011 PSCo's Motion to Dismiss for Lack of Subject Matter Jurisdiction 8.5.19
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DISTRICT COURT, BOULDER COUNTY, COLORADO
Court Address: 1777 6TH Street, Boulder
Colorado 80302
303-441-3750
_________________________________________________
Petitioner:
THE CITY OF BOULDER, a Colorado Home Rule City,
v.
Respondents:
PUBLIC SERVICE COMPANY OF COLORADO, a
Colorado Corporation, d/b/a XCEL ENERGY;
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK; and PAUL WEISSMANN, in his official capacity as
Treasurer of Boulder County.
_________________________________________________
Attorneys for Respondent, Public Service Company of
Colorado, a Colorado Corporation
John R. Sperber, Atty. Reg. No. 22073
Brandee L. Caswell, Atty. Reg. No. 30706
Matthew D. Clark, Atty. Reg. No. 44704
FAEGRE BAKER DANIELS LLP
1144 Fifteenth Street, Suite 3400
Denver, Colorado 80202
Telephone: (303) 607-3500
Fax: (303) 607-3600
Email: jack.sperber@FaegreBD.com
brandee.caswell@FaegreBD.com
matthew.clark@FaegreBD.com
COURT USE ONLY
__________________________
Case Number: 19 CV 30637
Division: 5
MOTION TO DISMISS FIRST AMENDED PETITION IN CONDEMNATION FOR
LACK OF SUBJECT MATTER JURISDICTION PURSUANT TO COLO. R. CIV. P.
12(b)(1)
I. CERTIFICATE OF CONFERRAL
Pursuant to C.R.C.P. 121(c), § 1-15(8), Public Service Company of Colorado (“PSCo” or
“Public Service”) certifies it conferred in good faith with counsel for the City of Boulder (the
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“City”), who stated that the City opposes this Motion.
II. INTRODUCTION
Public Service Company of Colorado (“PSCo”) is currently the retail electric and gas utility
for customers in the City, in Boulder County, and elsewhere in the State of Colorado. In this
condemnation action, the City seeks to condemn property in and around the City so as to “separate
the existing electrical distribution system serving customers in the vicinity of the City into two
separate distribution systems … one serving only customers within the City … and the other
serving customers of [PSCo], by reconfiguration of the existing equipment and the addition of new
facilities so that each system can be operated independently of the other in order to distribute
electricity to the respective retail customers of the City and [PSCo].” Am. Pet. ¶ 6.1 The property
the City seeks to acquire includes facilities, both inside and outside of substations, which are
currently also used to provide service to customers outside the city limits.
As this Court previously held, this monumental undertaking triggers the Colorado Public
Utilities Commission’s (the “PUC” or the “Commission”) exclusive jurisdiction to oversee the
safety, reliability, and effectiveness of the state-wide interconnected electrical distribution system
prior to a condemnation action being initiated:
The PUC has the authority to regulate public utilities and the facilities,
which provide service within the City of Boulder as well as unincorporated
Boulder. … [I]t is necessary and appropriate for the PUC to determine how
facilities should be assigned, divided, or jointly used to protect the system’s
effectiveness, reliability, and safety. Such a determination must be made
prior to the City’s condemnation of property for utility municipalization.
(emphasis added).
See January 14, 2015, Order Re: Judicial Review of the Colorado Public Utilities Commission
1 Cites to “Am. Pet.” refer to the City’s First Amended Petition in Condemnation.
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Decisions (Case No. 14CV30047) (LaBuda, J.) (hereinafter “Final Opinion”) (rejecting the City’s
appeal of two PUC decisions implicated by the present condemnation lawsuit).2 Accordingly,
shortly after issuing the Final Opinion, this Court dismissed a prior condemnation action the City
had filed seeking to acquire portions of PSCo’s electric distribution system without first
conducting proceedings before the PUC. See February 13, 2015 Order Re: Respondents’ …
Motion to Dismiss under C.R.C.P. 12(b)(1) for Lack of Subject Matter Jurisdiction (Case No.
2014CV30890) (LaBuda, J.) (hereinafter “Condemnation Dismissal”).3
Despite this, the City has again filed condemnation proceedings before the PUC has finally
determined and approved how facilities should be assigned, divided, or jointly used to ensure the
effectiveness, reliability, and safety of the separated systems and what assets Boulder may seek to
acquire. Thus, whether analyzed through the lens of issue preclusion or on the underlying merits,
this Court lacks subject matter jurisdiction and must dismiss this condemnation lawsuit.
III. PROCEDURAL AND FACTUAL BACKGROUND
Beginning in 2013, PSCo, Boulder, and numerous other parties participated in proceedings
at the PUC initiated by PSCo seeking declarations on a number of issues related to the City’s
proposal to acquire electric distribution facilities from PSCo and serve customers both within and
outside the city limits.4
2 A true and correct copy of the Final Opinion is attached hereto as Exhibit 1.
3 A true and correct copy of the Condemnation Dismissal is attached hereto as Exhibit 2.
4 The docket for these proceedings and the parties’ extensive briefing is available on the PUC’s
website: https://www.dora.state.co.us/pls/efi/EFI_Search_UI.search. Enter “13D-0498E” into the
“Proceeding Number” box, check the box next to “I’m not a robot,” and then click on the “Search”
button. PSCo will provide the Court with copies of its Verified Petition for Declaratory Orders
(“Declaratory Petition”) and any briefs or PUC pleadings desired if requested to do so.
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The PUC’s Declaratory Rulings.
In its initial order on PSCo’s Declaratory Petition, the PUC held, in pertinent part:
The Commission exercises its regulatory authority over Public Service’s
transmission and distribution lines, substations, and other facilities to
protect the reliability, safety, and service quality of electricity services
provided to unincorporated Boulder County, and to safeguard the integrity
of the system statewide. If Boulder seeks to condemn facilities, wherever
located, that Public Service currently uses, at least in part, to serve
customers located outside of Boulder’s city limits, this Commission must
have the ability to investigate and determine how the facilities should be
assigned, divided, or jointly used to protect the system’s effectiveness,
reliability, and safety, as well as any other matter affecting the public
interest. Thus, a Commission proceeding addressing these facilities should
precede a condemnation action to allow the district court to rule on the
public need and value of facilities that the Commission determines may
be the subject of transfer to Boulder.
October 29, 2013, Decision Issuing Declaratory Rulings (Proceeding No. 13D-0498E, Decision
No. C13-1350) (hereinafter “Declaratory Decision”) at ¶ 28 (emphasis added).5
Upon the City’s request for reconsideration, the PUC confirmed its role and the necessity
of completing approval proceedings prior to commencing a condemnation action:
Regulatory oversight of the assets, plant, and facilities used to provide
electricity outside Boulder’s territorial boundaries advances important
public interests. Public Service constructs, engineers, and operates its
network as an integrated system, and its service capabilities cross the
political boundaries defining the City of Boulder and Boulder County.
Performance of the Commission’s duty to ensure the reliability of the
system for unincorporated Boulder County and other regions of the state
requires an evaluation and determination of the optimal division, joint use,
and potential replacement of assets and facilities providing services both
inside and outside Boulder city limits.
* * *
5 A certified copy of the Declaratory Decision is attached hereto as Exhibit 3.
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Commission approval proceedings over regulated property is a condition
precedent to a condemnation action over the subject property.”
December 18, 2013, Decision Denying City of Boulder’s Application for Rehearing, Reargument,
or Reconsideration (Proceeding No. 13D-0498E, Decision No. C13-1550) (hereinafter “RRR”) at
¶¶ 19, 20 (emphasis added)6; see also id. ¶ 1 (“Because Colorado Supreme Court precedent
interpreting Article XXV of the state constitution … validates Commission jurisdiction to approve
the transfer of regulated property before a condemnation court acquires subject matter jurisdiction
over the property, the Commission denies Boulder’s RRR.” (emphasis added)).
This Court Affirms the PUC and Dismisses the City’s Prior Condemnation Action.
The City sought certiorari review of the PUC Decisions in this Court, claiming that the
PUC exceeded its jurisdiction when issuing the declaratory orders and that Boulder’s home rule
powers pursuant to Article XX of the Colorado Constitution allowed it to condemn property free
from PUC involvement.7 See Final Opinion at 7–8. In the Final Opinion, this Court affirmed the
Declaratory Decision and the RRR, without qualification or exception. Id. at 12. The review action
was assigned to Judge LaBuda, who rejected the City’s arguments and explained:
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. In the event Public Service continues serving those
outside of Boulder [as is the case], the Court finds that the property in
question will not be easy to separate and may require technical expertise in
determining the best method of separation in order to avoid negatively
impacting the statewide energy grid. The PUC is best suited to exercise
jurisdiction in this regard; when the General Assembly vested the PUC with
6 A certified copy of the RRR is attached hereto as Exhibit 4.
7 The district court “acts as an appellate body” when reviewing a PUC order. Lake Durango Water
Co. v. Pub. Utils. Comm’n, 67 P.3d 12, 22 (Colo. 2003); see also C.R.S. § 40-6-115(1) (authorizing
certiorari review by district court).
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this jurisdiction in the Colorado constitution, it intended to provide a
regulatory body with more expertise in administering utilities than the
district court.
* * *
[T]he actual facilities to be taken cannot be identified until it is known what
parts of the system will be retained by Public Service; only then can the
proper assets be transferred to the City.
* * *
By requiring the PUC to determine the allocation and transfer of assets prior
to the City’s condemnation, the parties avoid finding themselves in a
situation where the City has condemned property to which it ultimately may
not be entitled.
Id. at 9, 10, 12 (“The Court hereby AFFIRMS the October 29, 2013 Decision No C13-1350 and
the December 11, 2013 Decision No. C13-1550, both issued by the PUC.” (emphasis in original)).
Based upon the Final Opinion, the Court also dismissed the City’s prior condemnation
action, which the City had commenced while the appeal of the PUC’s decisions was pending. As
the Condemnation Dismissal succinctly explained:
The January 14, 2015 Order permits the Public Utility Commission to
determine how facilities should be assigned, divided, or jointly used to protect
the utility system’s effectiveness, reliability, and safety. The Court noted that
such a determination must be made prior to the City’s condemnation of
property for utility municipalization.
Accordingly the Court GRANTS Respondents’ Motion to Dismiss and
dismisses this matter without prejudice.
Condemnation Dismissal at 1 (emphasis in original). The City did not appeal the Final Opinion or
the Condemnation Dismissal.
The Ongoing PUC Proceedings.
On July 7, 2015, the City initiated the PUC proceedings that it must complete prior to
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commencing an action to condemn electric distribution facilities in Boulder.8 After the PUC
rejected the City’s first two utility plans, the City submitted a third application, nearly two years
after it began the PUC proceedings. See generally May 12, 2017, Third Supplemental Verified
Application of the City of Boulder, Colorado (Proceeding No. 15A-0589E) (“Third Application”).
