The Municipalization Saga Continues

The Municipalization Saga Continues

By Rudy Verner and Taylor Mangan

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On June 18, the Colorado Supreme Court ruled Xcel Energy’s challenge to Boulder’s efforts to create a municipal electric utility may proceed. 

Boulder’s effort to create a city-owned and –operated electric utility (a.k.a. municipalization) led to the city’s adoption in 2014 of the so called “utility ordinance”. That ordinance authorized City Council to establish a public power utility, provided the City could demonstrate that the utility could (1) acquire the electrical distribution system in Boulder; (2) charge rates that do not exceed the rates charged by Xcel at the time of acquisition; (3) produce revenues sufficient to operate the utility and make debt payments; (4) produce energy with reliability comparable to Xcel; and (5) create a plan for reduced greenhouse gas emissions and other pollutants and increased renewable energy.  

After City Council voted that the City had met these requirements, Excel filed suit claiming that the council’s vote was premature and that Boulder had not sufficiently demonstrated it could meet the stated criteria.

In June 2015, Boulder District Judge Judith LaBuda dismissed Xcel’s claim, finding that the city was within its rights to create the utility. On appeal, however, Xcel succeeded in convincing the appellate court to reverse Judge LaBuda’s ruling and allow its suit to continue, which led to Boulder filing a petition for certiorari with the Colorado Supreme Court.

On Tuesday, the Supreme Court agreed with Boulder’s argument that the Court of Appeals’ ruling was erroneous, but also concluded that Xcel had stated a viable declaratory judgment claim, and remanded the case to the district court for further proceedings.