Updated at 2:43 p.m. on Wednesday, Sept. 24, 2025.
Xcel Energy and two telecom companies have agreed to a $640 million settlement with plaintiffs on the eve of the Marshall Fire trial.
The “agreement in principle” was announced by the utility company on Wednesday. It is not yet final and must still be approved by the individual plaintiffs in the trial. The exact terms of the settlement are confidential, according to the law firm Singleton Schrieber, which represented several plaintiffs in the lawsuit.
The state’s largest utility said it expects to pay around $640 million to thousands of plaintiffs in the case, which includes insurers, Boulder County and residents. The company expects around $350 million of those payments to be covered by its insurance policies, and that none of the costs will be borne by customers.
The two telecom companies will also contribute to the settlement payments.
Several attorneys for the plaintiffs could not immediately be reached for comment.
District Court Judge Christopher Clayton Zenisek wrote in an order that both sides must provide a written update about the settlement within 30 days. Lawyers will meet again on November 5 to discuss the agreement.
As part of the settlement, Xcel maintains that its equipment did not cause the Marshall Fire, and does not admit to any negligence or fault.
“In resolving all liability from the claims, this settlement reinforces our longstanding commitment to supporting the communities we serve,” said Bob Frenzel, chairman, president and CEO of Xcel Energy.
Tawnya Somauroo, a Louisville resident who lost her home in the Marshall Fire, said the immediate news of the settlement left more questions than answers. On Wednesday afternoon, she was still waiting for her lawyers to provide more details about the settlement terms.
Somauroo mainly hopes settlement dollars will help continue to restitch the neighborhoods impacted by the disaster. By the time her family joined the case, they had already had to move five times due to the fire, which she said caused enormous mental strain and ongoing therapy bills.
And even though Somauroo's family has managed to rebuild, she knows other plaintiffs in the case weren't so lucky.
"I know at least three families in my neighborhood would rebuild if they had enough money. And hoping that I just get that community back. I would settle for that right now," Somaruoo said.
This is not the first time Xcel’s parent company has settled wildfire-related litigation.
Xcel estimates it will pay around $290 million in claims and settlements for its role in Texas’ largest wildfire, the 2024 Smokehouse Creek Fire. The company has settled several lawsuits related to that fire, but it denies it acted negligently.
The company did acknowledge though “that its facilities appear to have been involved in an ignition” of that fire. Some of those payments will also be covered by the company’s insurance.
The trial, which was slated to last until late November, would have focused on whether Xcel and two telecom companies should be held liable for sparking one of the fires that eventually merged into the Marshall Fire. Jury selection was slated to begin Thursday in Boulder County District Court.
If Xcel had been found liable, it could have exposed the company to hundreds of millions, if not more than a billion dollars, in damages. Determining those damages, however, would have been decided in future trials, and could have stretched on for years.
A final settlement, if approved, will significantly shorten that timeline, and shrink the company’s financial risk. In recent years, Western utility companies have faced enormous bills in response to wildfire-related settlements or after being found liable by juries.
In 2023, an Oregon jury found the utility company PacifiCorp liable for sparking several fires in 2020. Subsequent trials for damages have resulted in the company being ordered to pay nearly $500 million to survivors, with more trials scheduled.
Here is some background on the case:
What happened during the Marshall Fire?
On Dec. 30, 2021, two separate fires merged into the rapidly growing Marshall Fire, driven by hurricane-force winds up to 100 miles per hour, according to a 2023 joint investigative report from the Boulder County Sheriff’s Office and the Boulder County District Attorney’s Office. Federal and state officials also worked on the investigation.
The fire raced through Louisville, Superior and unincorporated Boulder County — destroying more than 1,000 homes, seven commercial buildings, and killing two people.
The fire was unusual. It occurred outside of peak summer wildfire season, and a snowstorm later helped extinguish it. It started as a wildfire, but quickly became an urban blaze, igniting entire subdivisions.
What did the official report find?
The 2023 investigative report focused on what started the two original fires.
On Dec. 24, members of the Twelve Tribes Christian sect burned scrap metal, branches and other junk on their property, before covering the pile with dirt. Firefighters responded to the property, but were “unconcerned with the fire,” according to the report, because of the rainy weather and low winds. There were no red-flag warnings in effect for high fire risk at the time.
