildfirerisk related to the location to maximize the social surplus for the society.The thesis findings will help to calculate the risk premium involving wildfirerisk associated with the location and incorporate the risk into pricing. Theresearch of this submitted proposal provides the potential contribution towardsdetecting the utilities associated wildfire risk in the power lines, which canprevent wildfires by controlling the line flows of the system. Ultimately, thegoal of this proposal is a social benefit to save money for the electricalcorporations and their customers in California, who pay flat charges forWildfire Fund each month $0.00580/kWh (in dollars). Therefore, this proposalwill propose new method to collect wildfire fund with maximum customer surplusfor future generations.

Wildfire Modeling: Designing a Market to Restore Assets