Insurance companies sue energy corporation after it was blamed for helping start Colorado wildfire

Dozens of insurance companies are suing Minneapolis-based Xcel Energy to recoup money paid out to homes and businesses lost in Colorado's most destructive wildfire in 2021.

The lawsuit was filed Thursday, a few weeks after investigators announced that a sparking power line owned by Xcel was one of the causes of a fire that, fanned by high winds, destroyed nearly 1,000 homes and left two people dead. Embers from a smoldering scrap wood fire set days on a nearby property used by a Christian religious communal group was also found to have been another cause.

The two fires combined to cause a blaze fanned by high winds that is blamed for causing $2 billion in damage in a suburban area between Denver and Boulder.

Xcel did not immediately respond to a phone call or an email seeking comment.

More than 150 insurance companies allege in the lawsuit that Xcel, which operates in eight states in the Midwest and West, failed to properly design, construct, inspect, maintain, repair or operate its electrical equipment before the Marshall Fire broke out on Dec. 30, 2021. The lawsuit, which seeks unspecified damages, said Xcel failed to de-energize its electrical equipment before the onset of strong winds.

The smoldering fire at the Twelve Tribes property that was also blamed for sparking one of the fires that became the Marshall Fire had been buried by residents a few days before in a way that was approved by firefighters who stopped by to investigate, Boulder County Sheriff Curtis Johnson said at a news conference last month.

The lawsuit points out that the official report found that the group's plan to manage their fire was “responsible” and that the fire, when stirred up by winds on Dec. 30, did not quickly spread because of factors including the property's topography and lack of ground fuels.

In contrast, the lawsuit accused Xcel of failing to do business in a reasonable way. It also says the fire sparked by its power line spread quickly because it was on top of a flat mesa, allowing the fire to spread along the ground, and ignited nearby vegetation. The lawsuit claims “firebrands” — flaming or glowing fuel particles carried by the wind — from the power line-ignited fire sparked spot fires that eventually spread and burned homes in the communities of Louisville and Superior.

A lawsuit by businesses and residents was filed last year against Xcel Energy last year, and two other residents fled a lawsuit against Xcel on Monday. Many more lawsuits by homeowners are expected.