Wildfires caused $90 billion of damages in the United States in 2021 alone. This is up from $24 billion in 2018. Looking into the future, the number of wildfires (and thus the associated damages) are expected to continue to rise due to climate change and inadequate forest management.
Traditional approaches to forest health management have historically focused on fire suppression and logging of the largest, most commercially valuable trees. This type of management severely reduces beneficial natural fire while simultaneously removing the most fire-resistant trees, which allows for increased development of housing in and near forests.
New strategies are urgently needed to combat the increasing size and severity of catastrophic wildfires.
In the state of California, where watersheds often feature over-stocked forests, hydropower owners are working toward preventing catastrophic wildfires before they start by utilizing innovative financial tools, partnerships, and pilot projects aimed at reducing potential wildfire hazards.
This work is critical because wildfires can result in massive erosion, which degrades streams and rivers, and the fires themselves have the potential to damage homes, ecosystems, water, transportation, and power infrastructure, leading to enormous ongoing costs for ratepayers and the public.
With drought and extreme weather incidents increasing across the United States, hydropower owners can learn from the strategies employed in California to better prepare projects and operations against the dangers of wildfire.
THE PROBLEM: A DISAPPEARING ‘WILDFIRE SEASON’
After 2021’s devastating Caldor and Dixie fires, the California Department of Forestry and Fire Protection states that, due to climate change, there is no longer a “wildfire season.” California’s wildfire season, which typically ran in the hotter months, has increasingly expanded to encompass a larger part of the year with no indication of abatement.
Stoking the strain is a significant plunge in the number of U.S. Forest Service firefighters working to suppress wildfires. According to Wildfire Today, U.S. Forest Service firefighters in California dropped from 5,000 in 2019 to 3,956 in 2021, which is more than a 20% decline.
Worldwide, a major new U.N.-backed report warns that the need to reduce wildfire risk is more important than ever. The United Nations Environment Programme (UNEP) report states that worsening wildfires – devastating to people, biodiversity, and ecosystems – are expected to rise to 14% by 2030 and 50% by 2100 due to climate change and land-use change.
The World Resources Institute (WRI) states that U.S. wildfires in 2018 caused an estimated $24 billion in economic losses, a record high, which claimed human lives, damaged property, released greenhouse gases, contaminated water supplies, and harmed the forest products and tourism industries.
PROACTIVE SOLUTION: YUBA’S PIONEERING WATERSHED RESILIENCE PROGRAM
Instead of waiting for a catastrophic wildfire to occur, the Yuba Water Agency, based in Marysville, California, is proactively investing in forest health management in the Yuba River watershed to prevent fires before they start. The Yuba River watershed feeds the agency’s tributaries and reservoirs and has extensive areas of overly dense forests that are more susceptible to high-severity wildfire, insects, disease and drought.
The Agency maintains the following hydroelectric developments—New Colgate, a mini-hydro at New Bullards Bar, Narrows 1, and Narrows 2, which are located on the Yuba River. The Yuba Water Agency owns and operates facilities with the capacity of storing approximately one million acre-feet of water, and its hydro assets generate 417 MW of renewable energy annually. Each year, the agency releases approximately 260,000 acre-feet of water to eight irrigation districts, which convey the water to local farmers and ranchers.
Yuba Water Agency is one of six organizations serving as hosts of the upcoming Clean Currents Conference + Tradeshow the week of October 17, 2022, in Sacramento, California.
As a result of increased wildfire risk, Yuba Water Agency launched its pioneering Watershed Resilience Program in 2018. The program combines large-scale solutions to the implementation of watershed restoration with local capacity building and project development for the creation of resilient forests, watersheds, and communities. The Watershed Resilience Program includes projects that span the entire 275,000 acres of the North Yuba River Watershed, as well as the foothills of Yuba County.
In 2019, federal, state, tribal, and non-governmental partners, including Yuba Water Agency, signed a memorandum of understanding and established the North Yuba Forest Partnership to work on forest health implementation across the entire 275,000 acres of it upper watershed. The scale of the North Yuba Forest Partnership, project planning, impact tracking, and implementation pace are unprecedented and create a template for others to emulate.
