Boulder's plan to condemn Xcel assets, form municipal utility faces new setback

Dive Brief:

A district court in Boulder, Colorado, has dismissed the city's condemnation filing, dealing another setback in its efforts to take over portions of Xcel Energy's electric grid to form a municipal utility.
The decision mirrors 2014 events when the same court dismissed another condemnation motion by Boulder for similar reasons. The court concluded it lacked jurisdiction and would need direction from the Colorado Public Utilities Commission.
The city of Boulder has been considering forming its own utility since 2011, and in 2020 will hold another go/no-go vote to determine if its efforts continue. Boulder officials believe they can still complete the PUC process.

Dive Insight:

Boulder is now almost a decade into its municipalization effort, and had hoped at this point the court and PUC proceedings could run concurrently. That won't happen, possibly putting the entire effort in jeopardy despite signs of optimism from officials.

"It was the city's position that this stage of the PUC process and condemnation could run concurrently, and the city is committed to completing the PUC process," Boulder Director of Climate Initiatives Steve Catanach said in a statement. "Dismissal of the city's petition was a risk the city identified."

In his ruling, however, Boulder District Court Judge Thomas Mulvahill said the court agreed with Xcel's reasoning.

The city "has again filed condemnation proceedings before the PUC has finally determined and approved how facilities should be assigned, divided, or jointly used to ensure the effectiveness, reliability, and safety of the separated systems and what assets Boulder may seek to acquire," Xcel wrote in its motion to dismiss. "Thus, whether analyzed through the lens of issue preclusion or on the underlying merits, this Court lacks subject matter jurisdiction and must dismiss this condemnation lawsuit."

"While the city believes that there is still a path forward, the city is now evaluating the impact of today's ruling on the project schedule, particularly the planned community go/no-go decision in 2020," Catanach said.

The municipalization effort did get good news, when on Wednesday the PUC determined that Boulder does not need to return to the commission with another application to seek approval to transfer assets inside substations.

Boulder and Xcel Energy have been working to resolve issues related to municipalization and condemnation, and utility officials say they will continue to work with the city. In May, the parties opted to settle a five-year-old lawsuit regarding the city's formation of an electric utility, which Xcel said was premature.

Boulder undertook its muni quest in part to develop more renewable resources. Xcel says it is now working on a plan to achieve 100% carbon-free electricity by 2050. Aguayo said that "aligns with Boulder's clean energy priorities, and we look forward to working with them, as we do all Colorado communities, to achieve their energy goals."

Correction: An earlier version of this story incorrectly attributed a quote from Xcel Energy. The utility responded to the city's condemnation proceeding in its motion to dismiss.