Xcel Says Its Equipment Likely Involved in Huge Texas Blaze

Xcel Energy Inc. acknowledged that its equipment was likely involved in igniting the worst wildfire in Texas history. But the utility company refuted allegations it had acted negligently.

“Based on currently available information, Xcel Energy acknowledges that its facilities appear to have been involved in an ignition of the Smokehouse Creek fire,” the company said in a statement Thursday.

Xcel said last week that it had been asked by a law firm to preserve a fallen wooden pole located near the potential origin of the Smokehouse Creek fire, which has charred more than 1 million acres and resulted in at least two deaths. The pole had been inspected and marked with a “do not climb” red tag before the blaze erupted during dry and windy conditions in late February, according to photos reviewed by Bloomberg News.

While recognizing that its equipment may have been involved in starting the fire, the company “disputes claims that it acted negligently in maintaining and operating its infrastructure,” according to the statement. The shares gained 1% before the start of regular trading in New York.

Xcel has lost more than $5 billion in market value since it disclosed early on Feb. 29 that the law firm was alleging a link between its equipment and the possible start of the Texas blaze.

The company is the latest utility owner to face scrutiny over the potential role its equipment played in sparking wildfires. Utilities have been investigated for starting fires from Hawaii to Colorado. In the latter, Xcel faces lawsuits that accuse one of its utilities of starting the most destructive fire in state history, which officials concluded was caused in part by a power line that snapped.

Warren Buffett, whose PacifiCorp utility faces multibillion-dollar wildfire claims, told investors in his recent annual letter that electric utilities no longer appear to be safe investments due to losses incurred from more frequent forest fires.

Top photo: Fire crews work to extinguish hot spots following the Smokehouse Creek Fire in Fritch, Texas on March 1.