While the partnership has been beneficial, the challenges faced have been numerous, and they consist of:
- A vast upper watershed containing an overly stocked forest in need of extensive forest health treatments.
- A checkerboard of land ownership and jurisdictions requiring collaboration across numerous stakeholders, national forests, counties, and other public and private entities to plan, permit, and implement the needed projects.
- Increasing heat and drought — elevating the risk of catastrophic fire which narrows implementation for many types of forest health treatments.
- Slow federal and state funding programs which are inadequate to address the risks at the pace and scale needed.
THE DEEP DIVE: FOREST RESILIENCE BONDS FIGHT FIRES FASTER WITH UPFRONT FUNDING
In 2018, Yuba Water Agency partnered with Blue Forest Conservation, a Sacramento-based non-profit that creates sustainable financial solutions to meet pressing environmental challenges, on an innovative Forest Resilience Bond (FRB) for forest health management of the Yuba Watershed.
As this video explains, Forest Resilience Bonds provide upfront private capital to reduce the risk of severe wildfires and associated environmental and human costs. The bonds creatively address the large gap in forest health management funding and problems to achieve the necessary pace and scale of traditional grant-based financing. This innovative financing strategy provides upfront implementation funding and eliminates long payment delays with grants that often exclude local contractors from participating due to cash flow needs. Forest Resilience Bonds allowed Blue Forest Conservation and its partners to attract additional capital from public and private investors to initiate restoration at a much faster pace and scale.
Yuba Water Agency supported the first piloted Forest Resilience Bonds with a $1.5 million cost-share contribution to help fund the Yuba Project, which utilized Forest Resilience Bonds to finance ecological restoration treatments across 15,000 acres of national forest. The investment helped leverage an additional $4 million in capital to advance forest management work. Yuba Water’s contributions pay for interest accrued from the private investors, securing the private financing, and allowing the project partners to leverage this funding for additional state and federal grants that do not allow for interest payments on loans to be included in grant budgets.
According to the Tahoe National Forest partners working with Yuba Water Agency, the Yuba Project would have taken ten-plus years to complete via the normal United States Forest Service funding processes. Using the Forest Resilience Bond structure, the project was completed in four years.
Building on the success of the Yuba Project, Yuba Water Agency committed to a second $6 million Forest Resilience Bond, named Yuba II, in early 2021; the project, which leverages $25 million in total funding, will be used to complete priority work on 16,800 acres in the North Yuba Forest Partnership area. Yuba Water Agency will also use the private capital and commitment afforded by state and federal grants. The second Forest Resilience Bonds will include a treatment area three times larger than the initial Yuba Project and will utilize an investment of $6 million from Yuba Water Agency to fund and implement an $18 million forest health and fuel reduction project.
“There is no doubt in our minds that the Forest Resilience Bond is significantly increasing the pace and scale of the work that so desperately needs to happen in our watershed. What we’ve accomplished in just the past three years probably would have taken another 15, if not more, without this much-needed jump-start. But even more importantly, what this has done is bring to the table all of the key players in our watershed and sparked partnerships that are really helping to solve critical challenges with our forest health,” said Willie Whittlesey, Yuba Water Agency’s General Manager.
In October 2021, the World Resources Institute (WRI) announced a partnership on Yuba II Forest Resilience Bonds. The new Forest Resilience Bonds on the Tahoe National Forest will finance $25 million in forest resilience and post-fire restoration projects in California’s Sierra Nevada mountains to restore 48,000 forested acres, protect nearby communities, and enhance water security. In 2018, the World Resources Institute partnered with Blue Forest Conservation and Encourage Capital to help secure $4.6 million to restore 15,000 acres in California’s Tahoe National Forest through the Forest Resilience Bonds.
The Yuba Water Agency’s $7.5 million investment in the first two Forest Resilience Bonds in California demonstrates keen fiscal responsibility, as the cost of a catastrophic wildfire within the watershed would result in higher clean-up costs, hydropower revenue loss, and devastation to natural resources and communities.
