Boulder suffered a setback in its municipalization push Wednesday when a judge rejected the city’s appeal of a Colorado Public Utilities Commission ruling that the city should first present its plans to that body before filing for condemnation of Xcel Energy’s local assets.
In a , Boulder District Judge Judith LaBuda affirmed the PUC decision and said Boulder should seek approval before attempting to acquire assets outside city limits.
“The city’s constitutional right to eminent domain over property outside of its territory does not extend to serving those outside the municipality,” LaBuda wrote. “The city’s constitutional right is not unfettered because the PUC has constitutional authority to regulate public utilities for those outside the municipality.”
Officials with the city, Xcel and the PUC could not be reached for comment by deadline.
In 2013, the PUC ruled that because Boulder’s plans include acquiring Xcel’s electric infrastructure outside city limits and have potential impacts on regional reliability, the city needs its approval before filing for condemnation.
Boulder appealed that decision in May and filed for condemnation in July without waiting for a ruling in the appeal.
The city’s attorneys argued that Boulder’s right as a home-rule city to condemn property, inside and outside city limits, was unambiguous. Xcel consistently has argued that the condemnation filing is premature.
Boulder’s condemnation filing included a high-voltage transmission line, substations and distribution infrastructure in the Gunbarrel area outside city limits.
The PUC, in its defense, argued that its authority to regulate utilities also derives from the constitution and that the commissioners have broad discretion in how to exercise that authority.
LaBuda found that the PUC has authority over the municipalization process once Boulder reaches outside city limits.
“It is necessary for the PUC to determine which entity will be providing service outside of the city and to then determine how to best allocate the property to accomplish service to the extraterritorial customers and the statewide power grid,” she wrote.
Wednesday’s ruling is likely to delay the condemnation case. It is the second recent decision to go against the city.
Last month, the Federal Energy Regulatory Commission found that Boulder needs its approval to take possession of the high-voltage transmission line, although the FERC process could run concurrent with the local condemnation case.
