Boulder offers PUC alternatives for municipal utility

BOULDER — Responding to a state finding in August that its application to form a municipal electric utility was “incomplete,” the city of Boulder has offered a series of alternative ways it could carry out its voter-approved mandate to take over the service from Xcel Energy.

In an amended application filed Wednesday with the state Public Utilities Commission, Boulder offered several options for the transition other than simply seizing Xcel’s assets. It offered to build additional facilities of its own if needed, negotiate over who owns a line based on the number of customers it serves, and modify “the location and number of points of separation” between the city’s and Xcel’s systems.

Responding to the PUC staff’s recommendation that Boulder’s application be dismissed, the city wrote that its initial plan was “based on the information that Boulder has available to it, prior to the city’s ability to conduct discovery in this proceeding related to the formation and/or operation of a municipal electric distribution system in the city.”

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Boulder, the city’s response said, also recognizes that “there are a host of alternative arrangements that may be offered by intervenors for the Commission’s consideration during the course of the proceeding.”

If the PUC approves Boulder’s amended application, the city wrote, “the city will conduct discovery of (Xcel Energy) that would enable the city to flesh out and analyze potential alternatives to the Plan.” The city’s ability to assess those alternatives and present options for PUC consideration depends on Xcel’s cooperation, it wrote. The analysis — which the city wrote should take no longer than two months — would be followed by a second supplement to the application.

Boulder voters first approved forming the municipal utility in a 2011 ballot issue, and reaffirmed their intent in a 2013 election.

The city last year filed a condemnation case in Boulder District Court to acquire all of the Xcel equipment both inside and outside city limits that would be needed to create the city utility. Even though the city wasn’t seeking to acquire any customers of Xcel (NYSE: XEL) outside city limits, the court ruled that the PUC retained jurisdiction over Boulder’s plans because some of the equipment being acquired ultimately serves some of those county residents.

In June, a Boulder District Court judge upheld Boulder’s intent to create the electric utility, dismissing Xcel’s claim that the council’s decision was unlawful. In July, Boulder asked the PUC to approve its plan in an application that included which assets the city would acquire and a plan for interconnection with Xcel’s system. Xcel filed its motion to dismiss in August, arguing that Boulder’s application failed to comply with past PUC orders. Later that month, PUC staff’ recommended that Boulder’s application be dismissed, focusing largely on Xcel’s argument that Boulder’s proposed arrangement in which Xcel would “wheel” power over the city’s lines to serve Xcel customers within the city’s acquisition area was in violation of the doctrine of regulated monopoly.

In its amended application Wednesday, the city proposed an arrangement that would have “the utility with the majority of customers on an individual feeder line owning that feeder and allowing the other utility to wheel power over that feeder to serve its customers.”

On Thursday, Xcel spokeswoman Michelle Aguayo said the utility would not issue a formal response until the PUC makes its final ruling.