Who's Liable When the Utility Shuts Off Your Power? Hint: Not Them

When a Public Safety Power Shutoff hits your neighborhood, it's easy to assume the utility bears at least some responsibility for the disruption. Spoiled groceries, a canceled work shift, a medical device that lost power at the worst possible moment — surely someone has to answer for that. In most cases, the answer is no one but you. California utilities operate under a legal framework that largely shields them from liability for damages caused by proactive power shutoffs, as long as the shutoff was conducted in accordance with CPUC guidelines and utility wildfire mitigation plans. The logic is straightforward from a policy standpoint: utilities are being encouraged, even required, to cut power preemptively to prevent wildfires, so punishing them for doing exactly that would undermine the safety goal. But that same logic leaves homeowners holding the bag for every cost the outage creates.

The Liability Shield, Explained

Utility tariffs filed with the CPUC typically include explicit language limiting the utility's liability for PSPS-related damages. Courts have generally upheld these protections, treating planned shutoffs differently from unplanned outages caused by utility negligence, such as poorly maintained equipment that sparks a wildfire. The distinction matters enormously: if a downed line starts a fire, the utility can face billions in liability. If the utility proactively cuts power to prevent that same fire, it is largely protected from claims tied to the shutoff itself.

What This Means for Your Wallet

For homeowners, this liability shield translates directly into out-of-pocket costs with no path to reimbursement. Spoiled refrigerated food, a business day lost to remote work becoming impossible, a sump pump failure that floods a basement, medical equipment running on failing backup batteries — these are financial and safety risks that fall entirely on the household, no matter how disruptive or how many times a season it happens.

Insurance Rarely Fills the Gap

Most standard homeowners insurance policies exclude food spoilage and general inconvenience from power outages unless a specific rider is added, and even then, coverage is often capped at a few hundred dollars — a fraction of the real cost of a multi-day PSPS event, let alone the risk to anyone dependent on powered medical equipment.

Since the utility isn't going to make you whole, and the shutoffs themselves are only becoming more frequent as wildfire risk grows, the most effective protection is switching to net-billing rate plans, where qualified homes get whole home battery backup systems paid for by TPO providers. A home battery paired with solar keeps essential circuits running through a shutoff regardless of what a court has ruled about utility liability. My Home & Solar Solutions helps California homeowners design battery backup systems that keep the lights, refrigerator, and medical equipment running when the utility decides to cut the power. Visit myhomesolution.org to find out what backup protection would look like for your home.