The PUC conditionally granted in part and denied in part the City’s Third Application. See
generally Aug. 30, 2017, Decision Granting, in Part and with Conditions, and Denying, in Part,
Third Supplemental Verified Application (“Third Application Order”).9 The Third Application
Order made two high-level rulings relevant to this Motion to Dismiss. First, as to assets located
outside of substations, the PUC held that the designation for potential transfer of those assets was
subject to Commission approval of: (1) an agreement that “provides Public Service permanent
non-exclusive easements and other necessary real property rights for the location of its electric
facilities within Boulder’s city limits that are necessary for Public Service to provide service to its
customers after separation”; (2) a corrected, complete, and accurate list of distribution assets and
real property interests outside substations; and (3) one or more agreements for approval addressing
“the payment by Boulder to Public Service of the costs incurred by Public Service to effectuate
municipalization and the separation of Public Service’s system into two separate systems.” See,
e.g., Third Application Order ¶ 5. Second, as to assets inside substations, the PUC denied the
8 The PUC docket is available here: https://www.dora.state.co.us/pls/efi/EFI_Search_UI.search.
Enter “15A-0589E” into the “Proceeding Number” box, check the box next to “I’m not a robot,”
and then click on the “Search” button. The extensive docket may take more than a minute to load.
Subject to confidentiality restrictions, PSCo will provide the Court with copies of papers from this
docket if requested to do so.
9 The Third Application Order appears as Exhibit 6 to the City’s First Amended Petition in
Condemnation.
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City’s Third Application. See, e.g., Third Application Order ¶ 6. In reaching this decision, the PUC
concluded, “[w]e find that it is premature to designate any facilities inside the substations for
potential transfer to Boulder from Public Service.” Id.
In late-2018 and early-2019, the City made a series of filings intended to show compliance
with the conditions necessary to obtain approval for the designation of assets for transfer outside
substations. These filings included various agreements negotiated between PSCo and Boulder for
approval by the Commission and City-updated lists of assets and real property interests. The
agreements presented for approval have significant consequences to the condemnation action. For
example, the parties submitted an Agreement for Payment of Costs (the “Cost Agreement”)
addressing, among other things, the City’s responsibility to pay PSCo for $100 million or more in
costs related to the separation of the two systems. The Cost Agreement is relied upon by the City
numerous times in the Amended Petition to limit the scope of the condemnation and the City’s just
compensation obligations. See, e.g., Am. Pet. ¶¶ 38, 43, 85–86. But the Cost Agreement by its
express terms is not effective unless and until the PUC issues a final, non-appealable order
approving the Agreement without modification.10 Were the PUC to reject or modify the terms of
the Cost Agreement, the amount of compensation owed by the City in condemnation would
skyrocket and the amount and character of evidence at trial would fundamentally change. Similar
important condemnation consequences flow from other agreements still awaiting Commission
approval.11
10A true and correct copy of the Cost Agreement is attached hereto as Exhibit 5; see § VII.A.
11 The Easement Sharing Agreement attached as Exhibit 5 to the Amended Petition governs the
shared use of thousands of easements and facilities between PSCo and the City. The parties also
negotiated an agreement providing PSCo rights to retain its own electric facilities within the City
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By January of this year, significant disagreement concerning the City’s filings emerged
between the City and various parties to the proceedings, including PSCo. Those disagreements
focused primarily on the proper identification of real estate assets (the complete and accurate list
specified in the second condition discussed above) and on what is required before the City can
seek to condemn any assets within substations.12 As a result, the PUC stayed proceedings in order
to give the City the opportunity to address the concerns and amend its filings. See, e.g., Feb. 8,
2019, Interim Decision Staying Proceeding and Requiring Filings (hereinafter “Stay Order”)13 ¶
2. The PUC proceedings remain stayed and the PUC has not issued a final order approving the
designation of assets for transfer either within or outside the substations. Rather than completing
the necessary work and giving the PUC the opportunity to rule on the proposed designation of
assets for transfer, the City filed this condemnation action.
IV. GOVERNING STANDARDS
“Whenever it appears by suggestion of the parties … that the court lacks jurisdiction of the
subject matter, the court shall dismiss the action.” C.R.C.P. 12(h)(3) (emphasis added). Defendants
bring such challenges pursuant to C.R.C.P. 12(b)(1). Tulips Invs., LLC v. State ex rel. Suthers, 340
P.3d 1126, 1131 (Colo. 2105) (“A 12(b)(1) motion to dismiss challenges a court’s subject matter
post-separation. If either of these agreements is rejected or materially altered, a very different
separation plan may be required and the character of the condemnation, the amount and character
of evidence at trial, and the amount of compensation owed by the City would dramatically change.
12 See, e.g., Jan. 18, 2019, Notice of Public Service Company of Colorado’s Withdrawal from the
Joint Motion for Modification of Commission Decision C17-0750, etc. (Proceeding No. 15A-
0589E) at 2; Jan. 25, 2019, Petition for Declaratory Orders with Regard to the Portion of
Commission Decision C-17-0750 Concerning Public Service Assets (Real and Personal) Inside
Substations (Proceeding No. 15A-0589E) at 1.
13 A true and correct copy of the Stay Order is attached hereto as Exhibit 6.
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jurisdiction.”). The burden of demonstrating subject matter jurisdiction falls to the City. Arline v.
Am. Fam. Mut. Ins. Co., 431 P.3d 670, 672 (Colo. App. 2018). The City enjoys no presumptions
in its favor. See Medina v. State, 35 P.3d 443, 452 (Colo. 2001) (court weighs competing evidence
rather than treating plaintiff’s allegations as true); see also Coquina Oil Corp v. Harry Kourlis
Ranch, 643 P.2d 519, 522 (Colo. 1982) (courts resolve uncertainty as to condemnation power
against the entity asserting the right to condemn). When ruling on a motion to dismiss for lack of
subject matter jurisdiction, the Court may consider evidence outside of the pleadings; without
converting the motion to one for summary judgment. Medina, 35 P.3d at 452.
The existence of subject matter jurisdiction is a “threshold issue” for the Court. Stell v.
Boulder Cnty. Dep’t of Soc. Servs., 92 P.3d 910, 914 (Colo. 2004). If jurisdiction is lacking, the
case must be dismissed; no other action can be taken. See People in Interest of P.K., 411 P.3d 963,
968 (Colo. App. 2015) (“[A] lack of jurisdiction deprives the court of all authority to act—it is a
quintessential threshold matter.”); In re Support of E.K., 410 P.3d 480, 482 (Colo. App. 2013)
(“The court’s authority must be properly invoked before it can act ….”); People v. Widhalm, 991
P.2d 291, 293 (Colo. App. 1999) (“A court must always have jurisdiction to act. Thus, any action
taken by a court when it lacks jurisdiction is a nullity.”); C.R.C.P. 12(h)(3) (court “shall dismiss”
the action); see also 4 Colo. Prac., Civil Rules Annotated R 12 (4th ed.) (“Any proceedings that
follow a court’s improper exercise of jurisdiction are a nullity and thus a waste of the parties’ time
and resources.”).
V. ARGUMENT
The City is trying again to condemn PSCo’s electrical distribution facilities without first
obtaining the required approvals from the PUC. While Colorado law is clear on this requirement,
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the Court need not conduct a detailed review of this authority—Judge LaBuda has already done
that and her prior rulings are binding on the City. Therefore, issue preclusion mandates dismissal
of the City’s First Amended Petition in Condemnation due to lack of subject matter jurisdiction.
1. Issue Preclusion Bars this Lawsuit.
The City has already had four opportunities to argue that it can proceed to condemnation
prior to receiving approval from the PUC—twice at the PUC, once before this Court on appeal of
those rulings, and in a prior condemnation case dismissed by this Court. Pursuant to Colorado’s
issue preclusion doctrine, the Court should not give the City a fifth opportunity to litigate this
issue.
The doctrine of issue preclusion (historically called collateral estoppel) bars
litigation of previously decided issues in certain circumstances. By barring
successive litigation, the doctrine protects litigants from needless
relitigation of the same issues, furthers judicial economy, and promotes the
integrity of the judicial system by affirming that one can rely upon judicial
decrees because they are final.
The party seeking to assert issue preclusion to bar relitigation of an issue
must show that:
(1) the issue is identical to an issue actually litigated and necessarily
adjudicated in the prior proceeding; (2) the party against whom
estoppel was sought was a party or was in privity with a party to the
prior proceeding; (3) there was a final judgment on the merits in the
prior proceeding; and (4) the party against whom the doctrine is
asserted had a full and fair opportunity to litigate the issues in the
prior proceeding.
Villas at Highland Park Homeowners Ass’n, Inc. v. Villas at Highland Park, LLC, 394 P.3d 1144,
1152 (Colo. 2017) (citations and quotations omitted). 14
14 Administrative actions are afforded the same preclusive effect as judicial proceedings. See
Gallegos v. Colo. Ground Water Comm’n, 147 P.3d 20, 32 (Colo. 2006) (citing Indus. Comm’n of
the State of Colo. v. Moffat County Sch. Dist. Re No. 1, 732 P.2d 616, 620 (Colo. 1987)). “In all
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Here, all four requirements of issue preclusion have been met. First, the issue of whether
the City can commence a condemnation action before completing PUC proceedings was central to
the PUC declaratory proceedings and related district court proceedings and was squarely decided:
“[I]t is necessary and appropriate for the PUC to determine how facilities should be assigned,
divided, or jointly used to protect the system’s effectiveness, reliability, and safety. Such a
determination must be made prior to the City’s condemnation of property for utility
municipalization.” Final Opinion at 12; see also Bristol Bay Prods., LLC v. Lampack, 312 P.3d
1155, 1160 (Colo. 2013) (“In most cases, the issue raised in a later proceeding is found to be the
same, or not to be the same, as the issue decided in the first proceeding without in-depth analysis.”).
The City’s related condemnation Petition was also dismissed. Condemnation Dismissal at 1.
Second, PSCo and the City were both parties to the proceedings that terminated with the Final
Opinion. See Final Opinion at 1. Third, there was a final judgment on the merits—Judge LaBuda’s
Final Opinion, which affirmed the PUC’s original Declaratory Decision and RRR.15 There was
collateral actions or proceedings, the decisions of the commission which have become final shall
be conclusive.” Colo. Rev. Stat. § 40-6-112. Therefore, a final judgment entered by the PUC is not
subject to collateral attack in another proceeding. Lake Durango Water Co. v. Public Util.
Comm’n, 67 P.3d 12, 22 (Colo. 2003).
15 Furthermore, Colorado law precludes the City from using this new condemnation lawsui t as a
means to circumvent the prescribed procedures for the review of PUC decisions. C.R.S. § 40 -6-
115 and its predecessors provide the exclusive procedure for reviewing a PUC decision. See, e.g.,
Silver Eagle Servs. v. Pub. Utils. Comm’n, 768 P.2d 208, 209 (Colo. 1989); Pub. Serv. Co. of Colo.
v. Pub. Utils. Comm’n, 765 P.2d 1015, 1017 n. 1 (Colo. 1988). If the City was unhappy with Judge
LaBuda’s Final Opinion, its remedy lay in an appeal to the Supreme Court, the time for which has
long since expired. C.R.S. § 40-6-115(5). As noted above, the City also did not seek review of the
Third Application Order (which issued nearly 23 months ago) with either the PUC or the District
Court.
