Jared Polis on money spent on wildfire risk

As Xcel Energy begins spending $1.9 in preventative work, governor outlines what he believes should be the test for spending

by Allen Best

Governors have the job of speaking well of their states when in national forums, and Jared Polis certainly played that role well at an energy storage conference during September that happened to be held in Colorado.“I ran for office (in 2018) with the goal of making Colorado achieve 100% renewable energy by 2040,” he said at the American Clean Power’s ReCharge Energy Storage Conference on Sept. 22. “We are very, very much on track to be well over 80% by 2030. In just three more years, we’ll probably be in the low 80s.”

The questions were reliably friendly as Polis went through the list of Colorado’s progress in geo-exchange for building heating and cooling, the advances in charging stations for electrified transportation, the 300 days of sunshine and the strong, predictable winds in many areas of the state.

And, of course storage. The question, said Polis, was cost and how would it compare with geothermal or nuclear or coal.

Then he caught himself. “They’re all lower cost than coal, obviously. We also add dispatchable natural gas into that mix. We have to be realistic about how we can compete with that and how we can provide energy at lower cost.”

His mid-afternoon appearance before a few hundred conference-goers at the Gaylord, the 1,500-room hotel near DIA, was probably the fourth or fifth public appearance of the day. He gets around. Still, he was able to talk energy at a high level — and still produce a smile.

For example, he talked about the mix of electricity utilities in Colorado. Xcel Energy and Black Hills Energy, the two investor-owned utilities, probably have 70% of the state’s market share. But there were others, cooperatives and municipal utilities. That includes Aspen Electric, a municipal utility which in 2017 was able to proclaim that its electricity came from 100% renewable source, the first in the nation.

In Colorado Springs, electricity also comes from a municipal utility. That city, of course, has long been dominated by Republicans, and Polis is a Democrat. A theme of Republicans, especially during these times, is that Democrats are pushing socialism. He said he makes a point of telling people there that they have a people-owned socialist utility.

Polis intended to brag on about Colorado’s low average cost per household for electricity, behind only Utah and the District of Columbia, at $1,194, according to this report (pages 41-42) He inadvertently said Colorado has the third or fourth lowest rates in the country. By that measure, according to U.S. Energy Information Administration, Colorado ranked around 30^th lowest in 2025.

Polis’s most interesting comments were about the risk of power lines causing wildfires, as has occurred in California. In the wake of the Marshall Fire in December 2021, Xcel agreed to pay $640 million to settle a lawsuit by those alleging the fire that burned nearly 1,000 homes and other buildings was caused by Xcel’s power line. It did so without admitting being the cause.

Xcel then adopted a cautious policy of shutting off power on the cusp of wind events that could conceivably down power lines and start fires. In some places the outages have caused homeowners to buy batteries. A Tesla 3 Powerwall battery system costs $13,000 to $18,000 before rebates, according to PowerOutage.com.

In addition, Xcel was authorized by Colorado regulators in June to spend up to $1.9 billion in preventative work in the field around transmission lines by 2027. The money will be devoted to undergrounding about 50 miles of power lines, rebuilding major transmission lines, and battery energy system rebates for critical facilities and customers in high-risk zones. See more here.

How much money is appropriate for this mitigation of wildfire risks? Polis said some controls are necessary, because fire mitigation is like a cash pit. By that, presumably he meant that unlimited amounts of money could be spent.

The calculus for determining how much utilities should be allowed to spend, he said, involves the cost of insurance to homeowners. “You should only really approve what you can document that will be saved in homeowners insurance for residents.”

If a $1 billion investment in mitigation saves $1.4 billion in insurance for homeowners, go for it, said Polis. Even $3 billion or $4 billion – as long as it results in greater savings in insurance premiums of the utility’s customers than the amount invested.

That, however, leaves open the question of whether the costs of wildlife mitigation should be borne by all ratepayers. Should somebody in a dense inner-city neighborhood pay for wildfire mitigation caused by somebody living amid the rustling pines? Of course, most victims of the Marshall Fire lived somewhat distant from what we traditionally thought of as high-risk wildfire areas.

As for Xcel’s public power shutoffs in Boulder, Jefferson and nearby counties, Polis called them “ridiculous.”

“There’s no evidence that utilities even caused a fire,” he said. “It’s like defensive medicine. There’s nothing worse than defensive medicine. They over-test you, over-treat you to avoid liability. That’s what some of our utilities are doing these days. They’re practicing defensive electrical practices. And you know what you can do to reduce your risk is to turn off the power for everybody all the time. Because guess what, they’re not liable for that and the damage that causes.”

That policy, he went on to say, could cause homeowners or homeowners associations to invest on energy storage, which is then passed on to its members.

In his closing comments, Polis said that everything involving energy inconveniences somebody. That’s true of coal plants. It’s true of solar. It’s true of transmission lines. Yet everybody wants the advantages of electricity on demand.