The increasing wildfire activity in the past few years has been devastating, setting negative records in many states and regions around the world, especially in North America. Power systems have been impacted by wildfires in many ways, even in regions located hundreds of kilometers away from high-risk zones, depending on wind speed and direction conditions, the stemming smoke of wildfires may significantly impact the air quality and reduce the solar PV generation, and forcing several utilities to rely on PSPS programs to mitigate wildfire risks. Thus, power system operators must ensure reliability and resilience across power generation, transmission, and distribution while minimizing carbon emissions that can harm even more the air quality of the affected communities during wildfire events. Furthermore, a cost-effective power system expansion planning solution in regions with increased wildfire risk is achieved by placing ESSs and new transmission/distribution lines while taking into account their availability given the increasing number of PSPS events. This research aims to analyze the impact of wildfire activity on the electrical system's planning and operation, by analyzing the impact of the 2020 wildfire season on renewable energy in Washington state, focusing on variables that directly impact the wind and photovoltaic power. After that, efforts are made to approach the expansion planning of power transmission and distribution systems under wildfire risk, considering sitting and sizing of ESS as an alternative, with a compliance check on unbalanced power flow and system operating limits. The resulting models are a MILP optimization problem, and simulation experiments are performed to validate the effectiveness of the proposed formulation using different High Fire-Threat District Tier Zones based on real-world data from electric utilities in California.