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also a final judgment dismissing the original condemnation action.16 Fourth, before the PUC and
then on appeal to this Court, the City fully and fairly litigated the issue of whether it can commence
a condemnation action before completing PUC proceedings, as the PUC and Court dockets reflect.
See PUC Proceeding No. 13D-0498E docket and Boulder District Court Case No. 2014CV30890
docket.
Because all four elements of issue preclusion have been satisfied, the City cannot relitigate
the question of whether the district court has jurisdiction to hear its condemnation claim before the
PUC proceedings are completed and the Commission determines how facilities should be assigned,
divided, or jointly used. See O’Neill v. Simpson, 958 P.2d 1121, 1123 (Colo. 1998) (en banc) (issue
preclusion applies to jurisdictional decisions). As the facts recited above demonstrate, the PUC
has not issued a final decision approving the designation of any assets sought by the City for
potential transfer. See, e.g., Stay Order ¶¶ 24–25 (observing that the City is still seeking final
approval, the PUC needs to “better understand where Boulder is in its process of acquiring assets,”
and ordering the City to work with the many parties to the PUC proceedings “to develop and to
file a proposal for addressing and resolving all outstanding issues and pleadings”); June 19, 2019,
Staff’s Response to Boulder’s Notice (Proceeding No. 15A-0589E)17 at 2 (recognizing that the
PUC may be approaching the time when it can consider final t ransfer of assets but also observing
that “serious problems lie ahead”). Accordingly, the Court must dismiss this lawsuit. See
Condemnation Dismissal at 1.
16 Indeed, all four elements of issue preclusion independently have been satisfied in the context of
the Court’s dismissal of the first condemnation lawsuit for lack of subject matter jurisdiction.
17 A true and correct copy of the Staff’s Response is attached hereto as Exhibit 7.
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2. The City Must Obtain PUC Approval as a Precondition to Condemnation, and
This Court Lacks Subject Matter Jurisdiction until It Does.
Even if this Court were to look beyond the Final Opinion and Condemnation Dismissal,
Colorado Supreme Court precedent mandates dismissal of this action for lack of subject matter
jurisdiction. Courts have recognized that the PUC has considerable expertise in matters concerning
utilities within the state, and judicial action that undermines the PUC’s authority is disfavored. See
Integrated Network Servs., Inc. v. Pub. Utils. Comm’n, 875 P.2d 1373, 1377 (Colo. 1994); Van
Wyk v. Public Serv. Co., 27 P.3d 377, 384 (Colo. 2001). Where, as here, the PUC has jurisdiction
over the property that a condemnor seeks to acquire, a condemnation court lacks jurisdiction to
proceed until the agency has acted. Colorado & S. Ry. Co. v. Dist. Ct. in and for Tenth Jud. Dist.,
493 P.2d 657, 659 (Colo. 1972) (hereinafter “Southern Railway”).18
In Southern Railway, C&W Railway filed a condemnation case to acquire an easement
over the railroad tracks of two other railroad companies (the “Petition ers”). C&W argued that it
had selected a “suitable place” for the crossing and provided the legal description of the easement
it sought to condemn. The Petitioners filed a motion to dismiss on the grounds that the
condemnation court lacked jurisdiction over the subject matter of the petition because C&W had
to first obtain an order from the PUC determining the particular point of crossing.
The condemnation court denied the motion. The Petitioners then filed for a writ of
prohibition, which the Colorado Supreme Court granted, holding that the court lacked subject
18 Other condemnation courts have also dismissed cases where another body has exclusive
jurisdiction to determine an issue that is a necessary predicate to the condemnation case moving
forward. See, e.g., In re Tonko, 154 P.3d 397, 400 (Colo. 2007) (condemnation court lacked subject
matter jurisdiction because “the water court, not it, had jurisdiction to determine whether the
[condemnor] had or could obtain an adjudicated water right, a requisite for maintaining their ditch
right-of-way condemnation action”).
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matter jurisdiction because the PUC had “the power to determine what property the condemning
railroad [could] use as the ‘particular point of crossing.’” Id. Absent the PUC exercising its
jurisdiction and deciding where the crossing must be placed, proceeding in condemnation would
“put the cart before the horse.” Id. (“If the railroad acquires immediate possession of the property
by eminent domain and the commission later determines the ‘particular point of crossing’ to be at
another location . . . the railroad would have acquired land or an easement that it cannot use, and
the one against whom the decree was entered would have had taken from it property actually not
subject to condemnation.”). Thus, until the PUC exercises its jurisdiction to (i) finally determine
how the existing integrated facilities will be assigned, divided, or jointly used in a manner that
does not threaten service to the customers retained by PSCo or otherwise impair the state’s
integrated electric grid and (ii) designates the specific assets both inside and outside substations
for potential transfer to the City, there is no defined “property” that is the proper subject of this
condemnation action. As Southern Railway recognized, without that, this Court cannot proceed.19
Here, the PUC has not yet analyzed whether the City has satisfied the conditions upon the
potential designation of assets for transfer outside of substations (much less issued an order
authorizing potential transfer) and has never even conditionally approved the potential designation
of assets for transfer within substations, id. ¶ 6 (“We find that it is premature to designate any
facilities inside the substations for potential transfer to Boulder from Public Service.”). In fact, the
19 Condemnation courts have similarly recognized that a condemnor is unable to establish the
public purpose and necessity elements of a condemnation case in such circumstances. See, e.g.,
Pub. Serv. Co. of Colo. v. Shaklee, 784 P.2d 314, 317 n.3 (Colo. 1989), overruled on other grounds
by Carousel Farms Metro. Dist. v. Woodcrest Homes, Inc., 442 P.3d 402 (Colo. 2019); Silver
Dollar Metro. Dist. v. Goltra, 66 P.3d 170, 172 (Colo. App. 2002).
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parties have not yet reached agreement, as required by the PUC, concerning numerous aspects of
a potential substation asset transfer and negotiations regarding substation asset issues continue.
Ultimately, it is critical to resolve the many outstanding regulatory issues pending before the PUC
prior to condemnation for two reasons:
First, as recognized in Southern Railway, a decision from the PUC is “absolutely essential
to framing a material allegation—the legal description of the property sought to be acquired—in
the action.” Id. at 659–660. That property, in turn, is the foundation against which legal challenges
to the taking are measured, including whether the City has carried its burden of establishing that:
1. It has the legal authority to condemn the property;
2. There is a necessity for it to acquire the particular property;
3. The property sought to be taken will serve a public use or public purpose; and
4. It engaged in good faith negotiations to acquire the specific property at issue.
See Shaklee v. Dist. Ct., 636 P.2d 715, 717–18 (Colo. 1981); Thornton v. Farmer’s Reservoir &
Irrigation Co., 575 P.2d 382, 391–92 (Colo. 1978); Colo. State Bd. of Land Comm’rs v. Dist. Ct.,
430 P.2d 617, 619 (Colo. 1967); Swift v. Smith, 201 P.2d 609, 615 (Colo. 1948) (each case
describing condemnation prerequisites that must be proven by a condemnor). All of these legal
issues turn on the division of property that can only be authorized by the entity with the technical
expertise and sole jurisdiction to do so—the PUC. See Pub. Serv. Co. of Colo. v. Pub. Utils.
Comm’n of State of Colo., 765 P.2d 1015, 1018–1019 (Colo. 1988) (holding that because of the
expertise of the PUC, courts should not undertake to duplicate the evaluation and judgment of the
PUC); Colo. Const. art. XXV (“[A]ll power to regulate the facilities, service and rates and charges
[of electric utility systems] … is hereby vested in such agency of the State of Co lorado as the
General Assembly shall by law designate [the PUC].”); C.R.S. 40-5-105(1); see also Final Opinion
17
US.124016568.02
at 12 (“By requiring the PUC to determine the allocation and transfer of assets prior to the City’s
condemnation, the parties avoid finding themselves in a situation where the City has condemned
property to which it ultimately may not be entitled.”).
Second, the practical importance of the PUC’s approval of City plans prior to Boulder’s
acquisition of any facilities cannot be overstated. Southern Railway involved a single easement to
effectuate a railroad crossing. Here the subject matter involves, by the City’s own count, “over
100,000 pieces of equipment” that take thousands of pages to describe. See Am. Pet. ¶¶ 19, 21, 24.
It also involves the separation and reintegration of complex interconnected electric networks in a
manner that ensures ongoing safe and reliable service to the customers retained by PSCo and
protects the larger grid.20 Many stakeholders, none of which currently are parties to this
proceeding, but all of whom represent important interests related to the proposed separation, are
involved in the PUC proceedings, including PUC staff, the Office of Consumer Counsel, IBM,
Tri-State Generation and Transmission, Poudre Valley REA, and other customers.21 Moving
forward with condemnation without the PUC’s final review and approval (and without the input
of all key stakeholders) and allowing the City to simply take for itself whatever the City deems
desirable to run its own municipal utility threatens the Commission’s ability to protect the safety,
20 The legislature has declared that the location, construction, and improvement of major electrical
facilities are matters of statewide concern and that impacts on the electric grid in one location may
have impacts on other areas of the state. C.R.S. § 29-20-108(1).
21 The Third Application Order did not provide that Boulder had to merely file documents its
believes evidence satisfaction of the three conditions. Instead, the Third Application Order
provided a 30-day period for any party to request a hearing on whether Boulder has met the
conditions and for the Commission to issue a final decision on whether the conditions have been
met. Third Application Order ¶¶ 162–63. A hearing has been requested as to several issues by the
parties, although proceedings remain stayed.
18
US.124016568.02
effectiveness, and reliability of service to the remaining customers and to the statewide electric
network. See Final Opinion at 12 (“[I]t is necessary and appropriate for the PUC to determine how
facilities should be assigned, divided, or jointly used to protect the system’s effectiveness,
reliability and safety.”).
VI. CONCLUSION
For the reasons set forth above and the earlier decisions of the Court, the City’s First
Amended Petition in Condemnation should be dismissed.
DATED this 5th day of August, 2019.
