Xcel Energy will pay $640M to settle claims from Denver-area wildfire
that burned 1,000 structures
[September 25, 2025] By
COLLEEN SLEVIN
DENVER (AP) — Xcel Energy expects to pay about $640 million to settle
lawsuits alleging it was responsible for starting Colorado’s most
destructive wildfire that killed two people and destroyed nearly 1,000
homes in 2021, the company said Wednesday.
The announcement came as jury selection was set to begin Thursday in a
two-month trial combining lawsuits brought by hundreds of homeowners,
insurers and others over the fire in the heavily populated suburbs
between Denver and Boulder. Court documents confirmed a settlement has
been reached and the trial canceled.
Minneapolis-based Xcel has maintained that its equipment did not cause
or contribute to the fire. It said it does not admit any fault under the
settlement.
Lawyer James Avery said the settlement provides hope to the hundreds of
fire victims he represents. Most of them plan to accept confidential
payouts already determined by mediators based on their circumstances.
“There is a sense of relief and hope for an ending to this tragic
disaster that they continue to struggle with as they rebuild their homes
and lives,” he said.
As global warming makes wildfires worse in the western U.S., utilities
in the region have spent billions of dollars in recent years on
insurance costs and trying to upgrade old equipment to reduce the
chances of accidentally igniting a blaze. They have also faced lawsuits
after major fires from people who contended they did not do enough.
In Colorado, investigators found that a sparking power line owned by
Xcel was one of the causes of the fire that was fanned by high winds.
Embers from a smoldering scrap-wood fire set days before on a nearby
property used by a Christian religious communal group were also found to
have been another cause.
The smoldering fire at the Twelve Tribes property had been buried by
residents a few days before in a way that was approved by firefighters
who stopped by to investigate, authorities said.
The two fires combined into an inferno following months of drought amid
a winter nearly devoid of snow. It spread rapidly in winds that gusted
up to 100 mph (160 kph) in places, causing $2 billion in damage.
Killed in the fire were a 69-year-old man who lived near where the fire
started and a 91-year-old woman last seen trying to rescue her dogs from
her home in Superior.
Authorities spent 18 months investigating the cause of the Marshall Fire
and determined criminal charges were not warranted for either Xcel or
the Christian group.
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A fire burns in a home destroyed by the Marshall Wildfire in
Louisville, Colo., Dec. 31, 2021. (AP Photo/Jack Dempsey, File)
 Xcel said in a statement Wednesday
that it, Qwest Corp., which leased space on Xcel’s power poles for
fiber optic cable, and Teleport Communications America LLC reached
agreements in principle to settle all claims involved. But the
company said homeowners and others who filed lawsuits against it
still had to decide whether to opt into the agreement.
“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 CEO Bob Frenzel said.
A transcript of a hearing held Wednesday to discuss the deal has
been sealed until the end of the day. Lawyers must update the court
on the status of the settlement within the next month, Judge
Christopher Zenisek said in an order.
Xcel said about $350 million of its settlement payment would be
funded by its insurance coverage and that its customers would not
pay any of it.
The lawsuits brought by about 4,000 homeowners, insurance companies
and local governments like fire districts were set to be tried
together. They suffered a variety of losses, from smoke damage to
losing their homes and income.
A construction company Avery represents estimates it lost millions
of dollars in business and equipment and likely won't participate in
the settlement, opting to pursue its own lawsuit instead, he said.
"The intention is to resolve the case with just a couple of
exceptions,” he said.
Utilities in California and Oregon have also faced lawsuits alleging
their equipment sparked destructive wildfires.
Oregon’s PacifiCorp has faced a series of lawsuits over wildfires
that broke out in 2020, which were among the worst natural disasters
in state history. The company reached settlement agreements over the
Archie Creek Fire, including one for $299 million with 463
plaintiffs impacted by the blaze, while juries have ordered it to
pay tens of millions to other wildfire victims.
Earlier this month, the federal government filed two lawsuits
against Southern California Edison, alleging the utility’s equipment
started fires including January’s Eaton Fire in the Los Angeles
area, which destroyed more than 9,400 structures and killed 17
people.
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