This story was last updated at 5 p.m. on Sept. 25.
On the eve of trial, Xcel Energy and two telecommunications companies agreed to pay $640 million to settle lawsuits over the December 2021 Marshall Fire, the company said on Sept. 24.
The agreement still requires final approval from the plaintiffs, which include homeowners, businesses and insurance companies. The two-month trial, scheduled to begin Thursday, Sept. 25, in Boulder County District Court, was vacated, according to a recent court order.
Xcel said about $350 million of the settlement will be covered by its insurance and “none from its customers.” Xcel’s announcement of the settlement also included two telecommunications companies named as defendants in the lawsuit, Qwest Corporation and Teleport Communications America, LLC. The companies have telecommunications lines that run along Highway 93, according to court records.
Plaintiffs alleged Xcel was responsible for one of two fires that merged on Dec. 30, 2021. Fueled by gusts up to 100 miles per hour and dry conditions, the fire killed two people and destroyed or damaged about 1,000 homes and structures. The more than 4,000 plaintiffs sought damages for destroyed property, smoke and ash contamination, evacuation expenses, lost income and emotional distress, among other costs associated with the fire.
Investigators traced one ignition to a debris burn on the Twelve Tribes property. The other began near the Marshall Mesa Trailhead, where winds allegedly knocked an Xcel power line loose from its insulator, releasing sparks and igniting dry grass.
Plaintiffs argued Xcel failed to properly maintain its equipment and vegetation and should have shut off power during extreme wind conditions. The company has denied responsibility, stating its power lines did not cause the fire and that ignition alone does not prove negligence.
“After years of Xcel denying any responsibility for the Marshall Fire, we’re pleased to agree to this negotiated outcome that provides real relief for fire survivors and holds Xcel accountable,” Matthew Preusch, a lawyer with Keller Rohrback who represented plaintiffs, told Boulder Reporting Lab.
Xcel had prepared thousands of exhibits for trial, which was expected to include testimony on fire science, weather patterns and electrical infrastructure. Jury selection was set to begin this week.
“Despite our conviction that [Public Service Company of Colorado] 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. “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.”
Boulder County District Attorney Michael Dougherty also reflected on the fire’s toll in a statement on the settlement.
“Thousands of people suffered devastating losses from the Marshall Fire. It has been incredible to see the victims and community members rally around each other, rebuild, and recover,” Dougherty said. “But, for some, the trauma and financial losses remain incredibly difficult. It is our hope that any settlement will allow all those impacted to continue to recover and rebuild.”
Jeri Curry, executive director of Marshall ROC, a recovery group for Marshall Fire survivors, said some homeowners are unsure what the settlement will mean for them. She said she’s worried about the timing of payouts and how they might affect federal income taxes under the Federal Disaster Tax Relief Act of 2023. Curry said she also has questions about whether the payments could be considered a “duplication of benefits” for residents who received federal disaster grants, potentially forcing some to repay that aid.
“At the end of the day, there are a lot of questions as to how this settlement is going to help homeowners either recover financially, build if they haven’t started rebuilding, or to help them recover their lives,” Curry told Boulder Reporting Lab. “There is this big question as to what this actually means for them. Now they just have to wait.”
So it’s fair to say then the other $290 million dollars will come from rate-payers rather than Xcel Energy’s profits. Not to mention, of course, that $350 million dollar insurance payment will def raise their insurance rate, another expense that will opaquely be passed back to the people as well. This is the fundamental problem with settlements for public utilities, in that’s they are publicly-funded….so any settlement or negligence behavior that leads to one only come from us the end, which is crazy and yet never mentioned. How much is the Xcel currently seeking in rate increases from the PUC again? These are all pertinent pieces of info worth highlighting, especially since utlimately we are subsidizing poor business practices and unaccountability. Has the 12 Tribes been sued either, or was this all about going for the deepest pockets….ours.
How much will each homeowner receive of the $640 million? After attorney fees, payments to the corporate plaintiffs? Have the homeowners been ‘made whole’ or still out of pocket?
Most homeowners will most likely still be out of pocket. Each law firm negotiated a settlement on behalf of their own clients and will now create settlement proposals for each of their clients, who then have to decide whether or not to opt-in and accept the proposed settlement.