FAEGRE BAKER DANIELS LLP
/s/ John R. Sperber
John R. Sperber, Atty. Reg. No. 22073
Brandee L. Caswell, Atty. Reg. No. 30706
Matthew D. Clark, Atty. Reg. No. 44704
Attorneys for Respondent
Public Service Company of Colorado
19
US.124016568.02
CERTIFICATE OF SERVICE
The undersigned certifies that on August 5, 2019, a copy of the foregoing MOTION TO
DISMISS FIRST AMENDED PETITION IN CONDEMNATION FOR LACK OF
SUBJECT MATTER JURISDICTION PURSUANT TO COLO. R. CIV. P. 12(b)(1) was
served on all counsel of record by the methods listed below:
Attorneys for Petitioner, City of Boulder:
Office of the Boulder City Attorney
Thomas A. Carr
Kathleen E. Haddock
P.O. Box 791
Boulder, CO 80306
carrt@bouldercolorado.gov
haddockk@bouldercolorado.gov
( ) First Class Mail
( ) Hand Delivery
( ) Overnight Delivery
(X ) CCES
( ) E-Mail
Hamre, Rodriguez, Ostrander & Dingess, PC
Donald M. Ostrander
Richard F. Rodriguez
3600 S. Yosemite Street, Suite 500
Denver, CO 80237
dostrander@hrodlaw.com
rrodriguez@hrodlaw.com
( ) First Class Mail
( ) Hand Delivery
( ) Overnight Delivery
(X ) CCES
( ) E-Mail
Attorney for Defendant, Paul Weissmann, in his
official capacity as Treasurer of Boulder County
Olivia D. Lucas
Boulder County Attorney
P.O. Box 471
Boulder, CO 80306
olucas@bouldercounty.org
( ) First Class Mail
( ) Hand Delivery
( ) Overnight Delivery
(X ) CCES
( ) E-Mail
/s/Lisa Riggenbach
Legal Administrative Assistant
EXHIBIT 1
TO
MOTION TO DISMISS FIRST AMENDED PETITION IN CONDEMNATION FOR
LACK OF SUBJECT MATTER JURISDICTION PURSUANT TO COLO. R. CIV. P.
12(B)(1)
1
This matter comes before the Court on the City of Boulder’s (the “City” or “Boulder”)
Petition for Writ of Certiorari Review of Decision No. C13-1350 and Decision No. C13-1550
issued by the Colorado Public Utilities Commission (the “PUC” or the “Commission”). The
City filed its Opening Brief on May 14, 2014; the PUC, Public Service Company of Colorado
(“Public Service”), and Colorado Office of Consumer Counsel each filed an Answer Brief on
June 25, 2014; the City filed a Reply Brief on July 23, 2014; after receiving leave of court, the
PUC and Public Service each filed Sur-Reply Briefs on August 8, 2014; and the City filed a
Response to Sur-Reply Briefs on August 21, 2014. On October 16, 2014, this matter was
District Court, Boulder County, State of Colorado
1777 Sixth Street, Boulder, Colorado 80306
(303) 441-3744
THE CITY OF BOULDER, a home rule City and a
Colorado Municipal Corporation,
PETITIONER,
v.
COLORADO PUBLIC UTILITIES COMMISSION;
JOSHUA B. EPEL and PAMELA J. PATTON, in their
official capacities as members of the Commission;
GLENN A. VAAD, in his official capacity as a member
of the Commission and as successor to former
Commissioner James K. Tarpey, in his official capacity
as a member of the Commission,
RESPONDENTS,
and
PUBLIC SERVICE COMPANY OF COLORADO; and
COLORADO OFFICE OF CONSUMER COUNSEL,
INVERVENORS.
Case Number: 14CV30047
Division 2
Courtroom Q
ORDER RE: JUDICIAL REVIEW OF THE COLORADO PUBLIC UTILITIES
COMMISSION DECISIONS
DATE FILED: January 14, 2015
CASE NUMBER: 2014CV30047
2
reassigned to the undersigned judicial officer. After carefully considering the extensive
pleadings filed, the exhibits, and the applicable law, the Court hereby enters the following Order:
I. BACKGROUND
In November 2011, Boulder voters approved a ballot measure that authorized the creation
of a municipal utility subject to certain conditions. The intended municipal utility’s service area
includes the City of Boulder as well as part of unincorporated Boulder County, as described in a
July 2013 Boulder City Council memorandum and attached map. In August 2013, the Boulder
City Council adopted a City Charter Amendment allowing the City to include non-resident
customers in the City’s utility service area.
Also in August 2013, the City Council adopted an ordinance that authorized the
acquisition, by purchase or condemnation, of the Public Service Company’s utility system that
currently serves the intended municipal utility’s service area. The utility system the City seeks to
acquire includes four substations, power lines and poles, a 115kV transmission loop, and other
facilities. Public Service correctly maintains that many of these facilities serve customers
outside the City as well as customers inside the City, and are part of a larger distribution system
that serves other parts of Colorado.
In November 2013, Boulder voters approved acquisition of the Public Service utility
system located in the municipal utility’s intended service area if bonds for the purchase of same
did not exceed $214 million.
Boulder, as a home rule city, has a constitutional right to use the power of eminent
domain to create and operate a municipal utility. Colo. Const. art. XX, §§ 1 and 6. Accordingly,
if Boulder were seeking to create a municipal utility to serve City of Boulder residents onl y, it
could do so without any PUC involvement. City of Ft. Morgan v. Colo. Pub. Utils. Comm’n, 159
P.3d 87 (Colo. 2007). Respondents do not dispute Boulder’s authority to create a municipal
utility and to condemn facilities, wherever located, to create a utility that serves Boulder
residents only. If Boulder residents are not satisfied with the services provided by the municipal
utility, they may “demonstrate their discontent at the next municipal election.” K.C. Elec. Ass’n
v. Pub. Utils. Comm’n, 550 P.2d 871, 873 (Colo. 1976). There is no need for PUC protection
because the city’s electorate exercises the ultimate control over a city-run utility. Id. at 874.
However, when a municipal utility serves customers who are not residents of the
municipality, it is subject to the same PUC control and supervision that applies to private public
utility owners. City of Lamar v. Town of Wiley, 248 P. 1009 (Colo. 1926); see also Colo. Const.
art. XXV (vesting the PUC with broad authority to regulate public utilities). The rationale for
PUC regulation of a municipal utility serving non-residents was explained in K.C. Electric, 550
P.2d at 874:
When a municipally owned utility provides utility service outside the
municipality, those receiving the service do not have a similar recourse on
3
election day. They have no effective way of avoiding the possible whims and
excesses of the municipality in the absence of state regulation by the PUC.
Boulder’s municipalization plans assume its utility will provide service to at least 5,8001
customers who are not Boulder residents. In February 2013, Boulder sent letters to potential
customers who reside outside the city limits; advising them that the city utility, if created, would
provide their electrical service.
The PUC issues Certificates of Public Convenience and Necessity (“CPCN”) that
authorize an entity to provide electric service in a specified geographic area. Currently, Public
Service holds the CPCN for the geographic area outside the City of Boulder that Boulder intends
to serve with its municipal utility. The Respondents do not object to transfer of the portion of the
CPCN that relates to the City of Boulder, but they do object to transferring the portion of the
CPCN that relates to customers in unincorporated Boulder County. The City has reserved its
right to take, by eminent domain, Public Service’s CPCN, and to seek its own CPCN, to serve
those customers outside the City of Boulder—the extraterritorial customers.2
II. THE PUC DECISIONS
In May 2013, Public Service filed a Petition with the PUC requesting declaratory rulings
about Boulder’s stated intention to obtain the extraterritorial customers through condemnation of
its CPCN and condemnation of the facilities that serve those customers. The Petition requested
five declaratory orders:
(1) If a municipal utility seeks to serve customers located outside the city's
boundaries, it is subject to the certificate jurisdiction of the Commission.
(2) The Commission has already granted to Public Service a certificate of public
convenience and necessity covering the territory in Boulder County, outside the
Boulder city boundaries, in which the 5,800 customers are located;
(3) Under Colorado law, there can only be one certificated utility per geographic
area;
(4) The certificate of an existing utility cannot be taken away without due process
of law which requires a hearing before this Commission and proof by substantial
1 Public Service notes that the term “5,800 customers” refers to 5,800 meters, which translates to service for over
11,000 persons. Answer Br. at 5. Since the PUC hearing, Public Service revised its estimate of affected meters to
7,015. Id.
2 The Court notes the City’s shifting position with regard to Public Service’s CPCN throughout its briefings for this
appeal. In its Opening Brief, the City states that its intends to acquire, by negotiation with Public Service or by
eminent domain, Public Service’s CPCN to serve those outside the City of Boulder. Opening Br. at 4. In its Reply
Brief, the City noted that in its Petition in Condemnation in case number 2014CV30890, it did not list any portion of
Public Service’s CPCN in the list of property and facilities to be acquired. Reply Br. at 14. In its Response to Sur -
Reply Briefs, the City states that while it did not include Public Service’s CPCN in the Petition in Condemnation, it
has not withdrawn the same CPCN issue from the instant appeal. Resp. t o Sur-Reply at 1.
4
evidence that the existing certificated public utility is unwilling or unable to serve
the certificated area; and
(5) The need to construct replacement facilities as a result of actions taken by a
challenging utility does not constitute an inability to serve.
The City admitted the first three statements. The PUC orders at issue in this case addressed the
fourth and fifth statements.
On October 29, 2013, the PUC issued Decision No. C13-0498E, that states:
Boulder’s plans to condemn Public Service’ CPCN to serve unincorporated
Boulder County do not affect the Commission’s authority over the transfer of the
CPCN or the applicable standards. The statute upon which Boulder relies as
granting a property interest to a CPCN, § 40-5-105, C.R.S., conditions any sale or
assignment of a CPCN upon Commission approval and upon such terms and
conditions as the Commission may prescribe.
PUC Decision at 10. Boulder agrees that a transfer of Public Service’s CPCN to the City is
subject to Commission approval. “[T]he City understands that the Commission ultimately will
need to approve the transfer of the portion of the Company’s CPCN that includes out of city
customers.” Opening Br. at 4. Boulder disagrees with the following Commission rulings:
If Boulder seeks to condemn facilities, wherever located, that Public Service
currently uses, at least in part, to serve customers located outside of Boulder’s city
limits, this Commission must have the ability to investigate and determine how
the facilities should be assigned, divided, or jointly used to protect the system’s
effectiveness, reliability, and safety, as well as any other matter affecting the
public interest. Thus, a Commission proceeding addressing these facilities should
precede a condemnation action to allow the district court to rule on the public
need and value of facilities that the Commission determines may be the subject of
transfer to Boulder.
The potential that Boulder may file a condemnation action to obtain Public
Service’s CPCN for unincorporated Boulder County does not affect the
Commission’s regulatory authority, the doctrine of regulated monopoly, or the
standards governing transfer of Public Service’s CPCN. Further, Commission
proceedings addressing the transfer of Public Service’s CPCN or other plant,
equipment, and facilities used to provide service to customers located in
unincorporated Boulder County are to be completed before Boulder initiates a
condemnation action for such property.
5
The City filed an Application for Rehearing, Reargument, or Reconsideration. The PUC
issued Decision No. C13-1550 denying that Application; it stated the Commission will decide
what property rights Boulder may acquire and Boulder must obtain PUC approval before it
begins a condemnation action. That decision was adopted on December 11, 2013.
These are the rulings that are the subject of this judicial review.