The Yuba Project Forest Resilience Bond began implementation in 2018 and has completed:
- 35 mile of trail improved
- 1,110.35 acres of fuel reduction planned
- 1,325.45 acres of fuel reduction completed
- 1,858 acres of prescribed fire prepped
- 25 miles of prescribed fire lines
- 45 acres of biomass utilization
- 42,581.24 tons of biomass utilization
Additionally, Yuba Water’s investments in this and other forest health projects (totaling $8.6 million to date) within its Watershed Resilience Program have leveraged over $35 million in external state and federal grants.
TREATING TAHOE: FRENCH MEADOWS FOREST RESTORATION PARTNERSHIP
Despite an extremely dangerous fire season in 2021, partners of the French Meadows Forest Restoration Project—a collaborative forest health project designed to reduce wildfire risk—completed its third consecutive season of treatments earlier this year in the Tahoe National Forest, which is also located in California. The partnership was a response to the 2014 King Fire, which burned more than 97,000 acres in the American River watershed.
Despite an extremely dangerous 2021 fire season, articles reported that the multi-agency partnership safely treated approximately 1,000 acres with a combination of mechanical thinning, hand thinning, and prescribed fires. Part of the affected acreage is on private land owned by the American River Conservancy, which has independently raised funds to treat 1,345 acres over several years. The combined all-lands collaborative watershed management project has treated more than 5,200 acres over three seasons.
PENDING FEDERAL LEGISLATION AND FUNDING
Federal forest management, wildfire legislation, and funding introduced in Congress in 2021 proposed significant expansion of the current forest enhancement programs. The Association of California Water Agencies is successfully working to secure federal funding.
“The Association of California Water Agencies is taking the lead in working with leaders within the Biden Administration, as well as Congress, to obtain funding for significant expansion of the current forest enhancement programs,” said energy policy consultant Eldon Cotton.
In a press release from The Association of California Water Agencies, the bipartisan infrastructure package that is now the Infrastructure Investment and Jobs Act of 2021 provides $8.3 billion for Western water infrastructure, $3.3 billion for wildfire mitigation, $2.1 billion for ecosystem restoration, and $55 billion for drinking water.
According to the June 22, 2022, Congressional Research Service report on Funding for Wildfire Management, the Biden Administration requested a total of $6.525 billion in FY 2023 discretionary appropriations for wildfire purposes for the U.S. Department of Agriculture’s Forest Service and the U.S. Department of the Interior, an increase of $757.1 million (13%) relative to the FY 2022 regular enacted appropriation. The request included $3.878 billion in the agencies’ Wildland Fire Management accounts, $2.550 billion pursuant to the wildfire adjustment, and $96.4 million to other FS accounts for wildfire purposes.
For the Forest Service, the Administration requested $4.985 billion in FY 2023 discretionary appropriations for wildfire purposes. This included $2.679 billion to the Forest Service’s Wildfire Management account, $2.210 billion pursuant to the wildfire adjustment, and $96.4 million to other Forest Services accounts.
For the Department of the Interior, the Administration requested $1.540 billion in FY 2023 discretionary appropriations for wildfire purposes. This included $1.200 billion to the Department of the Interior’s Wildfire Management account and $340.0 million pursuant to the wildfire adjustment.
WHY IT MATTERS
With droughts ravaging the western half of the United States, the devastating potential posed by wildfires is becoming an unfortunate reality. Yet, the example set by the North Yuba Forest Partnership, as well as other organizations across California, highlight the actions which can be undertaken to address threats before they become disasters.
Recognizing the work of the North Yuba Forest Partnership, for which Yuba Water Agency’s Watershed Resilience Program received an Outstanding Stewards of America’s Waters award, as well as a combined $34.8 million – $31.8 million as part of the Wildfire Crisis Strategy implementation and $3 million from the Collaborative Forest Landscape Restoration Program – in new federal awards toward its efforts, recognizing that “treatments will promote forest conditions that are more resilient, while restoring watershed health and native biodiversity.” Tom Vilsack, the Agriculture Secretary, applauded the efforts, “Programs like this show just how much we can accomplish across a shared landscape, when we work together.”
By developing relationships with other stakeholders, devising plans and strategies to address external dangers, identifying new funding opportunities, and promoting shared work, hydropower operators can protect investments and communities for generations to come.