PUC accepts Boulder’s municipalization application, starting clock on decision

BOULDER — The Colorado Public Utilities Commission on Thursday afternoon mailed out a written decision deeming complete the city of Boulder’s amended application to create a municipal electric utility.

The PUC had informally deemed the application complete at its Nov. 9 meeting. But the written filing officially starts the clock ticking on the timeframe by which the PUC is required by law to render a decision whether to approve or deny Boulder’s application.

The Thursday filing is largely procedural, but “obviously it’s good news because that means the commission is ready to consider the merits of our application,” city of Boulder spokeswoman Sarah Huntley said Friday.

Boulder has been working for years on splitting off from Xcel Energy as the city’s electricity provider and creating its own utility. The city plans to acquire the Xcel assets necessary for running that utility through the power of eminent domain. But before the city can file for a condemnation proceeding in Boulder County District Court that would determine the price Boulder must pay Xcel, the city first must gain approval of its separation plan from the PUC to ensure safety and reliability of service amid the split.

The city first filed its PUC application in July of last year, but the PUC struck down a portion of that proposal and also noted that the city’s technical and engineering analysis was insufficient for the commissioners to rule on the application. The city was, however, given the opportunity to return with a revised application rather than starting the whole process over.

The city filed its revised application in September of this year with more detailed plans about how Boulder intends to separate its system from Xcel’s.

The PUC essentially now has 210 days from Thursday to rule on the application. But the PUC can extend that time window to as many as 300 days so long as the city is granted a hearing to make a case why no such extension should be granted.

The 210-day window expires June 15, 2017. City of Boulder officials in recent weeks had made a request to the PUC offering to waive the city’s right to an extension hearing as long as the PUC promised a ruling by Aug. 7. The PUC, as part of its acceptance of the Boulder supplemental application, has denied that request. In doing so, the PUC said it acknowledges Boulder’s preferred deadline of Aug. 7, 2017, but that if Boulder chooses to waive its right to a hearing about a timeline extension, the PUC makes no promises about a hard decision date.

Boulder’s currently proposed procedural schedule for its case does not allow time for a decision within the 210-day timeframe, the commissioners wrote. That leaves the city two options with regard to timing. Boulder can either waive the right to a timeline-extension hearing and hope for the best as far as a decision by Aug. 7, or the city could work with Xcel and other parties to the case to file a revised proposed procedural schedule no later than Dec. 6 that would allow the PUC time to render a decision within the 210-day window.

The Aug. 7 deadline is important to the city as it relates to its condemnation proceeding, which is expected to last well into 2018. The city’s municipalization efforts so far have been funded primarily by a voter-approved utility occupation tax. That tax expires at the end of 2017. If the city wants to ask voters for an extension of the tax to help fund the condemnation proceedings into 2018, it would have to place an issue on the ballot by the end of August. If the PUC denies Boulder’s separation application, the issue likely becomes a moot point because the city couldn’t file for condemnation anyway. But if the PUC were to approve Boulder’s application and do so past Aug. 7, there’s no guarantee that the city could get a measure placed on the ballot in time for the November election.

In addition to utility occupation tax extension measures, there could be ballot measures related to a possible settlement with Xcel or some yet-to-be determined citizen-initiated ballot measures related to the city’s municipalization efforts.

“We want to make sure we’re in a position to give voters as much information as we possibly can,” Huntley said of the timeline for a PUC decision.

Huntley noted that the city wouldn’t necessarily need an extension of the utility occupation tax to fund condemnation proceedings that spill over into 2018. She said city staff will assess over the next several months what alternative funding mechanisms might be available to support those efforts and whether such a UOT-extension ballot measure is necessary.

“That’s one of the things we’re analyzing,” she said.

The city, of course, is also still in negotiations with Xcel on a settlement that would see Boulder drop its municipalization plans and keep Xcel as the electricity provider for the city’s residents and businesses. Boulder’s motives in creating a municipal utility have been to supply the city with electricity sourced from a greater mix of renewable energy faster and less expensively than it contends Xcel can do. But Xcel officials have argued all along that the city could better achieve its renewable-energy goals by sticking with the company.

“I would characterize the negotiations as ongoing, with good intentions by both sides,” Huntley said.

As part of the PUC’s written decision Thursday, the governing body also required that the city of Boulder mail notice to potential customers of a city-run utility by Dec. 9 that the PUC is now evaluating the city’s amended application. Parties wishing to intervene in the case have until Dec. 30 to do so with the PUC.


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