III. STANDARD OF REVIEW
“The PUC order is equivalent to a trial court decision, and in reviewing a PUC order, the
district court acts as an appellate body.” Lake Durango Water Co. v. Pub. Utils. Comm’n, 67
P.3d 12, 22 (Colo. 2003). The district court’s role is to “ensure that the Commission has
regularly pursued its authority, that its decisions are just and reasonable and that the
Commission's conclusions are ‘in accordance with the evidence.’” City of Montrose v. Pub.
Utils. Comm’n, 629 P.2d 619, 622 (Colo. 1981) (quoting § 40-6-115(3), C.R.S.). The party
objecting to a Commission decision has the burden of proving that the decision is unlawful.
CF&I Steel, L.P. v. Pub. Utils. Comm’n, 949 P.2d 577, 585 (Colo. 1997).
When a party challenges a Commission decision based on a violation of constitutional
rights, as Boulder does here, “the district court shall exercise an independent judgment on the
law and the facts.” § 40-6-115(2), C.R.S. The court decides matters of law de novo. Pub. Serv.
Co. v. Trigen-Nations Energy Co., 982 P.2d 316, 326 (Colo. 1999). “Upon review, the district
court shall enter judgment either affirming, setting aside, or modifying the decision of the
commission.” § 40-6-115(3), C.R.S.
IV. THE PARTIES’ POSITIONS
The City objects vigorously to the sequence of events ordered by the Commission. The
City maintains that Commission approval as a pre-condition to condemnation disregards and
interferes with its constitutional right of eminent domain. Boulder asserts it should be free to
proceed with eminent domain action before seeking any approval from the PUC. Boulder has
reserved its right to obtain Public Service’s CPCN and facilities by condemnation.3 Boulder
would then seek PUC approval of an amended CPCN that is consistent with the condemnation
court orders.
The Commission maintains Boulder does not have an unfettered right to condemn and
acquire fundamental components of the electric grid serving communities outside Boulder. The
Commission notes it is mandated to ensure safety and reliability of the statewide network. The
Commission asserts it has the authority to determine which provider to certificate in
unincorporated Boulder County; Boulder does not have the right to assume it will take whatever
service area it deems fit to take.
3 The City filed for condemnation on July 17, 2014 and did not request condemnation of Public Service’s CPCN at
that time. See supra footnote 2. Boulder asserts it would seek the PUC’s regulatory review following the
condemnation.
6
V. ANALYSIS
A. Constitutional Authority
Boulder, a home rule city, has a constitutional right to use the power of eminent domain
to create and operate a municipal utility. The Colorado Constitution expressly grants home rule
cities the power, “within or without [their] territorial limits to . . . condemn and . . . operate . . .
public utilities . . . and everything required therefore.” Colo. Const. art. XX, §§ 1 and 6.4 The
Respondents do not dispute Boulder’s authority to establish a municipal utility to serve residents
within the city limits, nor do Respondents dispute Boulder’s authority to condemn property
needed to create the utility that would serve Boulder’s residents, including property located
outside the city limits. The Respondents do dispute Boulder’s assertion that its eminent domain
power is superior to the Commission’s constitutional authority as it relates to customers located
outside the City or to facilities that affect customers outside the City or the statewide utility
network.
Article XXV of the Colorado Constitution vests the Commission with “all power to
regulate the facilities, service and rates and charges . . . of every . . . public utility” operating
within the state. Colo. Const. art. XXV. Article V, section 35 states, “[t]he general assembly
shall not delegate to any special commission, private corporation or association, any power to
make, supervise or interfere with any municipal improvement, money, property or effects,
whether held in trust or otherwise, or to levy taxes or perform any municipal function whatever.”
This section has been interpreted as pertaining to public utilities operating within municipal
boundaries. City of Ft. Morgan, 159 P.3d at 96. The PUC is vested with broad authority to
regulate public utilities in this state and it has considerable discretion in its choice of the means
to accomplish its functions. Colo. Const. art. XXV; § 40-4-101, C.R.S.; Mountain States Tel. &
Tel. Co. v. Pub. Utils. Comm’n, 763 P.2d 1020 (Colo. 1988); City of Montrose v. Pub. Utils.
Comm'n, 629 P.2d 619 (Colo. 1981).
The Court must evaluate the proper process by which to address these distinct
constitutional rights under Articles XX and XXV. The Court must review the rights provided to
each party under the Colorado Constitution—the City’s right to eminent domain and the PUC’s
right to regulate public utilities. The pivotal question then is whether these constitutional rights
in this instance are in conflict or may coexist. The Court must interpret the application of these
constitutional rights under the facts of this case.
It is clear that the PUC does not have jurisdiction to exercise its authority under Article
XXV when a municipality operates a utility solely within its boundaries under Article XX. City
of Loveland v. Pub. Utils. Comm’n, 580 P.2d 381, 383 (Colo. 1978); City and Cnty. of Denver v.
Pub. Utils. Comm’n, 507 P.2d 871, 874-75 (Colo. 1973); Town of Holyoke v. Smith, 226 P. 158,
161 (Colo. 1924). However, municipal utilities servicing areas outside of the boundaries of the
municipality are subject to the jurisdiction of the PUC. Loveland, 580 P.2d at 383; City and
4 The City also claims a franchise and statutory right to purchase or condemn utility systems. In this case, the
franchise has expired; accordingly, any rights conferred by the franchise have likewise expired. The statutory right
is based on section 31-15-707, C.R.S., which provides that municipalities may acquire utility systems by purchase or
condemnation after the franchise has been in effect for a given number of years.
7
Cnty. of Denver, 507 P.2d at 875. This proposition is true even if the municipality is providing
service extraterritorially in connection with providing service within the city—the municipality
is still treated as a privately-owned public utility. Loveland, 580 P.2d at 384. Therefore, the
PUC’s right to regulate a public utility is of utmost importance and will not be overcome by a
municipality’s exercise of its right to condemn. In assessing the operation of utilities outside the
boundaries of a municipality, “the PUC must . . . be allowed the power to resolve jurisdictional
disputes between municipalities and private utilities companies over who is to serve areas
outside municipal boundaries.” Id. at 385.
The PUC’s right to exercise jurisdiction over a municipality providing services to
customers outside of the municipality is important to protect those who do not have voting rights
within the municipality. See K.C. Elec., 550 P.2d at 874. The City characterizes the
extraterritorial customers as “incidental” and asserts they represent only 3 per cent of the
customer load. Originally the number of extraterritorial customers was quantified at 7,800; it has
since been revised to a greater number. The Court finds the number of customers outside the city
limits is neither dispositive nor persuasive for the arguments presented by the City or the PUC ;
what matters is the fact that Boulder seeks to include non-resident customers in its service area.
Service to non-resident customers thus invokes PUC jurisdiction and regulation.
B. The Doctrine of Regulated Monopoly
“Colorado has long been dedicated to the principle of ‘regulated monopoly’ in the
conduct of public utilities operations. Pub. Serv. Co. of Colo. v. Pub. Utils. Comm’n of the State
of Colo., 765 P.2d 1015, 1021 (Colo. 1998). “After a utility has been assigned a specific
territory, no other utility may provide service in that territory unless it is established that the
certificated utility is unable or unwilling to provide adequate service. Once an area has been
certificated to one utility, it and it alone has the right to serve the future needs of that area
provided it can do so. This is essential to the doctrine of regulated monopoly in Colorado. This
exclusive right to serve an area is a property right which cannot be affected except by due
process of law.” Id. (internal citations omitted). Therefore, only one entity may hold a CPCN to
provide utilities to a designated geographic area. Public Services currently holds the CPCN to
provide utilities to unincorporated Boulder. Boulder asserts it has the authority to take Public
Service’s CPCN for non-residents by eminent domain. Such assertion would reduce the PUC’s
authority to regulate services and facilities for those extraterritorial customers to a ministerial
role. The Court finds this is not consistent with Article XXV of the Colorado Constitution or the
doctrine of regulated monopoly.
C. Right to Choose Property for Condemnation
The City claims the PUC exceeded its authority when it ruled that the “[PUC] must have
the ability to investigate and determine how the facilities should be assigned, divided, or jointly
used to protect the system’s effectiveness, reliability, and safety, as well as any other matter
affecting the public interest.” Decision at 13. Similarly, the City claims the PUC exceeded its
authority when it ruled that PUC proceedings addressing the transfer of Public Service’s CPCN
or other plant, equipment, and facilities used to provide service to customers located in
unincorporated Boulder County are to be completed before Boulder initiates a condemnation
8
action for such property. Id. at 12. The City maintains these decisions “threaten to block or limit
the electric utility project approved by the Boulder voters in 2011 and 2013. Opening Br. at 1.
The City also maintains the PUC rulings “interfere with the City’s constitutional authority to
acquire the electric system serving the City.” Id.
Boulder repeatedly characterizes the PUC action as abrogating its constitutional right to
eminent domain. The Court is not persuaded. The PUC action only delays Boulder’s
constitutional right to eminent domain, a delay that would necessarily occur at some point in
time prior to finalizing the utility municipalization, to provide PUC its constitutional right to
investigate and determine how the facilities should be assigned, divided, or jointly used to
protect the system’s effectiveness, reliability, and safety, as well as any other matter affecting the
public interest.
The City claims the City, not the PUC, has the right to determine which property to
acquire. Boulder states “condemnation is ‘an essential part of the power of eminent domain.’”
City of Thornton v. Farmers Reservoir & Irrigation Co., 575 P.2d 382, 389 (Colo. 1978). The
City asserts that “[i]n Thornton v. Farmers, the Supreme Court held that which utility assets a
home rule city may condemn is a matter for the city and not the Commission.” Opening Br. at
10-11. The Court does not find the Thornton case stands for that proposition. Thornton involved
a home rule city’s eminent domain action to condemn certain water and water rights, and ditches
and ditch rights. Thornton, 575 P.2d at 382. The case examined the city’s right of eminent
domain vis a vis the Water Rights Condemnation Act. Id. at 386. That Act provided for the
appointment of three commissioners to determine the issue of necessity in an eminent domain
action; the “commissioners” referred to were members of that three person commission. Id. The
Act also prohibited condemnation of water rights for future use in excess of 15 years. Id. The
cited section of Thornton, discusses why the Act’s provision for commissioners to determine
necessity and the limit on condemnation based on the number of years are unconstitutional. Id.
at 388-90. In Thornton, the Court found that the statutory authority of the appointed
commissioners was unconstitutional because it conflicted with the constitutional rights of home
rule cities with regard to eminent domain. Id. at 388. Here, the PUC is vested with its own
constitutional authority to regulate public utilities, a right not conferred on the commissioners in
Thornton. Accordingly, the PUC, a state regulatory commission vested with constitutional
authority, has greater authority than the commissioners in Thornton and such constitutional
authority is not necessarily overcome by a home rule city’s right to eminent domain when the
exercise of Boulder’s right impacts extraterritorial customers and the statewide energy grid.
The City also relies on Public Service Company of Colorado v. City of Loveland, 245 P.
