United Power sues Colorado city for breach of contract

BRIGHTON — United Power Inc., a not-for-profit electricity provider based in Brighton, is suing the town of Frederick.

The lawsuit, filed in Weld County District Court, alleges that Frederick breached a 2014 agreement it made with United Power, particularly in regards to a new major customer.

United Power has been contracted by Frederick to provide power to homes and businesses within the municipal boundary, the lawsuit says. However, Frederick also owns a utility and distributes electricity. In 2014, the two entered a wholesale power-service agreement, effective through the end of 2021.

The lawsuit says that according to that agreement, United Power would offer wholesale electric service to Frederick within the town’s electric-distribution system, and in turn United Power would get to serve areas within the municipality but outside the electric system. The lawsuit says that, per the agreement, customers outside of the electric boundary “are now and will always be those of United Power unless specifically agreed to in writing.”

But now, United Power alleges that Frederick is breaking state law and “has deliberately disrespected and dishonored” the agreement, largely in relation to one customer. 

That customer is Agilent Technologies Inc., which in August 2016 announced it would be building a pharmaceutical manufacturing facility in Frederick, that would be 130,000 square feet and employ between 150 to 200 workers. The lawsuit says that the Agilent site is outside of Frederick’s electric system and is inside United Power’s Certified Territory — but Frederick used the promise of provide electric service to Agilent as a bargaining chip to bring the company to the area.

“Frederick did not give United Power notice of its discussions with Agilent, allow any competitive bid process, or cooperate with United Power to serve the Agilent site,” the complaint says. “These facts are just some facts demonstrating that Frederick’s actions have been and are predatory, not competitive.”

For their part, Frederick disagrees with United Power’s claims and that the town doesn’t believe they are in violation of state law. 

“Per state statute, we can compete for new electric customers within our territory,” said Town Manager Matt LeCerf, “and that’s the incorporated limits of the town of Frederick.”

 

United Power went on to say that Frederick expanded its distribution system to be able to serve Agilent, which has caused United Power to operate below capacity, and that it believes Frederick will continue to breach the agreement — Frederick built electrical facilities adjacent to United Power’s.

United Power is now seeking damages, said Marketing and Communication Coordinator Heidi Storz, although it is asking the court to determine the damage amount.

 


 

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