Facing nearly 300 lawsuits following a wildfire that destroyed 1,084 homes and killed two people, Xcel Energy filed a $1.9 billion wildfire mitigation plan Thursday aimed at prevent future fires.
Initiatives in the three-year plan include adding hundreds of weather stations and cameras, adding technology to more precisely target planned outages, replacing outdated equipment and increasing line inspections by radar drones .
“These investments are about mitigating a risk,” Robert Kenney, CEO of Xcel’s Colorado subsidiary, said in an interview. “We’re trying to do everything we can to address this issue and keep our customers safe.”
The plan, which must be approved by the Colorado Public Utilities Commission, would increase the average residential customer’s bill by 9 percent, or $8.88 per month.
Wildfires started by utilities are becoming more common as power lines are vulnerable to high temperatures and extreme weather, particularly in the West, where recent blazes in Texas, California, Oregon and Colorado have caused billions of dollars in damage.
The Marshall Fire, sparked by high winds on December 30, 2021, tore through the unincorporated counties of Boulder, Superior and Louisville, destroying homes and businesses and causing $2 billion in property damage.
Boulder County authorities determined sparks from an “unmoored power line” from Xcel Energy were one of the causes of the fire. The company disputes this conclusion.
In February, Xcel Energy acknowledged that its equipment likely started the Smokehouse Creek Fire in the Texas Panhandle. The blaze, which grew to 1.2 million acres, was the largest in state history.
By the end of 2023, approximately 280 Marshall fire lawsuits had been filed against Xcel Energy, including by Target Corp., the Boulder Valley School District, the Superior and Louisville governments and 150 insurance companies covering affected homeowners .
Utility Companies Make Unprecedented Difficult Decisions
The challenge for utilities developing wildfire mitigation plans is that it’s a new exercise, said Kyri Baker, an assistant professor of systems engineering at the University of Colorado.
“There are a lot of difficult decisions to be made without precedent,” Baker said. “There is no road map for mitigating wildfires. This is going to be different for every utility in every state.
“Colorado is unique, our situation is unique, we are a little more susceptible to wildfires and we have a lot of infrastructure around nature,” she said.
Briefly reviewing Xcel Energy’s initiatives, Baker said, “Some of these improvements are necessary. I don’t know if they’re $1.9 billion, but it seems like a lot.”
But utilities face the challenge of balancing risk with capital expenditure. “What would happen if a line went down and it caused a fire that destroyed a thousand homes?” Baker wonders. “That would be a public relations nightmare.”
“It’s hard to put a price on reliability and resilience,” she said.
Xcel Energy classifies its wildfire risk areas into three tiers. About 235,000 customers live in Tier 3 areas, where the fire risk is highest. Another 320,000 live in Tier 2 areas, where the fire risk is highest. The utility has a total of 1.6 million electric customers.
The 2025-2027 plan expands on the company’s previous wildfire mitigation plan and has six key elements:
- Installation of weather stations and forest fire detection cameras for better situational awareness.
- Increase the frequency of technological inspections of our poles and equipment.
- Implementation of infrastructure improvements such as targeted burial of power lines, equipment modernization and reconstruction of major transmission lines.
- Accelerate and extend vegetation management near our infrastructures.
- Adding new equipment and technology to expand the use of our Enhanced Power Line Safety Parameters program and improve the ability of our facilities to respond to wildfire risk events.
- A comprehensive public safety power outage program, including emergency power rebate programs, enhanced interactive outage maps, and active work to educate, prepare, and support customers in the event of a potential outage.
The latter two items will help the utility be efficient and “more surgical” in shutting down power lines during extreme weather events, such as high winds or storms, to reduce fire risks, Anne said Sherwood, regional vice president for wildfire mitigation.
In April, Xcel Energy shut down part of its grid to reduce wildfire risk amid high winds. It was the first time the utility had used such a planned outage. But with little notice and information available, the shutdown caused chaos and prompted a PUC investigation.
Xcel Energy said it may resort to planned outages in the future.
“The starting point has to be trust between the utility and the consumer,” Baker said, adding that better information needs to be available.
Proposed $1.9 billion wildfire mitigation plan comes after PUC greenlights $440 million Xcel Energy clean heating plan to reduce emissions greenhouse gases; a $264 million transportation electrification plan; and a $12 billion clean energy plan to expand renewable energy production.
All these plans will be paid by customers through their invoices.
As for the $1.9 billion for wildfire mitigation, Kenney said that over three years, that’s less than 30 cents a day on a customer’s bill “and it adds some pretty sophisticated equipment that’s going to make it safer… and more reliable and more resilient.”
“We’re extracting a lot of value for that $1.9 billion,” he said.