493 (Colo. 1926), to support its assertions that it has the right to choose which property to
acquire and condemn. In that case, the City of Loveland brought an eminent domain proceeding
against the Public Service Company to acquire an electric lighting plant owned by the company.
Id. at 495. The city did not need all of the property owned by the company, sp ecifically a certain
substation, the real estate upon which it stood, and certain transmission lines, and excluded these
items from the condemnation. Id. at 496. Public Service argued that the city must take the entire
plant if it takes anything. Id. at 499. The Supreme Court disagreed, stating “the necessities and
requirements of the city . . . is the determining factor as to what shall be taken.” Id. The Court
observed the company will receive compensation for the value of what the city takes and
9
compensation for any damage to the residue. Id. This Court notes that, in this Loveland case, it
was easy to separate the property the city wanted to take from the property it did not want to take
and that the property in question was intended to provide services within the municipality.
Boulder also cites to City of Loveland, 580 P.2d at383: “The PUC may not interfere with
municipal decisions about purchasing, selling or building public utilities facilities.” That is an
accurate quote; however, Boulder fails to mention that it appears in a paragraph discussing a
municipal utility operating solely within its boundaries.
The case at hand is distinguished from many of the eminent domain cases cited by the
City because the property to be condemned is less identifiable. Boulder asserts it is clearly
identifiable because it is the power system currently being used to deliver power to its planned
service area. However, the power system is intertwined with the system that provides service to
extraterritorial customers and the statewide energy grid. In making this argument, Boulder
assumes it will be providing service to those customers outside of the City that receive service
through the same power system.
Public Service still holds the CPCN to provide service to the extraterritorial customers.
Respondents correctly maintain that Boulder cannot appropriate the Public Service customers in
unincorporated Boulder County as there has been no evidence or assertion that Public Service is
unable or unwilling to provide adequate service and therefore retains the right to do so.5 The
Court proceeds under the assumption that Public Service maintains its right to provide service
outside of the municipality unless and until the PUC determines whether the CPCN will be
transferred.
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. In the event Public Service continues
serving those outside of Boulder, the Court finds that the property in question will not be easy to
separate and may require technical expertise in determining the best method of separation in
order to avoid negatively impacting the statewide energy grid. The PUC is best suited to
exercise jurisdiction in this regard; when the General Assembly vested the PUC with this
jurisdiction in the Colorado Constitution, it intended to provide a regulatory body with more
expertise in administering utilities than the district court.
D. Regulation of Asset Transfer and Condemnation
In reaching its determination, the Court relies, in part, on Colorado and Southern Railway
Company v. District Court, 493 P.2d 657 (Colo. 1972). In this case, the Colorado and Southern
Railway Company filed a condemnation action in district court to acquire property for a railroad
crossing that crossed the tracks of two other railroads. Id. at 658. The location of the crossing
was subject to PUC approval. Id. at 659. The Colorado Supreme Court held the district court
did not have subject matter jurisdiction to proceed in the condemnation case because the PUC
first had to determine where the crossing would be located. Id. The Court stated, “the Public
5 The only assertion that Public Service is unable to provide service to extraterritorial customers is Boulder’s
argument that if it obtained the CPCN for unincorporated Boulder, Public Service would be unable to provide
service to those customers.
10
Utilities Commission . . . has the power to determine what property the condemning railroad can
use as the particular point of crossing. It follows logically then that the commission—not the
railroad—determines what property the railroad requires.” Id. at 659. The Court noted that the
property had to be identified in the eminent domain complaint and the eminent domain court
could not assess just compensation until the property was identified. Id. “Any other
construction . . . would present the classic ‘cart before the horse’ situation.” Id.
Although in Colorado and Southern Railway, the property at issue was a single railroad
crossing, this case provides significant support for the PUC’s authority to identify the specific
property for condemnation, prior to the actual condemnation. In holding that the PUC must
identify the property for condemnation, even when the subject property is minimal, it follows
that the PUC would have the authority to identify the property for condemnation when there is a
large amount of property in question. This holds true particularly when such property provides
service to at least 5,800 extraterritorial customers and impacts the statewide energy grid over
which the PUC clearly has regulatory authority.
The City attempts to distinguish the Colorado and Southern Railway case by arguing that
the location of the railroad crossing had to be identified prior to the condemnation action
whereas here, the location of the property for condemnation is already known. While accurate,
the Court finds that Colorado and Southern Railway still governs the matter at hand. Although
the location of the property is known, the actual facilities to be taken cannot be identified until it
is known what parts of the system will be retained by Public Service; only then can the proper
assets be transferred to the City.
A similar proposition requiring commission approval prior to the transfer of assets is set
forth in Mountain States Telephone and Telephone Company v. Public Utilities Commission, 763
P.2d 1020, 1023 (Colo. 1988), which involved an asset transfer from Mountain Bell to U.S. West
Direct. Mountain Bell was a telephone company regulated by the PUC and it did not obtain PUC
approval prior to the asset transfer. Id. at 1024. The PUC ordered Mountain Bell to reacquire
the assets; the Court upheld the PUC’s decision. Id. at 1028. Further, section 40-5-105(1),
C.R.S., permits the sale, assignment, or lease of a CPCN only upon authorization by the PUC
and upon the terms and conditions set forth by the PUC. Boulder seeks to serve unincorporated
Boulder through transfer of the CPCN; there is no legal authority to indicate such a transfer is
not subject to this statutory provision.
Boulder argues that Miller v. Public Service Company, 272 P.2d 283 (Colo. 1954),
supports its position that condemnation may occur prior to PUC approval. In Miller, the Public
Service sought to condemn land to construct a new generating plant. Id. at 284. The landowner
argued that Public Service could not condemn his property because Public Service had not yet
obtained a certificate of necessity from the PUC. Id. at 285. The Colorado Supreme Court found
in favor of Public Service, stating, “[t]he so-called certificate is only a permit or license to use
and enjoy land that has been condemned; it is not a condition precedent to the right to condemn.”
Id. This case does not govern the matter at hand because here the City is attempting to condemn
utility infrastructure already owned by Public Service, rather than land on which to build utility
infrastructure. An entity is only required to fist obtain a CPCN when the property to be
condemned is property over which the PUC already has authority. Here, the property to be
11
condemned is clearly already under PUC’s authority, as a CPCN is already assigned to Public
Service and therefore, Boulder must obtain a CPCN transfer prior to condemnation.
The City addressed at length its power to condemn extraterritorial property. The Court
agrees the City has the power to condemn extraterritorial property, and the Respondents do not
contest that fact. See, e.g., Town of Telluride v. San Miguel Valley Corp. 185 P.3d 161 (Colo.
2008). In Telluride, the Court found a statute that prohibited home rule cities from condemning
extraterritorial land for open space and park purposes was unconstitutional because it abrogated
the eminent domain power granted to home rule cities by article XX of the Colorado
Constitution. Id. at 163. In a footnote, the Court stated, “[o]ur past cases indicate that, although
the legislature may not prohibit the exercise of article XX powers, it may regulate the exercise of
those powers in areas of statewide or mixed state and local concern. Therefore, the analysis of
competing state and local interests would be appropriate in a case involving a statute which
merely regulates home rule municipalities' exercise of their constitutional powers.” Id. at 170,
n.8 (emphasis in the original).
The Court finds that Telluride does not provide the City unfettered power to condemn
property necessary for utility municipalization. Unlike in Telluride, the property the City desires
to condemn provides service outside of the municipality and the PUC has the authority under the
Colorado Constitution, not just a statute, to govern the provision of utilities to extraterritorial
customers and state interests. Boulder has a constitutional right to condemn facilities in
unincorporated Boulder County for its city utility municipalization, but it does not have a
constitutional right to usurp the PUC’s constitutional right to regulate facilities and services that
serve utility customers in unincorporated Boulder County. Further, because of the effect that
transfer of the CPCN would have on extraterritorial customers, this is a matter of mixed state and
local concern, which the PUC has the right to regulate as set forth above. This does not prevent
the City from ultimately condemning property to municipalize the utility, but rather requires the
PUC to make a determination regarding allocation prior to the condemnation.
Public Service asked the PUC to enter a declaratory judgment that the need to construct
replacement facilities as a result of actions taken by a challenging utility does not constitute an
inability to serve. The PUC now asks this Court to make the same declaratory judgment. The
Court leaves this initial determination to the PUC, a regulatory agency that has the expertise to
make such a determination.
VI. CONCLUSION
Under the doctrine of regulated monopoly, which governs PUC regulations, Boulder and
Public Service cannot simultaneously serve the same geographic region, in this case the section
of unincorporated Boulder County that Boulder included in its acquisition area. Only one entity
may hold the CPCN for a specific geographic location. Here, no evidence has been set forth to
show that Public Service is unable or unwilling to serve unincorporated Boulder and therefore
maintains a property right to do so, which the City cannot single-handedly appropriate despite its
constitutional rights under Article XX of the Colorado Constitution. The City’s constitutional
right to eminent domain over property outside of its territory does not extend to serving those
12
outside the municipality. The City’s constitutional right is not unfettered because the PUC has
constitutional authority to regulate public utilities for those outside the municipality. This
limitation provides a certain level of protection for those who have no vote, and therefore no
voice, within a municipality.
The PUC has the authority to regulate public utilities and the facilities, which provide
service within the City of Boulder as well as unincorporated Boulder. The City has the right to
create a municipal utility to serve its citizens. These facilities are intimately intertwined.
Therefore, it is necessary and appropriate for the PUC to determine how facilities should be
assigned, divided, or jointly used to protect the system’s effectiveness, reliability, and safety.
Such a determination must be made prior to the City’s condemnation of property for utility
municipalization.
This finding does not abrogate the City’s constitutional right to eminent domain, but
rather just delays the City’s constitutional right, a delay that would necessarily occur at some
point in the process. By requiring the PUC to determine the allocation and transfer of assets
prior to the City’s condemnation, the parties avoid finding themselves in a situation where the
City has condemned property to which it ultimately may not be entitled.
The Court hereby AFFIRMS the October 29, 2013 Decision No. C13-1350 and the
December 11, 2013 Decision No. C13-1550, both issued by the PUC.
DATED: 1/14/15
BY THE COURT
Judith L. LaBuda
District Court Judge
EXHIBIT 2
TO
MOTION TO DISMISS FIRST AMENDED PETITION IN CONDEMNATION FOR
LACK OF SUBJECT MATTER JURISDICTION PURSUANT TO COLO. R. CIV. P.
12(B)(1)
District Court, Boulder County, State of Colorado
1777 Sixth Street, Boulder, Colorado 80302
(303) 441-3744
▲ COURT USE ONLY ▲
Petitioner:
THE CITY OF BOULDER, a Home Rule City and a
Colorado Municipal Corporation,
v.
Respondents:
PUBLIC SERVICE COMPANY OF COLORADO, a
Colorado Corporation; XCEL ENERGY INC.; and BOB
HULLINGHORST, in his official capacity as Treasurer
of Boulder County.
