Editor’s note: This story has been updated to clarify the terms of the city’s offer.
Boulder on Friday announced a nearly $94 million offer to Xcel Energy to acquire the company’s electric utility assets, the city’s latest step in its effort to sever from the private power provider and form a municipal service.
The city in a news release claimed the amount is nearly double the original cost of the company’s assets, less depreciation. The city used Xcel reports for financial filings as the basis of its offer. The appraised value of those assets outside substations is $62.3 million, but the city used a separately reported value by the company, on which to base its offer.
The offer was made after an Oct. 28 Colorado Public Utilities Commission ruling approved the transfer to Boulder of Xcel assets outside substations, where electricity is converted from high voltage to low voltage for consumption.
“We’ve made an offer that we hope Xcel will seriously consider,” City Attorney Tom Carr stated in the release.
Boulder anticipates the acquisition process to form the municipal utility will continue through next year, and may involve a condemnation court proceeding, during which a price will be decided for the city to pay the utility for any assets it is unable to obtain through negotiations outside of court.
“We received the letter and are evaluating it,” Xcel spokesperson Michelle Aguayo said. “This is a complex process and it’s important for Xcel Energy to understand the information the city has shared. Our priority throughout this process is to ensure that we are protecting the best interest of all of our Colorado customers, including those in Boulder. We are on a path to achieve 100% carbon-free electricity by 2050, which aligns with Boulder’s clean energy priorities and we look forward to working with them to achieve that vision.”
If Xcel does not accept the city’s offer, Boulder will refile a condemnation action in Boulder District Court before the end of the year, the release stated.
The city expects a district court valuation trial would be held in nine to 15 months from the time of filing.
Boulder will not take ownership of the company’s assets or pay the cost determined by the court to do so unless voters approve moving forward with the municipal utility project once the acquisition cost and other variables are known, and unless construction of Boulder’s separate electric system is complete, the release stated. No issue has been placed on any ballot at this time.
The $94 million offer follows the city’s $68.5 million offer made earlier this year, and an ensuing final offer of $82 million.Xcel did not respond to either offer, leading Boulder to file a condemnation action in June, but the litigation was dismissed by the court because the state Public Utilities Commission had not yet signaled approval for the city to acquire company assets.
Boulder last month appealed the dismissal of the condemnation, and if the city files a new condemnation petition, the appeal will continue in parallel to the new litigation, the release stated.
Xcel last month also filed a motion in district court seeking repayment of $210,000 in attorney’s fees it was charged for filing an Aug. 5 motion to dismiss the city’s condemnation case.
The city responded to that motion this week.
“Under the law, Xcel is entitled to recover only the reasonable amount of attorney’s fees for filing the Motion to Dismiss,” the city’s release stated. “Xcel is not entitled to reimbursement for fees incurred in filing other documents or working with other parties to the case.”