Dive Brief:

• Xcel Energy has emerged from court-ordered mediation without a settlement and will go to trial for its role in the 2021 Marshall Fire in Colorado, company executives said during a Thursday earnings call.

• A 2023 investigation by the Boulder County Sheriff attributed the fire to the merging of two independent ignitions: kindling from an old fire on a property owned by the Twelve Tribes, a religious organization, and sparks from an Xcel Energy power line. President and CEO Bob Frenzel said the company believes it can prove its equipment did not start the fire.

• The company is already paying claims on another fire, the 2024 Smokehouse Creek Fire in the Texas panhandle, on which it faces an estimated $290 million in liability.

Dive Insight:

Xcel Energy remains open to settling with the more than 500 parties suing the utility for the Marshall Fire. But any settlement, Frenzel said Thursday, must “start with the idea that our equipment didn't cause that second” ignition.

Hearings are set to begin on Sept. 25 and will likely continue through November now that the July 31 deadline for court-ordered mediation has passed, Frenzel said. When the fire started, he said, the embers on the Twelve Tribes property were fanned by 100 miles per hour winds for over an hour and 20 minutes, allowing it to spread into nearby towns long before the second ignition at Xcel Energy's power line is alleged to have taken place, he said.

“As we step back and think about the trial broadly and the fire broadly, we continue to maintain that our equipment didn't start the second ignition in the wildfire, and we're prepared to go to court,” Frenzel said, later adding that “we feel very good about the facts and circumstances of our trial.”

Insurance data suggest the fire caused about $2 billion in damages, but the actual liability the company could face would not be determined until a second trail that would only take place if the first trial this fall concluded Xcel Energy was at fault, Frenzel said.

Meanwhile, CFO Brian Van Abel reported that Xcel Energy has so far committed to $176 million in settlement agreements for claims related to the Smokehouse Creek fire, which he said remains on track to trigger a total of about $290 million in liability. These costs should be covered by the company's $500 million insurance policy, Van Abel said.

Company leaders also announced their intent to add some $15 billion in capital investment to its existing $45-billion capital plan in order to serve growing demand and reliability needs. The $15 billion figure includes a need for 5.2 GW of new generation and storage to be placed into service by 2030, and $3 billion to $4 billion for at least two regional transmission projects, Frenzel said. The company expects to release more details on its revamped five-year capital plan, including its plans for financing the expansion, following the close of the third quarter.