Colorado’s largest electric utility announced Wednesday that it had agreed to settle a lawsuit over its alleged role in the most destructive wildfire in state history.

Xcel Energy’s announcement of the $640 million settlement came one day before the start of a civil trial in Boulder County District Court, where thousands of homeowners, businesses and insurers impacted by the 2021 Marshall Fire had filed a lawsuit seeking damages from Xcel and two telecommunications companies.

The Marshall Fire killed two people and destroyed nearly 1,100 homes and businesses in Louisville, Superior and unincorporated areas of Boulder County after igniting on Dec 30, 2021. Fueled by dry conditions and high winds, the fire’s destructive path through densely populated suburban neighborhoods in midwinter put a spotlight on heightened wildfire risks brought on by climate change.

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Investigators with the Boulder County Sheriff’s Office later determined that the fire had been caused by two different ignition points located roughly half a mile apart: a burning debris pile on a property owned by the Twelve Tribes religious group, and an unmoored Xcel Energy power line. The two fires quickly merged together, and the combined blaze grew to over 6,000 acres in size. No criminal charges were filed in connection with either ignition source.

In an investor filing Tuesday, Xcel said that it “did not admit any fault, wrongdoing or negligence in connection with these settlement agreements.”

For some, the trauma and financial losses remain incredibly difficult. It is our hope that any settlement will allow all those impacted to continue to recover and rebuild.

“Despite our conviction that (Xcel) equipment did not cause the Marshall Fire or plaintiffs’ damages, we have always been open to a resolution that properly accounts for the strong defenses we have to these claims,” Xcel CEO Bob Frenzel said in a press release.

“We recognize that the fire and its aftermath have been difficult and painful for many, and we hope that our and the telecom defendants’ contributions in today’s settlement can bring some closure for the community,” Frenzel added.

More than half of the settlement amount will come from Xcel’s insurance coverage, the company said, and ratepayers will not be forced to cover any of the remaining cost.

Total damages from the fire were estimated at over $2 billion.

“Thousands of people suffered devastating losses from the Marshall Fire,” Boulder County District Attorney Michael Dougherty said in a statement. “For some, the trauma and financial losses remain incredibly difficult. It is our hope that any settlement will allow all those impacted to continue to recover and rebuild.”