Xcel Energy settling Marshall fire lawsuit for $640 million while admitting no fault

Xcel Energy and other defendants said Wednesday they are settling a massive lawsuit from victims of the 2021 Marshall fire just ahead of a major trial, with Xcel saying it will pay $640 million without admitting any fault. Xcel included Qwest Corp. and Teleport Communications America in announcing the settlement with plaintiffs, insurance companies and public entities hurt by the fire.

Hundreds of plaintiffs who lost their homes in the 2021 fire, as well as nearly 200 insurance companies, were set Thursday to try to prove in District Court in Boulder that a faulty Xcel Energy power line was a source of the blaze.

The Marshall fire was Colorado's most devastating wildfire, as the Dec. 30, 2021, blaze burned 6,000 acres, destroyed more than 1,000 homes and commercial buildings and left two people dead.

Lawyers for some of the individual plaintiffs sounded pleased with the agreement.

"After years of Xcel denying any responsibility for the Marshall fire, we're very happy to agree to this negotiated outcome that provides real relief for fire survivors and holds Xcel accountable," said Matthew Preusch, an attorney with Keller Rohrback who represented both firm clients and was a court-appointed attorney for other plaintiffs.

Attorneys said they believed much of the settlement would be going to home and property owners, not just to pay back insurance companies for their claims.

An investigation by the Boulder County Sheriff's Office, completed in 2023, using burn patterns, video footage and satellite imagery, concluded there were two sources for the fire, which was driven across the county by fierce winds.

An old trash fire, covered with dirt, at the compound of Twelve Tribes, a Christian sect, was reignited by high winds, and less than a quarter of a mile away an arcing Xcel Energy powerline set a second fire.

Investigators also looked at the century-old Lewis coal seam fire, which has been burning below the Marshall Mesa, but found no evidence that it could create surface temperatures high enough to cause a fire, adding "although that cannot be completely ruled out."

"Despite our conviction that (Xcel or Public Service Co.) equipment did not cause the Marshall Fire or plaintiffs' damages, we have always been open to a resolution that properly accounts for the strong defenses we have to these claims," Bob Frenzel, chairman, president and CEO of Xcel Energy, said in a statement. "In resolving all liability from the claims, this settlement reinforces our longstanding commitment to supporting the communities we serve. We recognize that the fire and its aftermath have been difficult and painful for many, and we hope that our and the telecom defendants' contributions in today's settlement can bring some closure for the community."

Xcel said in its statement that $350 million of the announced settlement would come from the power company's remaining insurance coverage, and "none from its customers."

The fire sparked more than 300 lawsuits on behalf of about 4,000 plaintiffs. The cases were consolidated into the court case beginning Thursday. Losses from the fire are estimated at more than $2 billion. Xcel Energy said it has $400 million in insurance to cover losses.

This first trial was to determine liability. If Xcel Energy was found responsible, a second trial would havel set damages.

Xcel Energy maintained that its line did not set a fire, that a major portion of the damage was caused by the first ignition and that the Lewis coal seam fire may still be a source.

"We continue to maintain that our equipment didn't start the second ignition in the wildfire and we're prepared to go to court," Xcel Energy CEO Bob Frenzel said during the company's August earnings call.

"We feel very good about the circumstances and facts of our trial and are prepared to go there," Frenzel said.