Xcel admits its equipment helped spark historic Texas wildfire

The largest wildfire in Texas history may have started with an Xcel Energy utility pole, a fact that could have financial repercussions for the company as it faces legal threats over the destructive blaze and lawsuits tied to another fire in Colorado.

Xcel said in a Thursday morning statement that it didn’t act negligently. But it admitted that its equipment appears to have been an ignition source of the Smokehouse Creek fire that has ravaged the Texas Panhandle since late February, burning more than 1 million acres.

A series of fires across the grassland region have destroyed as many as 500 structures and killed at least two people. Minneapolis-based Xcel serves the area through its subsidiary Southwestern Public Service Company.

“The people in this region are our friends, neighbors and relatives,” said CEO Bob Frenzel in a statement. “We are deeply saddened by the losses incurred in this community, and we are committed to supporting its renewal and recovery.”

The Texas A&M Forest Service investigators also said Thursday that power lines ignited the Smokehouse Creek fire and the nearby Windy Deuce fire. Xcel said it was not responsible for Windy Deuce.

Xcel said it “acknowledges that its facilities appear to have been involved in an ignition of the Smokehouse Creek fire.”

But it disputed that it acted negligently in maintaining and operating its infrastructure. The company said anyone with property destroyed or livestock killed in the blaze should submit a claim to Xcel.

Last week, Xcel was warned by a law firm representing property insurers that the utility could face liability for the wildfire, causing the company’s stock to fall nearly 9%. Xcel was asked to preserve a fallen utility pole.

A lawsuit filed last week on behalf of a Texas homeowner against the company and two other utilities said the Smokehouse Creek fire began “when a wooden pole defendants failed to properly inspect, maintain and replace, splintered and snapped off at its base.”

On Wednesday, Bloomberg News reported that an Xcel pole kept as evidence was marked with a “do not climb” sign before the wildfire began.

Kevin Isern, attorney with the Amarillo law firm Lovell, Isern & Farabough, said the firm plans to file up to four lawsuits soon and have at least 20 clients related to the Smokehouse Creek fire.

He told the Star Tribune that he believes, based on visits to the scene by the firm’s expert, that an Xcel electric pole came out of the ground and wires sparked the blaze.

“The fire was caused by a lack of maintenance on the poles and electric lines that they own,” Isern said. “This isn’t something new to Xcel, they provide electricity in our area, they know what our weather is like, they know what the winds are like. They have a duty to make sure that everyone is safe.”

Isern said one client has a 50,000-acre ranch that was entirely burned. “All the fences, all the animals, all the grassland,” he said.

Xcel said 47 occupied homes in Hemphill County and up to 17 in Roberts County were destroyed by the fire. Both are rural counties near or along the border with Oklahoma. In Hutchinson County, which has been burned by both fires, Xcel said the number of lost homes from the Smokehouse Creek blaze appears to be smaller than in Hemphill County.

Fire officials say the Smokehouse Creek fire is 74% contained. A cold front is expected to bring lower temperatures and more moisture to the area after midnight Friday.

If Xcel faces financial hits from the Texas fire, it would come on top of legal challenges the utility is staring down in Colorado after the December 2021 Marshall fire near Boulder.

Lawsuits there claim the company is partly responsible for the destructive blaze. Xcel denies it is at fault and claims a flawed sheriff’s investigation concluded its equipment caused one of two blazes that merged.

However, in January, Xcel said in its quarterly earnings report that if the company was found liable and required to pay damages, the amount could exceed its insurance coverage of roughly $500 million and hurt its “financial condition, results of operations or cash flows.”

That fire burned more than 6,000 acres, killing two people, destroyed in excess of 1,000 residential buildings and reportedly caused about $2 billion in property damage.

Xcel’s biggest two markets are in Colorado and Minnesota, but it covers parts of several other states, including Texas. The company’s stock closed up 3.3% Thursday, though it is still down significantly from before the fire in late February.

Downed power lines and other utility equipment have led to other major wildfires, including the deadly blaze in Maui last year and a massive California wildfire in 2019.

Southern California Edison recently agreed to pay $80 million to settle claims on behalf of the U.S. Forest Service connected to the massive Thomas wildfire that destroyed more than a thousand homes and other structures in 2017, federal prosecutors said in February.

The utility has also settled claims related to the enormous Woolsey fire in California in 2018. Edison estimated in 2021 that total expected losses for both blazes would exceed $4.5 billion.

Includes reporting by the Associated Press.