The state's Public Utilities Commission will not contest $44.5 million in costs associated with Xcel Energy's SmartGridCity project in Boulder, according to a recent settlement.

The agreement among the Governor's Energy Office, the PUC and Xcel Energy was a victory for the state's largest utility, which argued that the costs so far of improving power distribution and metering systems were in the interests of all ratepayers.

At issue was whether ratepayers or shareholders should foot costs of the Boulder-based pilot project, which had tripled in price from initial estimates.

The PUC already had approved the costs as part of broad rate increases that went into effect Jan. 1 but had opened a separate case to consider getting back the money. Friday marked an end to that challenge.

"This cap would not apply to any expansions of the SmartGridCity project beyond how it is currently set out," said the settlement, reached Friday.

Three other intervenors in the case, the Office of Consumer Counsel, ArapaHOPE Community Team and citizen intervenor Leslie Glustrom, still will contest the rate increases at a hearing scheduled for 1 p.m. Tuesday at the PUC office.

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