Case Number: 2014CV30890
Division 2
Courtroom Q
ORDER RE: RESPONDENTS’ PUBLIC SERVICE COMPANY OF COLORADO AND
XCEL ENERGY INC.’S MOTION TO DISMISS UNDER C.R.C.P. 12(b)(1)
FOR LACK OF SUBJECT MATTER JURISDICTION
This Matter comes before the Court on Respondents’ Public Service Company of
Colorado and Xcel Energy Inc.’s August 12, 2014 Motion to Dismiss Under C.R.C.P. 12(b)(1)
For Lack of Subject Matter Jurisdiction. Petitioner filed a Response on September 2, 2014, to
which Respondents filed a Reply on September 9, 2014. Having considered the pleadings and
applicable case law, the Court finds and rules as follows:
On January 14, 2015, the Court affirmed the Public Utility Commission’s October 29,
2013 and December 11, 2013 Decisions in case 2014CV30047. The January 14, 2015 Order
permits the Public Utility Commission to determine how facilities should be assigned, divided,
or jointly used to protect the utility system’s effectiveness, reliability, and safety. The Court
noted that such a determination must be made prior to the City’s condemnation of property for
utility municipalization.
Accordingly the Court GRANTS Respondents’ Motion to Dismiss and dismisses this
matter without prejudice.
1
DATE FILED: February 13, 2015 3:24 PM
CASE NUMBER: 2014CV30890
DATED: 2/13/15
BY THE COURT
Judith L. LaBuda
District Court Judge
2
EXHIBIT 3
TO
MOTION TO DISMISS FIRST AMENDED PETITION IN CONDEMNATION FOR
LACK OF SUBJECT MATTER JURISDICTION PURSUANT TO COLO. R. CIV. P.
12(B)(1)
Decision No. C13-1350
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO
PROCEEDING NO. 13D-0498E
IN THE MATTER OF THE VERIFIED PETITION OF PUBLIC SERVICE COMPANY OF
COLORADO FOR CERTAIN DECLARATORY ORDERS CONCERNING THE RIGHTS OF
PUBLIC SERVICE COMPANY OF COLORADO UNDER ITS SERVICE TERRITORY
CERTIFICATE COVERING BOULDER COUNTY, COLORADO.
DECISION ISSUING DECLARATORY RULINGS
Mailed Date: October 29, 2013
Adopted Date: October 9, 2013
TABLE OF CONTENTS
I. BY THE COMMISSION .........................................................................................................2
A. Statement ...........................................................................................................................2
B. Public Service’s Requests for Declaratory Orders ............................................................3
C. Positions of the Parties and Amici. ....................................................................................4
D. Discussion ..........................................................................................................................6
1. Commission Jurisdiction to Hear this Matter .............................................................6
2. Ripeness .....................................................................................................................7
a. The Commission’s Regulatory Authority Over a Municipal Utility Serving
Outside its Territorial Boundaries. ......................................................................9
b. Commission Proceedings Addressing Transfer of Public Service’s CPCN and
Other Property ...................................................................................................12
E. Conclusion .......................................................................................................................14
II. ORDER ...................................................................................................................................15
A. The Commission Orders That: ........................................................................................15
B. ADOPTED IN COMMISSIONERS’ WEEKLY MEETING October 9, 2013. .............16
Colorado PUC E-Filings System
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1350 PROCEEDING NO. 13D-0498E
2
I. BY THE COMMISSION
A. Statement
1. On May 9, 2013, Public Service Company of Colorado (Public Service) filed a
Verified Petition for Declaratory Orders (Petition) pursuant to Rules 1001 and 1304(i) of the
Commission's Rules of Practice and Procedure, 4 Code of Colorado Regulations 723-1, and
Colorado Rule of Civil Procedure 57. The Petition requests that the Commission enter
declaratory rulings relating to actions of the City of Boulder (Boulder) to municipalize and
provide electricity services to customers located in unincorporated Boulder County, Colorado.
2. On June 12, 2013, the Commission issued a decision accepting the Petition and
providing notice of the Petition to interested persons.1
3. The Commission granted Boulder’s motion to intervene and noted the
intervention by right of the Colorado Office of Consumer Counsel (OCC). The Commission
denied the motion to intervene filed by Black Hills/Colorado Electric Utility Company, L.P., and
Black Hills/Colorado Gas Utility Company, L.P. (collectively Black Hills); however, the
Commission permitted Black Hills to participate as amicus curiae. The Commission granted the
joint motion to participate as amicus curiae filed by the Colorado Rural Electric Association;
Delta-Montrose Electric Association, Inc.; Holy Cross Electric Association, Inc.; Poudre Valley
Rural Electric Association, Inc.; and United Power, Inc.2 Through this Decision, the Commission
1 Order Accepting Petition for Declaratory Order and Issuing Notice; Decision No. C13-0705, issued
June 12, 2013.
2 Interim Decision: (1) Addressing Interventions and Motion to Participate as Amici Curiae; (2) Granting
Motion for Leave to Reply; and (3) Establishing a Procedural Schedule, Decision No. C13-0875-I, issued July 16,
2013.
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1350 PROCEEDING NO. 13D-0498E
3
denies the motion to intervene filed by the Gunbarrel Energy Future Citizens’ Group,3 but
accepts its filing as public comment.
4. The Commission heard this case en banc.
5. Pursuant to Commission scheduling orders, the parties and amici filed briefs
addressing the issues raised by the Petition. In addition, this Decision grants Boulder’s request
for acceptance of its supplemental authority, filed September 6, 2013, and also grants Public
Service’s request for leave to reply to the supplemental authority, filed September 13, 2013.
B. Public Service’s Requests for Declaratory Orders
6. Public Service’s Petition describes Boulder’s actions and plans to form a
municipal electric utility, condemn Public Service’s facilities, and serve customers located not
only inside Boulder’s city limits, but also outside in unincorporated Boulder County. Public
Service asserts that Boulder expects to obtain these extraterritorial customers through
condemnation of Public Service’s certificate of public convenience and necessity (CPCN) and
facilities that serve unincorporated Boulder County.
7. Paragraph 25 of the Petition requests the Commission enter the following five
declaratory orders:
1) If a municipal utility seeks to serve customers located outside the city's
boundaries, it is subject to the certificate jurisdiction of the Commission;
2) The Commission has already granted to Public Service a certificate of
public convenience and necessity covering the territory in Boulder
3 Because The Gunbarrel Energy Future Citizens’ Group as an association must be represented by a
licensed attorney to participate formally as a party, and because its filing is not signed by and does not identify a
licensed attorney representing the group, the Commission denies its request to intervene as a party. See Rules
1201(a) and (b) of the Rules of Practice and Procedure, 4 Code of Colorado Regulations 723-1; Denver Bar
Association v. Public Utilities Commission, 391 P.2d 467 (1964).
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1350 PROCEEDING NO. 13D-0498E
4
County, outside the Boulder city boundaries, in which the
5,800 customers4 are located;
3) Under Colorado law, there can only be one certificated utility per
geographic area;
4) The certificate of an existing utility cannot be taken away without due
process of law which requires a hearing before this Commission and proof
by substantial evidence that the existing certificated public utility is
unwilling or unable to serve the certificated area; and
5) The need to construct replacement facilities as a result of actions taken by
a challenging utility does not constitute an inability to serve.5
Public Service further explains that it “is simply seeking a clarification that it will not lose its
right to serve out-of-city customers because Boulder creates a municipal utility and condemns
some facilities which currently serve customers both inside and outside the Boulder city limits.”6
8. Public Service is not requesting declaratory rulings addressing Boulder’s
authority to form a municipal utility and serve customers located within Boulder city limits, or its
ability to acquire through condemnation facilities located outside city limits but used to provide
service within the city.7 Public Service’s request for declaratory rulings refers only to its rights to
serve the customers located service outside Boulder’s territorial boundaries.8
C. Positions of the Parties and Amici.
9. Public Service argues that the Commission has the authority to regulate a
municipal utility operating extraterritorially and to resolve service disputes between a
municipality and an existing utility. Public Service also contends that the doctrine of regulated
monopoly, which permits only one certificated utility to serve in an area and requires a new
4 Subsequent filings indicate that the number of customers located in unincorporated Boulder County at
approximately 7,000. See Public Service Response, dated August 15, 2013, at 2.
5 Verified Petition, at ¶ 25.
6 Public Service Reply, at 8.
7 Public Service Response, dated August 15, 2013, at ¶¶ 11-15.
8 Verified Petition, at ¶ 26.
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1350 PROCEEDING NO. 13D-0498E
5
carrier to show that the existing carrier is unable or unwilling to provide adequate service,
governs Boulder’s plans to serve in unincorporated Boulder County. Public Service asserts that a
municipality’s decision to seek condemnation of an existing utility’s CPCN does not override the
Commission’s exclusive jurisdiction over certification of a municipal utility operating its
territorial boundaries. Public Service also argues that the Commission’s determination—of
whether the CPCN and other extraterritorial assets will be transferred to Boulder—should
precede a condemnation action.
10. The OCC and amici curiae support Public Service’s position. They argue that
becoming a municipal utility does not automatically allow Boulder to serve customers located
outside of its municipal boundaries, and that the doctrine of regulated monopoly requires a
showing that Public Service is unwilling or unable to serve the customers at issue, regardless of
whether Boulder’s provisioning of service would be more efficient or technically optimal.
11. Boulder states that as a home rule municipality, it has the authority under
Article XX of the Colorado Constitution to operate an electric utility and to condemn all
necessary facilities and property, whether located inside or outside of its city limits. Boulder
asserts that a CPCN to serve a particular area is a property interest subject to condemnation, and
the district court hearing a condemnation action has the authority to determine Boulder’s need
for the CPCN. Boulder argues that its plans to condemn Public Service’s CPCN as a property
interest distinguish this case from those cited by Public Service recognizing the Commission’s
authority to regulate municipal utilities extraterritorially and apply the doctrine of regulated
monopoly to a new carrier’s encroachment into an existing provider’s territory. Condemnation
of a CPCN would relieve Boulder from the burden of showing that Public Service is unable or
unwilling to serve in unincorporated Bolder County. Boulder admits that it must obtain a
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1350 PROCEEDING NO. 13D-0498E
6
certificate from the Commission to serve extraterritorial customers, but argues that the
condemnation action would precede the Commission’s proceedings for transfer of Public
Service’s certificate, and that the Commission must act consistently with the orders of the district
court condemning the CPCN.
12. Boulder also contends that the public interest standard should apply to the transfer
of Public Service’s certificate, and that its provision of service in unincorporated Boulder County
would be the most efficient, effective, and reliable option. Further, Boulder argues that Public
Service’s request may not be ripe, because Boulder has not decided finally whether to serve
unincorporated Boulder County.
