Texas Sues Xcel Over ‘Blatant Negligence’ in Fatal Wildfire (2)

Texas Attorney General Ken Paxton sued Xcel Energy Inc., accusing the utility company of “blatant negligence” over its role in the Smokehouse Creek wildfire that killed three people and caused more than $1 billion in damage last year.

“The company made false representations about its safety commitments and ignored warnings that its aging infrastructure needed immediate repair and to be updated,” according to a statement from the AG’s office Tuesday. Xcel shares fell as much as 4.34% on Tuesday.

Paxton said in August that he was investigating Xcel for its role in the Smokehouse fire and another blaze, claiming the company may have prioritized environmental and diversity goals over maintenance and safety. Xcel has acknowledged that its infrastructure was likely involved in starting the Smokehouse fire but has refuted accusations of negligence.

The lawsuit filed in a state court in Hemphill County in the Texas panhandle is the latest example of the pressure on utility companies like Xcel to provide electricity across the US West without sparking wildfires, especially during extreme weather events. Power companies across the US are increasingly opting to turn off electricity to prevent downed power lines and other equipment from sparking catastrophic wildfires.

Read more: Texas Blames ESG Goals in Probe of Xcel Over 2024 Wildfires

The company said it was “deeply disappointed that the Attorney General decided to pursue this litigation” and that it has set up a fund for victims that has already paid out $361 million.

“Though Xcel Energy disputes claims that it acted negligently in maintaining and operating its infrastructure, we accepted responsibility from the beginning and set up an expedited claims process,” the company said in a statement. “Even now, the work to fairly compensate those affected continues.”

In addition to negligence claims, Paxton’s lawsuit accuses Xcel of violating state consumer protection laws for allegedly misrepresenting the safety and reliability of its equipment and failing to disclose possible hazards to consumers.

‘Trespassing’

The lawsuit also accuses Xcel of trespassing, stating that the company “trespassed upon the State’s property by igniting the Smokehouse Creek Fire, which entered and damaged such property without authorization.”

Paxton is seeking punitive damages for damage caused to state property, as well as civil fines. The lawsuit also seeks restitution for any consumer who suffered losses as a result of the fire.

In addition to monetary payments, Paxton is seeking a court order requiring Xcel to immediately replace all of its utility polls and to provide public warnings about wildfire risks. He is also seeking an order that would prohibit Xcel from shifting fire-related costs onto consumers through rate increases.

(Updates with additional details from the lawsuit.)

To contact the reporters on this story:
Josh Saul in New York at jsaul15@bloomberg.net;
Madlin Mekelburg in Austin at mmekelburg@bloomberg.net

To contact the editors responsible for this story:
Brian Eckhouse at beckhouse@bloomberg.net

Anthony Aarons, Josh Saul

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