Xcel Energy Has a Colorado Fire Mitigation Plan — at a Cost

Xcel Energy submitted its long-awaited wildfire mitigation plan Thursday, seeking approval of $1.9 billion for work to protect Colorado from wildfires started by electrical equipment. Xcel says evolving risks create a need for new technologies, investments and improvements, as well as maintenance.

“This risk is evolving rapidly. And we’re seeing that this is not just a California risk,” said Robert Kenney, Xcel’s Colorado president. “This plan is designed to mitigate as much as possible the risk of our equipment starting a wildfire.”

This comes at a sensitive time for the power company, with Xcel facing hundreds of lawsuits following the 2021 Marshall Fire. Investigators determined a downed line was one of the sources of ignition of the fire, but not the initial source. He also admits his equipment likely played a role in igniting the more than 1 million-acre Smokehouse Creek Fire in Texas in February.

But the company denies the work is intended to protect it from legal exposure.

” Absolutely not. We’ve been working on this plan for many months,” said Anne Sherwood, Xcel’s area vice president of wildfire mitigation.

“The nature of the risk has changed. Our obligation to provide a safe and reliable service has not changed,” Kenny said.

The list of works and improvements is long, including the addition of hundreds of weather stations and artificial intelligence cameras for early smoke detection. The company wants to do more inspections of poles and equipment in wildfire-prone areas and 3D mapping of equipment and terrain. It could bury some lines and wrap other unprotected lines. Xcel also wants to add more switching capabilities to de-energize lines in a more targeted manner.

The company received widespread criticism when it took down lines during a high wind event in April for the way it was handled and the communication. Kenney said this would allow for more targeted measures to take down lines in affected areas.

The demand is high and the company knows it. Consumer advocates already view this request with suspicion.

“What’s interesting is that wildfire mitigation is a normal part of a utility’s business operations. That’s part of the basis for why they’re granted a monopoly,” said Joseph Pereira, deputy director of the Colorado Office of Utility Consumer Advocate. “I think that’s inherent in the monopoly business model of investing in capital, which then generates returns for shareholders.”

Pereira wondered why Xcel customers would be asked to pay the price. Rates have increased by about a third over the past five years. This would mean an increase of 9.56% by January 2028 in a series of increases. This would cost the average customer about $8.88 more per month.

“If you look at each of these cases individually, you see an impact of 2% here, 2% there, 3% in another case. But taxpayers only feel the aggregate,” Pereira said.

Xcel discusses the growing risk caused by climate change. Pereira notes that this would mean helping the company pay the cost of the effects of climate change that it has historically helped cause.

“The question needs to be asked: Do the company and its shareholders also have a responsibility to make these investments and to intervene, because of their role and responsibility, on why we need to mitigate wildfires Today ?” Pereira said.

“Consumer advocates will have an opportunity to review these investments and the commission will make a decision,” Kenney said.

The three-member Public Utilities Commission is responsible for reviewing and approving or denying rate increases. There will be an opportunity for public input. The process will likely take about four to six months before a vote is taken.

“I am confident that the commissioners recognize the evolving nature of wildfire risk,” Kenney said.