Dozens of insurers sue Xcel to recoup Colorado wildfire losses

Dozens of insurance companies have sued Xcel Energy to recoup losses stemming from a huge Colorado wildfire that authorities say was ignited partially by a wind-whipped power line.

The December 2021 fire, dubbed the Marshall fire, burned over 6,000 acres in Boulder County, killing two people, destroying over 1,000 residential buildings and reportedly causing about $2 billion in property damage.

The insurers suing Xcel for alleged negligence have paid — or will pay — fire-related claims from homeowners and other parties. Minneapolis-based Xcel, which counts Colorado and Minnesota as its two major markets, declined to comment on the suit.

The Boulder County Sheriff's Office investigated the Marshall blaze, and last month concluded that it was caused by the merger of two separate fires, one rooted in damage to Xcel's power distribution system.

The Sheriff's Office found that during a burst of "extraordinarily" high winds, an Xcel power line along a highway came "unmoored and sagged low enough to contact a support brace."

Photos from a nearby motion-activated camera then showed smoke and flames in the area where the line broke.

Xcel has said the sheriff's "analyses are flawed, and their conclusions are incorrect. ... We strongly disagree with any suggestion that Xcel Energy's power lines caused the second ignition."

The insurance companies, led by Allstate, claim that Xcel "failed to properly design, construct, inspect, maintain, repair, manage, and/or operate its electrical equipment" under U.S. electric safety standards.

Further, Xcel knew that its equipment was "old" and "unsafe" and was vulnerable to bad weather, the insurers claim in the suit filed last week.

Xcel, in its statement after the sheriff's investigation, said it operates its electric system with "leading" service practices: "We have reviewed our maintenance records and believe the system was properly maintained."

The insurance companies don't appear to have sued Twelve Tribes. In their suit against Xcel, they say the Xcel fire spread more rapidly than the Twelve Tribes fire.

The insurers are asking for damages from Xcel that would be determined by a jury trial.

Last month, a jury in Oregon found that PacifiCorp was liable for $73 million in damages connected to several fires in 2020. The jury ruled in favor of 17 homeowners and left PacifiCorp open to far greater damages claimed by a larger class of homeowners.

In 2021, Southern California Edison reached a $2.2 billion settlement with insurers over a 2018 fire that scorched Malibu. In 2020, the same utility agreed to a $1.16 billion settlement with insurance companies over fires in 2017 in two California counties.

Pacific Gas & Electric, which serves much of Northern California, was blamed by California regulators for a series of devastating wildfires in the late 2010s. With billions of dollars in claims pending, PG&E filed for Chapter 11 bankruptcy in early 2019.