But less than a week later, a windstorm uncovered part of the pile and spread hot embers, causing a fast-moving grass fire. That, investigators say, was the Marshall Fire’s first ignition.
The second ignition, known as the Trailhead Fire, occurred around the Marshall Mesa trailhead in South Boulder, near Xcel Energy’s power lines and a few thousand feet away from the first ignition.
Investigators and experts concluded that the fire’s source was likely a disconnected Xcel powerline that sprayed hot sparks nearby.
“Ultimately, investigators and experts concluded that the most probable cause of this ignition was hot particles discharged from Xcel Energy powerlines,” the report said.
But, the report could not rule out other causes, which Xcel was using to bolster its case. The Trailhead Fire was near an underground smoldering coal fire, which had ignited a small grass fire in 2005.
Were there criminal charges?
The investigative report concluded that there was no evidence that the Twelve Tribes knew their controlled burn would eventually re-ignite and morph into a massive blaze, or that they acted recklessly when starting or extinguishing their controlled burn.
Experts and investigators also concluded that there was no evidence Xcel committed a crime when designing and maintaining its power line.
“Though the fire devastated thousands of people, there was insufficient evidence that a crime was committed that could be proven beyond a reasonable doubt,” a spokesperson for the Boulder County DA’s Office said in an email to CPR News.
But the investigation did not close the door on a civil case against Xcel and other groups.
So who sued whom?
Plaintiffs — which include hundreds of residents, businesses, Boulder County, and insurance companies — claimed that power and telecom equipment caused the Trailhead Fire, which eventually ballooned into the Marshall Fire.
They claimed that Xcel, as well as two other telecom companies, acted negligently in causing that ignition, which eventually led to the loss of their homes and other damages, according to a draft of the jury instructions filed by the Boulder County District Court.
Xcel and the telecom companies — Teleport Communications America and Qwest Corporation — argued that their equipment had no role in sparking the Trailhead fire.
Xcel also contended that the Twelve Tribes, and other groups, were the ones to cause the plaintiffs’ damages and should be liable.
“In short, the evidence at trial will establish that any losses suffered by Plaintiffs were suffered at the hands of the Twelve Tribes, not Xcel,” according to a brief filed by Xcel’s lawyers last week.
The plaintiffs are represented by a constellation of lawyers and firms from around the country. Xcel is being represented by a Denver firm and the white-shoe New York firm Cravath, Swaine & Moore.
What was at stake for Xcel Energy?
Xcel is owned by investors, and generates enormous revenue from its nationwide operations. But based on previous settlements against utility companies, and Xcel’s own documents, the company faced significant financial risk had it gone through with the trial.
In a July 2025 earnings document, Xcel said court-ordered damages from the trial, if it had been found liable, could exceed its insurance coverage for such claims, which is around $500 million.
It had already burned through around $100 million of that coverage in legal costs through June 2025, according to the document.
Could Coloradans see higher bills from the settlement?
In a press release announcing the settlement, Xcel said that none of the settlement payments would come from customers.
Coloradans already pay for expenses that help Xcel reduce wildfire risk, like clearing vegetation around power lines. Coloradans have historically also paid for some of the company's “excess liability insurance” premiums.
In 2024, Xcel’s insurers hiked the company’s liability insurance costs by around 300 percent, partly because of wildfire risk.
Last year, a PUC employee recommended that if juries do find Xcel Energy responsible for starting Colorado fires, the company should not be able to bill customers for any insurance costs related to those fires.
How has Colorado changed its approach to wildfires since the Marshall Fire?
When the Marshall Fire broke out, Xcel already had a “Wildfire Mitigation Plan” in place to help reduce its wildfire risk. But this year, state regulators approved a larger, much more expensive plan to help the utility deal with wildfires.
The plan — which will likely raise customer bills — is an acknowledgement that both the state and Xcel must take a proactive approach to addressing wildfires. It includes using AI cameras and placing some powerlines underground, a costly endeavor.
Colorado communities, many of whom are dealing with insurers dropping their coverage because of wildfire risk, are also adapting. For example, in December 2024, new building codes went into effect in Louisville, which require new construction and renovations to be hardened against wildfires.
