Boulder's municipal utility
As Boulder moves toward municipalization, its attorneys have insisted that the city has a right derived from the state constitution to file for condemnation without approval from the Colorado Public Utilities Commission.
And, as they demonstrated Thursday, Boulder officials weren't going to wait for the PUC to rule on that matter after it was raised by Xcel Energy.
Boulder officials have said they do not want the legal process — including a lawsuit brought by Xcel seeking to undo the vote creating the city's utility — to drag out any more than necessary.
The tax that is funding Boulder's municipalization effort expires in 2017.
Darrell Waas, a Denver-based attorney who does eminent domain work, said he is not an expert on the PUC, but he would be surprised if the commission can stop Boulder from condemning Xcel's assets — even those outside the city limits.
"The eminent domain powers of a city like Boulder are very powerful and they derive from the constitution," he said. "I would be very surprised if they (the PUC) can stop a condemnation from going forward."
Most eminent domain cases involve property, not an operating business, but Waas said there is precedent. For example, the Regional Transportation District was formed from a number of private bus companies in the 1960s.
'The PUC has significant expertise'
But Richard Collins, a University of Colorado law professor, said the PUC has expertise that a district court judge may decide to defer to.
"The PUC claims seem mostly focused on customers outside the city," he said. "I have read through the precedents and they seem to strongly favor the PUC, which leads me to question why Boulder is fighting this so strongly.
"Because someone has to make this decision about how you divide the facilities, and Boulder cannot do it unilaterally," he added. "Boulder is saying the judge should make it, but the PUC has significant expertise that a judge is not going to have."
Tim Flanagan, an attorney who has represented Xcel in the past and lost a bid to represent the city, said Boulder is taking a big risk by filing for condemnation before resolving its issues with the PUC.
Because there has not been a municipal condemnation since the early 20th century, there are no good precedents, and even experienced lawyers can only guess at the outcome, he said.
"You can act like the smartest guy in the world, but you don't have any similar situations," Flanagan said. "And if you lose, you have to start all over."
'This is the process'
Boulder Mayor Matt Appelbaum said the city recognizes the PUC's jurisdiction over issues related to separating the two systems and ensuring a smooth transition.
However, Boulder is asking a judge to uphold its constitutional authority to condemn property even outside city limits.
"We can try to work it out beforehand, but this is the process," he said. "Courts exist to settle issues where parties disagree. At a certain point you have to move ahead with the process. We've done all the due diligence we can do. We have tried many times to negotiate with Xcel. We have tried to work with the PUC. Some of those have not been as successful as we would like.
"We can keep doing that forever, or we can move forward with what our voters have asked us to do and approved limited funds to accomplish. I think the timing is quite reasonable."
Xcel spokeswoman Michelle Aguayo said the utility believes the PUC decision is the law of the land until a judge rules otherwise, and it was inappropriate for Boulder to file for condemnation.
She noted that the PUC decision involved both the rights of county customers and significant questions of regional reliability after Boulder separates from the network.
On Thursday, PUC spokesman Terry Bote said the commission's attorneys would review Boulder's condemnation filing and determine the appropriate response.