Colorado Court of Appeals:  Municipalization Controversy Is Not Yet Reviewable

Colorado Court of Appeals: Municipalization Controversy Is Not Yet Reviewable

Yesterday, the Colorado Court of Appeals issued the latest decision in the ongoing controversy between Xcel and the City of Boulder over the municipalization of the City’s light and power utilities. The Court of Appeals ruled that the controversy is not yet ripe for court review because although the Boulder City Council has passed ordinances accepting a report that certain preconditions to municipalization had been met and stating an intention “to establish” a new utility, there remain significant unresolved issues as to the financial viability and reliability of the utility and the City has continued to engage in supplemental modeling. For these reasons, the Court of Appeals concluded that the City ordinances are not final actions and so the District Court lacked jurisdiction to hear or rule on the controversy.

In November of 2011, City voters approved an amendment to the Boulder Home Rule Charter authorizing the creation of a new light and power utility so long as the new utility could “acquire the electrical distribution system in Boulder and charge rates that do not exceed those rates charged by Xcel Energy at the time of acquisition.” The amendment included specific requirements meant to ensure that the new utility would both be financially competitive and include efforts toward reducing greenhouse gases and increasing the use of renewable energy. On August 20, 2013, the Boulder City Council passed Ordinance 7917 (“First Ordinance”), which accepted a third-party evaluator’s report that the financial and other conditions required under the amendment had been satisfied. On May 6, 2014, the Boulder City Council passed Ordinance 7969 (“Second Ordinance”), which stated an intention “to establish the light and power utility.” On June 3, 2014, Xcel filed a complaint in Boulder County District Court seeking court review of Ordinance 7969, claiming that the City exceeded its authority when it created the utility.

In the District Court, the City argued that Xcel’s complaint, though nominally objecting to the Second Ordinance, actually addressed substantive matters contained in the First Ordinance. Therefore, the City argued, Xcel’s claims were time-barred because, under Colorado Rule of Civil Procedure 106, any complaint against the First Ordinance would have to have been brought within twenty-eight days of the action. The District Court agreed with the City and, on June 25, 2015, granted the City’s motion to dismiss. 

On September 22, 2016, the Court of Appeals went a step further than had the District Court. The Court of Appeals explained that neither Ordinance was a “final decision” of the City Council as contemplated in Rule 106, and so the District Court lacked jurisdiction in the first instance to rule on the merits of Xcel’s Rule 106 arguments. The Court explained that Xcel’s challenge even to the Second Ordinance was premature, since the Second Ordinance “direct[s] further refinement of the plans and defer[s] creation of the utility for later legislative action.” ¶14. The Court pointed out, further, that “uncertainty lingers since Boulder has continued supplemental modeling concerning the utility’s feasibility after the passage of the First Ordinance [and t]here remain significant unresolved issues as to the financial viability and reliability of the utility.” ¶15.  Because the Second Ordinance relies on findings from the First Ordinance, according to the Court, the “Second Ordinance lacks finality.” 

For these reasons, according to the Court of Appeals, the District Court erred in dismissing the complaint pursuant to Rule 106 because such a ruling assumed that the claims were ripe for review. Instead, because both Ordinances were non-final actions, Xcel’s complaint was premature and the District Court lacked jurisdiction to order any relief. 

Thus, Xcel, the City, and its residents will have to wait until a later day—when the controversy is more demonstrably “final”—to obtain judicial review. The parties have until November 5, 2016 to request the Supreme Court’s review of the Court of Appeals’ decision. 

The Court of Appeals’ decision can be accessed here: Public Service Company of Colorado (Xcel) v. City of Boulder

 

This article is intended to provide general information and, therefore, should not be treated as legal advice. If you have questions about a specific legal issue, you should seek the advice of a qualified attorney.

Author: Carrie C. Doyle 

Editor: Rudy E. Verner