  The interaction between power systems and wildfires can be dangerous and
costly. Damaged structures, load shedding, and high operational costs are
potential consequences when the grid is unprepared. In fact, the operation of
distribution grids can be liable for the outbreak of wildfires when extreme
weather conditions arise. Within this context, investment planning should
consider the impact of operational actions on the uncertainty related to
wildfires that can directly affect line failure likelihood. Neglecting this can
compromise the cost-benefit evaluation in planning system investments for
wildfire risk. In this paper, we propose a decision-dependent uncertainty (DDU)
aware methodology that provides the optimal portfolio of investments for
distribution systems while considering that high power-flow levels through line
segments in high-threat areas can ignite wildfires and, therefore, increase the
probability of line failures. The methodology identifies the best combination
of system upgrades (installation of new lines, hardening existing lines, and
placement of switching devices) to provide the necessary leeway to operate the
distribution system under wildfire-prone conditions. Our case study
demonstrates that by modeling the DDU relationship between power flow
prescriptions and line failures, investment decisions are more accurate and
better prepare the grid infrastructure to deal with wildfire risk.
