Texas Attorney General Ken Paxton has filed a lawsuit against Southwestern Public Service Company, the Xcel Energy(XEL.O) unit responsible for the deadliest wildfire in Texas history. The Smokehouse Creek fire killed three people in 2024, burned through over 1,500 square miles, and caused more than $1 billion in damages.
Shares of Xcel Energy dropped 4% in afternoon trading following the announcement.
What the Lawsuit Demands
The suit seeks compensation for economic losses including property damage and diminished wildlife value, civil penalties for violations of Texas law, and a court order forcing Xcel to implement corrective measures to prevent future disasters. Critically, it also aims to block the company from passing these costs on to customers.
“Xcel owes a duty of care to the residents and customers in its service area. Xcel failed this duty, and I am here to hold them accountable,” Paxton said.
Earlier this year, Paxton’s office had launched an investigation into several utility companies connected to both the Smokehouse Creek and Windy Deuce fires.
The Fire’s Devastating Toll
The Smokehouse Creek fire scorched more than 1,500 square miles (3,885 square kilometers) across the Texas Panhandle before spreading into Oklahoma, making it the largest recorded wildfire in state history. The blaze destroyed homes and livestock and left a charred landscape in its wake.
The three fatalities included a woman overtaken by flames after exiting her truck, another woman whose remains were discovered in her burned home, and a fire chief who died while responding to a house fire in one of the hardest-hit towns.
Aging Infrastructure at the Center
Texas A&M Forest Service investigators determined the fire was ignited when a decayed utility pole snapped and fell, dropping Xcel power lines onto dry grass. The Minnesota-based company has acknowledged its equipment appeared to have sparked the wildfire.
But the lawsuit goes further, claiming Xcel neglected to replace aging utility poles in the windswept Panhandle—some of which were nearly 100 years old and more than twice their typical 40-year lifespan.
“Xcel’s blatant negligence killed three Texans and caused unfathomable destruction in the Texas Panhandle,” Paxton stated. “The company made false representations about its safety commitments and ignored warnings that its aging infrastructure needed immediate repair and to be updated.”
Xcel’s Response
The company disputes the claims of negligence, though it has accepted responsibility for equipment failure. Xcel says it has already paid out more than $361 million to settle 212 of 254 claims.
“When the Attorney General’s office approached us earlier this year requesting information, we worked with them in good faith to try and find a consensus solution,” Xcel said in a statement. “They chose to file litigation instead. We will review this litigation and vigorously defend ourselves against these allegations.”
The case raises critical questions about utility accountability and infrastructure maintenance as climate change increases wildfire risk across the American West and Great Plains.
