The Texas Attorney General’s office filed a lawsuit against Xcel Energy’s unit, Southwestern Public Service Company (PSCo), on December 16, 2025, alleging that the company’s aging power lines sparked the Smokehouse Creek wildfire that began on February 26, 2024. The suit seeks more than $1 billion in damages and civil penalties and aims to prevent Xcel from shifting the wildfire costs onto its customers.
The Smokehouse Creek fire was the largest wildfire in Texas history, burning over 1 million acres and extending into western Oklahoma. The blaze caused three deaths, the loss of more than 15,000 cattle, and extensive property damage, with economic losses estimated at over $1 billion. Investigators and the lawsuit point to a decayed utility pole—some of which were nearly 100 years old, twice the typical 40‑year lifespan—that snapped and dropped energized lines onto dry grass, igniting the fire. Xcel has acknowledged that its equipment was likely involved in the ignition but disputes claims of negligence.
Xcel’s defense centers on its expedited claims process and its acceptance of responsibility for equipment failure. The company has already paid out more than $361 million to settle claims related to the Smokehouse Creek fire and has maintained that it has not admitted fault. CEO Bob Frenzel said, “Despite our conviction that PSCo equipment did not cause the Marshall Fire or plaintiffs’ damages, we have always been open to a resolution that properly accounts for the strong defenses we have to these claims. In resolving all liability from the claims, this settlement reinforces our longstanding commitment to supporting the communities we serve.”
The lawsuit adds to Xcel’s existing wildfire liabilities, including a $640 million settlement for the 2021 Marshall Fire in Colorado. The combined exposure could strain the company’s finances and complicate its capital investment and rate‑case strategy. Regulators and investors are watching closely, as the litigation could limit Xcel’s ability to recover wildfire costs from customers and may prompt further regulatory scrutiny of its infrastructure maintenance practices.
The Texas Attorney General’s filing underscores growing ESG concerns for Xcel. The company’s infrastructure maintenance and wildfire mitigation practices are now under heightened scrutiny, and the lawsuit could influence future regulatory decisions and investor perceptions of Xcel’s environmental and governance commitments.
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