Community

Boulder increases offer in municipalization effort

Boulder, Colo., is offering Xcel Energy $82 million for the investor-owned utility company’s electric distribution assets in the city as part of a nearly decade long effort to form a public power utility.

The final offer is a nearly 20 percent increase over an offer made in April, a bump designed to avoid the expense of delay and condemnation litigation, according to a June 12 letter the city sent Public Service Co. of Colorado, an Xcel utility.

The letter outlines the specific assets Boulder intends to buy from its utility, partly as a way to get all its electricity from renewable sources by 2030. Boulder — a city of about 108,000 — estimates it can get 89 percent of its electricity from renewable sources by 2024 at an affordable cost, according to an analysis prepared for the city in January.

While the acquisition talks are going on, PSCo and Boulder staff are working together on several issues related to the planned purchase, according to the letter.

The issues include preparing a facility study agreement and detailed engineering design, technical and engineering issues related to separating Boulder from PSCo’s system, and other municipalization matters, according to the letter.

Boulder asked PSCo to respond to the offer by June 26. If the utility doesn’t respond, Boulder said it will file a condemnation order with a district court.

Boulder also made filings last week at the Colorado Public Utilities Commission, which is reviewing the planned transaction.

In one filing, Boulder addressed several outstanding issues that need to be resolved. The city expects to file this month a final list of assets inside of and outside of substations that are eligible to be transferred to a municipal utility.

Boulder also plans to share this month with parties to the case various agreements and draft agreements related to the transfer of assets.

“These agreements are intended to ensure that the existing facilities within the substations can be transferred, and the existing and new facilities can be designed, constructed, and operated in a manner that ensures safe, reliable, and effective service to customers both within the city, and to those customers PSCo will continue to serve,” Boulder said.

In a separate filing, Boulder responded to two pleadings PSCo made in January.

The PUC should reject PSCo’s request that the commission prevent Boulder from starting condemnation proceedings until after the city applies for permission to transfer substation assets and the PUC approves it, according to the city’s filing.

The PUC addressed the transfer of assets in a 2017 decision and the condemnation process needs to start ahead of a planned 2020 vote by city residents on whether to move forward with forming a public power utility, Boulder said. No assets will be transferred until a cut-over expected in 2023 or 2024, giving the PUC plenty of time to make a final decision on asset transfers, according to the city.

Boulder asked the PUC to hold oral arguments to resolve the disputes between the city and PSCo so the municipalization efforts can move ahead.

Colorado has 29 public power utilities.

Boulder City Council dissolves utility formed in 2014

Meanwhile, the Boulder Daily Camera reported on June 18 that the Boulder City Council passed an ordinance to dissolve the utility the council created on paper in 2014 in the city’s pursuit of a public power electric utility.

The city council action does not affect Boulder’s $82 million offer to Xcel Energy for the investor-owned utility company’s electric distribution assets in the city.

The Boulder Daily Camera noted the move is part of a settlement agreement with Xcel in the company’s 2014 lawsuit against the city.

In May, Boulder and Xcel Energy reached a settlement related to the city’s municipalization efforts.

The city agreed to repeal the 2014 ordinance (7969) that created a municipal utility but that was never used. The settlement does not affect the city’s plan to break away Xcel or to put its municipalization efforts before voters, which could occur in 2020 or 2021.

For its part, Xcel agreed not to assert the lack of existence of the utility in the city’s ordinances as a direct defense in the possible condemnation proceeding brought by the city.

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