DENVER -- The Colorado Public Utilities Commission will hold a hearing on whether the city of Boulder can serve customers in unincorporated Boulder County -- over the objections of Xcel Energy -- if the city creates a municipal electric utility.
The commissioners agreed Wednesday that the issue deserves to be aired, with arguments made on both sides.
Boulder officials have said that, if the city creates a municipal utility, it would take possession of two Xcel substations that serve city and county customers, though it would not pursue annexation or condemn any non-Xcel property.
Roughly 5,800 county energy customers -- a figure that Xcel says represents about 11,000 residents -- would be affected by the change.
Those county residents were not eligible to vote in the November 2011 election that authorized Boulder to explore the creation of a city-run utility.
A group is trying to put a charter amendment on this year's ballot that would require those county residents be allowed to vote in a future debt-limit election if they are to be served. Some county residents have rallied around the idea of a vote, while others are lobbying to be included in the city utility.
Boulder officials say owning that part of the distribution system would make it easier to sever the system from Xcel's broader network and improve the reliability of a future city utility.
Colorado law says there can be only one utility in a given geographic area. Xcel Energy contends that because Xcel already has been assigned those territories, which are mostly in the Gunbarrel area and in county enclaves in north Boulder, the city cannot take them for its own service area.
Xcel said its certificate to serve those areas cannot be taken away without due process, including a hearing before the PUC and a finding that Xcel is unwilling or unable to serve those customers.
In a Monday filing, Xcel's attorneys asked that the commission hear the issue of whether the 5,800 county customers "will automatically become customers of a Boulder municipal utility if Boulder proceeds with any one of its five municipalization plans."
The commission set a 14-day period for Boulder and other interested parties to file objections and a seven-day period for Xcel to respond. A hearing date will be set after that comment period.
The city has contended that the PUC does not have jurisdiction. City officials point to provisions of the state constitution that give home-rule cities the authority to condemn property and create utilities inside and outside their boundaries.
The commissioners said Wednesday that they thought it was appropriate to rule on the matter after hearing arguments.
Commissioner Joshua Epel said Boulder's objection at this stage was "premature."
"I think it's important that it be taken up," Commissioner Pam Patton said.
Xcel Energy spokeswoman Michelle Aguayo said the company was pleased with the outcome of the meeting.
City officials said they are prepared to make their case before the PUC.
"City staff attended this morning's discussion and respects the commission's decision to open a docket on this matter," city spokeswoman Sarah Huntley said in an email. "Boulder welcomes the opportunity to fully discuss these issues with the PUC."