FERC: Boulder needs federal OK to condemn Xcel assets

The Federal Energy Regulatory Commission ruled Thursday that the city of Boulder cannot condemn Xcel Energy Inc.’s assets through eminent domain without the commission’s approval.

The ruling follows a petition filed by Xcel (NYSE: XEL) asking FERC to rule that the city of Boulder cannot condemn the transmission facilities it seeks without federal approval. The filing came on the heels of a petition filed July 17 by the city in Boulder County District Court to condemn Xcel’s assets through eminent domain. Xcel has requested that the court dismiss the condemnation case.

Both Boulder and Xcel claimed victory from Thursday’s FERC ruling. The federal commission, however, ultimately granted Xcel’s petition in its order.

SPONSORED CONTENT

Empowering communities

Rocky Mountain Health Plans (RMHP), part of the UnitedHealthcare family, has pledged its commitment to uplift these communities through substantial investments in organizations addressing the distinct needs of our communities.

“A transfer of a jurisdictional transmission line by condemnation would require commission approval,” the FERC ruling stated.

Boulder has proposed taking Xcel’s assets in the city and in Boulder County, including 32 miles of transmission lines and all or part of nine substations, to form a municipal electric utility. Xcel contends the federal commission maintains jurisdiction over the transfer of such assets under the Federal Power Act, which says federal approval must occur for transfer of more than $10 million in assets.

“As we have stated in the past, there is a process to be followed that includes recognizing the important role both the CPUC and FERC play in maintaining the reliability of the grid,” wrote Xcel spokeswoman Michelle Aguayo in an email, “and these commissions must be allowed to see the city’s plans and make rulings prior to the city trying to condemn our business.”

The city said the ruling defined the role the federal commission would play in the city’s efforts to acquire Xcel’s assets.

The federal commission would have to evaluate whether the acquisition was in the public interest and that the review must occur before an actual transfer of assets. The regulators disagreed, however, with the position taken by state regulators and Xcel Energy that the city cannot proceed with its condemnation case until the review takes place, the city said.

“FERC has stated what the city has known for some time – that federal regulators have a valuable oversight role with regard to ensuring the smooth and equitable transmission of electricity,” Boulder City Attorney Tom Carr said in a statement. “Today’s order spells out a clear process for what this review should include. We look forward to participating fully in that process.

“At the same time, the ruling affirms that the city has the right to seek to acquire Xcel’s assets and that the district court, not regulators, should decide that matter,” Carr added. “This is a clear victory in that regard.”

Boulder wants to create its own utility to generate more electricity from renewable energy, while reducing greenhouse-gas emissions that have been linked to climate change. Xcel wants to keep its assets, contending it can help Boulder reach its clean-energy goals faster and more economically than the city can do by itself.

“We remain steadfast in our goals of carbon reduction and the use of renewable energy, which align with Boulder’s stated environmental goals,” Aguayo said.”By working together, we can provide customer choices that take advantage of our mutual strengths.”

FERC added in its 14-page ruling that its authority would not override that of the Colorado Public Utilities Commission.

Terry Bote, spokesman for the Public Utilities Commission, said the FERC ruling remained consistent with the PUC’s position and decisions. The PUC has ruled that the city lacks the authority to determine which parts of Xcel’s assets it can acquire.