The CEO of Colorado’s largest utility continued to dispute its power lines were partially responsible for the most destructive wildfire in state history, but executives acknowledged to shareholders Thursday it might not have enough insurance coverage to pay damages in more than a half-dozen related lawsuits.
In new financial filings, company executives said they were aware of at least eight lawsuits on behalf of more than 500 plaintiffs related to the Marshall fire, which killed two people, destroyed more than 1,000 homes and racked up damages estimated to total more than $2 billion.
In June, the Boulder County Sheriff’s Office released findings from a year-and-a-half-long investigation that concluded Xcel Energy power lines sparked one of two small grassfires that 100 mph wins fanned into a suburban inferno on Dec. 30, 2021.
“We strongly disagree with that conclusion,” Xcel CEO Robert Frenzel said on its Friday earnings call.
Investigators said a second ignition source was ash from a debris fire that was intentionally set days earlier. No criminal charges were filed. Frenzel declined to discuss the Marshall fire or the lawsuits in detail but said the company was preparing a vigorous legal defense.
One of the lawsuits, filed by 150 insurance companies in July, accuses the company of negligence and property damage and seeks an unspecified amount in damages. A second lawsuit filed that month on behalf of two survivors was brought by a law firm with a specialized wildfire team. That firm has worked on costly litigation related to some of the country’s largest wildfires, including the 2018 Camp fire in Paradise, Calif., and the 2020 Oregon Labor Day fire.
Xcel executives said the company has about $500 million in its own insurance policies to pay for lawsuit damages. In related financial documents, the company acknowledges that might not be enough to cover the total cost of payouts if it’s found liable. That could lead to a major financial blow to the utility, the company said in financial filings, which could lead to larger bills for ratepayers.
The Minneapolis-based company reported second quarter revenues of $288 million, down from $328 million in the same quarter of 2022. Its earnings per share also dropped from $0.60 last year to $0.52 this year, missing Wall Street expectations. Xcel Energy’s stock price was down 1.2 percent in Thursday morning trading following the news.
Frenzel blamed the downturn on unpredictable weather, rising interest rates and higher-than-expected operations and maintenance costs.
