Xcel Energy, Colorado’s largest utility, announced Wednesday that it will pay roughly $640 million to settle litigation tied to the catastrophic 2021 Marshall Fire, the deadliest and most destructive blaze in the state’s history.

The settlement comes as trial proceedings were set to begin this week. The fire, which ignited on Dec. 30, 2021, ripped across Boulder County, killed two people, leveled more than 1,000 structures, and scorched thousands of acres.

Despite the payout, Xcel continues to deny that its subsidiary, Public Service Company of Colorado, bore responsibility for sparking the inferno.

Xcel Maintains Its Defense

“Despite our conviction that our equipment did not cause the Marshall Fire or plaintiffs’ damages, we have always been open to a resolution that reflects the strong defenses we have,” said Bob Frenzel, Xcel’s chairman, president and CEO. “This settlement reinforces our commitment to the communities we serve.”

The deal covers claims brought by individual homeowners, insurers pursuing subrogation, and public entities, but it remains contingent on final documentation and opt-ins from plaintiffs.

Importantly, Xcel stressed that the agreement does not amount to any admission of negligence, fault, or wrongdoing.

Who Pays What

Of the $640 million settlement, Xcel expects its insurance coverage will absorb about $350 million, ensuring customers won’t bear the financial brunt.

Telecommunications companies Qwest Corp. and Teleport Communications America LLC will also contribute, after plaintiffs alleged that their lines may have played a role in igniting the blaze.

Frenzel said the joint contributions aim to “bring some closure for the community” still reeling from the devastation.

Wider Efforts on Wildfire Prevention

Beyond the settlement, Xcel said it has launched a comprehensive wildfire mitigation strategy, which the Colorado Public Utilities Commission has unanimously approved. The 2025–2027 plan includes infrastructure investments, enhanced maintenance, real-time fire-risk monitoring, and expanded coordination with state and local agencies.

Legal Firepower

The sprawling litigation drew a deep bench of legal talent.

• Individual plaintiffs were represented by Edelson PC, Singleton Schreiber LLP, Robins Cloud LLP, Engstrom Lipscomb & Lack APC, Schack Law Group, and Keller Rohrback LLP.

• Subrogation plaintiffs were represented by Grotefeld Hoffmann Gordon Ochoa & Evinger LLP, Cozen O’Connor, Bauman Loewe Witt & Maxwell PLLC, and Denenberg Tuffley PLLC.

• Public entity plaintiffs were represented by Baron & Budd PC and Diab Chambers LLP.

• Xcel turned to powerhouse firm Cravath Swaine & Moore LLP, alongside Michael J. Gallagher Law PLLC.