The leaders of Xcel Energy Inc. have reached settlements on their wildfire mitigation plan in Colorado and a system resiliency plan in Texas, proposals that combined will invest nearly $2.4 billion in those states.
Commission decisions in both cases are expected during the third quarter of this year. In Colorado, Minneapolis-based Xcel is planning to invest $1.9 billion through the end of 2027, with $1.6 billion of that going to capital projects, including new weather stations and artificial-intelligence cameras, as well as $300 million to operations and maintenance.
If approved later this year, the plan will help Xcel address a rapidly growing threat in Colorado. In their application, Xcel leaders said areas with moderate-to-high fire risks have doubled in scope since 2020 and that three of the state’s largest-ever fires have occurred in recent years. One of those, the Marshall Wildifre that ignited in Boulder County in late 2021, caused an estimated $2 billion in damages and had Xcel facing more than 300 lawsuits over its alleged role in starting the blaze. Those complaints were consolidated in 2023 and the case is scheduled to go to trial in September.
In Texas, the company’s three-year plan aims to reinforce poles and wires, update protection systems and expand automation of a network that covers about 280,000 homes and businesses in the Panhandle and South Plains region. Xcel officials filed their plan last December, about 10 months after the Smokehouse Creek Fire ripped through the region after having likely been caused at least in part by a fallen utility pole.
While reporting their first-quarter results in late April, Xcel executives raised their estimate of the company’s minimum liability related to the Smokehouse Creek Fire to at least $290 million from their previous $215 million. Speaking to analysts, CFO Brian Van Abel said the new forecast includes some compensation for claims from railroads as well as settled claims related to tree damage.
Van Abel said Xcel has set aside $113 million for settlement agreements that will resolve 151 of the 225 claims submitted to the company since last year. He also pointed out that Xcel has $500 million of insurance to cover potential losses.
In the first three months of 2025, Xcel posted a net profit of $483 million on operating revenues of $3.9 billion. (In the same period of last year, those numbers were $488 million and more than $3.6 billion, respectively.) Adjusted for 2024 being a leap year and normalized for weather, the company’s electric sales rose 1.9% year over year—with growth of nearly 5% in its Southwestern Public Service Co. footprint in Texas leading the way.
Shares of Xcel (Ticker: XEL) closed May 5 trading at $70.89, up slightly on the day. Over the past six months, they have climbed about 7%, which has grown the company’s market capitalization to nearly $41 billion.
