Xcel Energy named in 15 lawsuits over 2024 Texas panhandle fires

• Xcel Energy has been named in 15 lawsuits in connection with the Smokehouse Creek Fire in the Texas Panhandle, which burned more than 1 million acres in March. Company leaders acknowledged that power lines owned by Xcel Energy appear to have played a role in igniting the fire during a first quarter earnings call on April 25.
• So far, Xcel Energy estimates its liabilities from the fire will run $215 million, but Chairman, President and CEO Bob Frenzel warned investors that this preliminary figure could increase as more information about the extent of the fire’s damage becomes available.
• Xcel Energy plans to accelerate or launch multiple new wildfire mitigation policies, and has for the first time established a policy to proactively de-energize the grid during severe weather that could fuel wildfires, Frenzel said. Company leadership is also exploring potential state and federal-level policy solutions to limit utilities’ liability for wildfires.

Dive Insight:

Xcel Energy’s $500 million insurance policy should offset the cost of its liability for the Smokehouse Creek Fire — believed to be the largest wildfire in Texas state history. But the company already pays a $400 million premium for this wildfire coverage, and Xcel company leaders say they believe it is time for a legislative solution.

“There are precedents at the federal level — you see stuff like the FDIC or FEMA or flood insurance or other types of programs,” said Brian Van Abel, Xcel Energy executive vice president and chief financial officer. “So I think about where the federal government could help — and this applies to the state level too — is having an approved wildfire mitigation plan that can be reviewed by an agency, and then if you are in compliance … then you have access to some form of backstop insurance program.”

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