Boulder appeals PUC’s ruling

BOULDER – The city of Boulder wants the state Public Utilities Commission to reconsider a ruling it made Oct. 29 regarding electric-utility municipalization. The city argues that the ruling was over-reaching.

In an appeal made to the PUC on Nov. 18, the city took issue with two portions of the ruling – that the PUC has the authority to determine what facilities Boulder may acquire by condemnation from Xcel Energy Inc. in the city’s quest to form a municipal electric utility, and that such a determination by the PUC must be made before Boulder could initiate condemnation action.

“Boulder has no objection to, and in fact is eager to work with, commission staff to prepare the various plans necessary to make Boulder’s acquisition of the (Xcel) system that serves Boulder as cost-effective as possible and to ensure that the electric system, both inside and outside Boulder, is at least as safe and reliable as the current (Xcel) system,” Boulder senior assistant city attorney Debra Kalish wrote in the city’s filing. “However, Boulder has the constitutional and statutory right to determine which assets it will acquire and the timing of any condemnation action that may be filed.”

PUC spokeswoman Becky Quintana said PUC commissioners are scheduled to issue an oral decision at their Dec. 11 meeting. The commission has until Dec. 18 to issue a written decision.

Quintana said commissioners generally would deny or uphold an appeal such as Boulder’s at the Dec. 11 meeting based on the information they have. However, she said it is possible that the commissioners could request further written arguments from the involved parties or schedule an oral hearing for the parties to state their cases. In that case, she said, a final decision from the PUC would likely be pushed beyond Dec. 18.

Quintana added that Xcel would not be allowed to reply to Boulder’s filing without first filing a motion with the PUC seeking permission to do so.

Xcel in May filed a request with the PUC for five declaratory orders regarding Boulder’s proposed plans to serve customers outside its city limits as part of its municipalization efforts. The PUC affirmed three of those requests, but for the other two it issued its own decision instead that included asserting its authority over what equipment Boulder could condemn and the timing of such actions.

Xcel spokeswoman Michelle Aguayo said the company’s main motivation in filing the request for declaratory orders was that it wanted clarification on who was deciding what as it related to service of customers in unincorporated Boulder County who are caught in the middle of the potential municipalization efforts by Boulder. She said Xcel officials feel they got that determination from the PUC ruling.

“It’s not a surprise to us,” Aguayo said of Boulder’s appeal. “As we had mentioned when the original ruling had come out, we agree with the PUC on its ruling.”

In its Nov. 18 filing, the city argued that Xcel had acknowledged in its request for declaratory orders that the question of what facilities Boulder has the legal authority to acquire was an issue to be determined in condemnation court. Boulder argued that the state constitution and legal precedent in Colorado affirm the right of home-rule cities to condemn electric facilities and to decide what facilities to acquire.

Boulder argued that the “proper order of proceedings is the city’s initial filing of the eminent-domain proceeding in district court, followed by its filing of appropriate applications with the commission to address issues affecting out-of-city customers.”

The city states that it does not intend to seek immediate possession of Xcel’s assets upon filing for condemnation but rather would wait until the completion of eminent domain proceedings to acquire possession. Because an eminent domain case could take 18 months to two years to complete, the city argued that there will be plenty of time for it and Xcel to work with the PUC to ensure that electric customers outside Boulder’s city limits are ensured safe and reliable service upon the separation of Boulder from Xcel’s system.

Boulder states that through the discovery and disclosure stages of a condemnation proceeding it would be able to use information from that process to “refine the scope of the taking.”

“By requiring that the commission proceedings ‘are to be completed before Boulder initiates a condemnation action,’ the commission’s decision denies Boulder its right to take discovery in the eminent-domain case,” Kalish wrote.

Aguayo said Xcel still is reviewing Boulder’s arguments, and hasn’t yet decided whether it will request from the PUC a chance to respond to the appeal.

“Once we take a look at (Boulder’s filing), we’ll make a decision on that point,” Aguayo said.

Boulder’s efforts to break away from Xcel and create its own municipal electric utility scored a victory Nov. 5 when voters rejected an Xcel-backed ballot measure and approved a competing one. Issue 2E passed with two-thirds of the vote, while Issue 310 was shot down by nearly 69 percent of voters.

Issue 2E sets a limit of $214 million on the amount the city is allowed to pay for the Xcel assets needed to set up its own utility, as well as stranded costs owed to Xcel to compensate for investments it had made in serving Boulder customers for some future period. Issue 310 would have required voter approval for any debt issued in relation to a municipal utility. It also would have required that any potential nonresident customers of the utility be allowed to vote in such elections and that those elections be held only in odd-numbered years at the time of general elections. The combination of terms is one that municipalization supporters argued would have killed the efforts to create the utility.

Issue 2E provides that customers of the new utility who live outside city limits will be allowed to serve on the utility’s advisory board. It facilitates utility choice on a neighborhood-by-neighborhood basis to nonresident customers. It requires nonresident customers to be treated the same as residents as it relates to rates, and limits brokerage fees associated with acquiring debt to purchase the utility.

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