D. Discussion
1. Commission Jurisdiction to Hear this Matter
13. Boulder contends that Articles II and XX of the Colorado constitution authorize
home rule cities to condemn property for the creation and operation of a municipal utility, and
that the district court has jurisdiction over condemnation matters. Thus, Boulder argues, the
district court sitting in condemnation, not the Commission, has the jurisdiction to determine
Boulder’s ability to obtain Public Service’s CPCN to serve unincorporated Boulder County.9
14. We disagree. The Commission has the authority to determine the facts upon which
its jurisdiction may depend and rule on the scope of its jurisdiction.10 The Commission’s
jurisdiction to decide matters has been analogized to that of judicial tribunals: “except in the case
of plain usurpation, a court has the jurisdiction to determine its own jurisdiction.”11
9 Boulder Response, dated August 15, 2013, Part I.C., at 7-9.
10 Keystone v. Flynn, 769 P.2d 484, 488 (Colo. 1989).
11 Id., quoting United States v. United Mine Workers, 330 U.S. 258, 292 n. 57 (1947) (in turn quoting
Carter v. United States, 135 F.2d 858, 861 (5th Cir. 1943)).
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1350 PROCEEDING NO. 13D-0498E
7
The Commission therefore has the authority to hear Public Service’s request for declaratory
rulings regarding Boulder’s attempts to serve unincorporated Boulder County. As shown below,
our rulings do not interpret Boulder’s constitutional or statutory rights to condemn property;
rather, we apply the Commission’s authority under Article XXV of the Colorado constitution and
the public utilities law as interpreted by the Colorado Supreme Court to rule upon Boulder’s
municipal utility service in unincorporated Boulder County.
2. Ripeness
15. Boulder argues that Public Service’s request for declaratory rulings is not ripe,
contending that no final decision has been made on whether its municipal utility will serve
customers in unincorporated Boulder County.12
16. “Ripeness requires that there be an actual case or controversy between the parties
that is sufficiently immediate and real so as to warrant adjudication.”13 “A court may find ‘a
conflict is ripe for judicial review even in the context of uncertain future facts so long as there is
no uncertainty regarding the facts relevant to the dispute and no pending actions that might
resolve the issue prior to the court’s determination.’”14 To be ripe, the court’s or an agency’s
decision must have a “practical effect upon an actual and existing controversy.”15
17. Undisputed facts show that a controversy is sufficiently immediate and that there
is no uncertainty regarding the facts relevant to the dispute. The Boulder City Council passed an
ordinance authorizing the city to acquire the property of Public Service through negotiation or
12 Boulder Reply, dated August 30, 2013, at 3.
13 Beauprez v. Avalos, 42 P.3d 642, 648 (Colo. 2002); See also Developmental Pathways v. Ritter, 178
P.3d 524, 534 (Colo. 2008).
14 Metal Management West, Inc. v. State, 251 P.3d 1164, 1175 (Colo. App. 2010) (quoting Stell v. Boulder
County Dep't of Social Servs., 92 P.3d 910, 915, n.6 (Colo. 2004)).
15 Board of Directors v. Nat'l Union Fire Ins. Co., 105 P.3d 653, 656 (Colo. 2005).
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1350 PROCEEDING NO. 13D-0498E
8
the power of eminent domain. The ordinance authorizes a condemnation action on or after
January 1, 2014.16 Boulder’s engineers have advised the city that it should provide service to
extraterritorial customers.17 Boulder sent letters dated February 15, 2013, to customers located in
unincorporated Boulder County stating that, if it creates a city utility, then it plans on providing
service to residential and business customers located outside the city.18 This letter states that
Boulder has no plans to annex the area outside of Boulder where it seeks to provide service.19
18. A Commission ruling will have a practical effect on an actual and existing
controversy between Public Service and Boulder. Public Service asserts that the Commission
has the authority to apply the breadth of public utilities law to Boulder’s attempt to obtain a
CPCN to serve customers outside its city boundaries; whereas, Boulder contends that the
Commission’s rulings upon a transfer of Public Service’s CPCN to Boulder must await and be
consistent with a court’s condemnation orders. We find that a Commission ruling will instruct
the parties on the legal standards governing their conduct and disputes regarding Boulder’s
actions to obtain Public Service’ CPCN for unincorporated Boulder County. A Commission
ruling also will guide the parties on whether a Commission proceeding should precede a
condemnation action and which property interests and facilities could be used to provide service
and thus may be part of a condemnation action. Therefore, Public Service’s Petition is ripe for
Commission determination.
19. Boulder admits that the first three statements listed in paragraph 25 of the Petition
for which Public Service seeks declaratory rulings—that a municipal utility serving outside its
16 See Response of Public Service, dated August 15, 2013, at 2-3.
17 Boulder Response, at 3-4.
18 Letter from City of Boulder to unincorporated Boulder County customers, dated February 15, 2013,
attached as Exhibit A to Public Service’s Verified Petition.
19 Id.
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1350 PROCEEDING NO. 13D-0498E
9
territorial boundaries is subject to the certificate jurisdiction of the Commission, that Public
Service had been granted a certificate to serve unincorporated Boulder County, and that there can
be only one certificated utility per geographic area—are correct.20 We therefore proceed with
addressing the issues underlying the fourth and fifth statements.
a. The Commission’s Regulatory Authority Over a Municipal
Utility Serving Outside its Territorial Boundaries.
20. Dating back to the 1920s and extending through interpretations of Commission
powers granted by Article XXV, the Colorado Supreme Court repeatedly and consistently has
acknowledged the Commission’s authority to regulate a municipal utility serving customers
located outside its territorial boundaries.21 This rule is premised upon the customers’ ability to
vote on municipal matters. If the services offered by a municipality to its citizens within its
territory are not satisfactory to a majority of the citizens, they can effect a change, either at a
regular election, or by the exercise of the right of recall. 22 In contrast,
When a municipally owned utility provides utility service outside the
municipality, those receiving the service do not have a similar recourse on
election day. They have no effective way of avoiding the possible whims and
excesses of the municipality in the absence of state regulation by the PUC.23
21. The court has elaborated on the Commission’s authority over service area disputes
between a municipal utility and a certificated public utility. “[T]he Utilities Act unmistakably
20 Boulder’s Response, filed August 15, 2013, at 4.
21 Town of Holyoke v. Smith, 226 P. 158 (Colo. 1924); City of Lamar v. Town of Wiley, 248 P. 1009
(Colo. 1926); Public Utilities Commission v. City of Loveland, 289 P. 1090 (Colo. 1930); City and County of Denver
v. Public Utilities Commission, 507 P.2d 871 (Colo. 1973); Board of County Commissioners v. Denver Board of
Water Commissioners, 718 P.2d 235 (Colo. 1886); Poudre Valley Rural Electric Association, Inc. v. City of
Loveland, 807 P.2d 547 (Colo. 1991).
22 Town of Holyoke v. Smith, 226 P. 158, 161 (Colo. 1924); City of Lamar v. Town of Wiley, 248 P. 1009,
1010 (Colo. 1926).
23 K.C. Electric Association, Inc. v. Public Utilities Commission, 550 P.2d at 871, 874 (Colo. 1976). See
also City and County of Denver v. Public Utilities Commission, 507 P.2d at 874; and City of Loveland v. Public
Utilities Commission, 580 P.2d 381, 385 (Colo. 1978) (“the PUC [is] the only protection for the non-resident
customers.”)
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1350 PROCEEDING NO. 13D-0498E
10
and clearly invests the Public Utilities Commission with the sole jurisdiction to hear and
determine, in the first instance, a controversy of this nature.”24 Further,
We believe it is essential that the PUC be allowed to regulate the public utility
services provided by municipalities outside their boundaries. Not only is the PUC
the only protection for the non-resident customers,…but the PUC must also be
allowed the power to resolve jurisdictional disputes between municipalities and
private utilities companies over who is to serve areas outside municipal
boundaries.25
22. The court also has defined a municipality’s status relative to other utilities when it
serves outside its boundaries: “Both upon authority and reason a municipally owned public
utility, as to service furnished consumers beyond its territorial jurisdiction, should be as already
stated, subject to the same regulation to which a privately owned public utility must conform in
similar circumstances."26
23. Boulder’s plans to condemn Public Service’ CPCN to serve unincorporated
Boulder County do not affect the Commission’s authority over the transfer of the CPCN or the
applicable standards. The statute upon which Boulder relies as granting a property interest to a
CPCN, § 40-5-105, C.R.S., conditions any sale or assignment of a CPCN upon Commission
approval and upon such terms and conditions as the Commission may prescribe.27 The court
rulings quoted above in this Decision—recognizing Commission authority to resolve disputes
between municipalities serving outside its boundaries and existing public utilities—also refute
24 Public Utilities Commission v. City of Loveland, 289 P. 1090, 1093 (Colo. 1930).
25 City of Loveland v. Public Utilities Commission, 580 P.2d 381, 385 (Colo. 1978).
26 City and County of Denver v. Public Utilities Commission, 507 P.2d at 874.
27 Section 40-5-105, C.R.S., says:
Certificate or assets may be sold, assigned, or leased. (1) The assets of any public utility,
including a certificate of public convenience and necessity or rights obtained under any such certificate
held, owned, or obtained by any public utility, may be sold, assigned, or leased as any other property, but
only upon authorization by the commission and upon such terms and conditions as the commission may
prescribe….”
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1350 PROCEEDING NO. 13D-0498E
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Boulder’s argument that the potential of an action in condemnation over utility property
diminishes Commission authority.
24. Two Supreme Court cases specifically confirm Commission authority even when
a municipality is planning or has completed condemnation actions. In City and County of
Denver v. Public Utilities Commission,28 the Supreme Court upheld the Commission’s regulatory
authority over Denver’s tramway service outside its boundaries, even after a district court had
completed a condemnation action transferring ownership rights to Denver. In Colorado and
Southern Railway Co., Inc. v. District Court,29 the court ruled that the Commission may exercise
its statutory authority to determine where a railroad may cross the tracks of another, even though
the utility already had filed an action to condemn an easement for the crossing. These cases
demonstrate that, if the public utilities law has granted the Commission regulatory authority over
property or service used by a utility to serve outside its territory boundaries, the Commission
retains its regulatory authority even though the property or service is the subject of a
condemnation action.
25. The doctrine of regulated monopoly governs Boulder’s attempt to serve
unincorporated Boulder County where Public Service is certificated.30 “After a utility has been
assigned a specific territory, no other utility may provide service in that territory unless it is
established that the certificated utility is unable or unwilling to provide adequate service.”31
Evidence that the challenging utility may provide better service or may serve the customers more
28 City and County of Denver v. Public Utilities Commission, 507 P.2d 871 (Colo. 1973).
29 Colorado and Southern Railway Co., Inc. v. District Court, 493 P.2d 657 (Colo. 1972).
30 Public Service Company v. Public Utilities Commission, 765 P.2d 1015, 1021 (Colo. 1988).
31 Id.
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Decision No. C13-1350 PROCEEDING NO. 13D-0498E
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easily cannot be the basis of a finding that the existing utility is unwilling or unable to serve its
certificated area.32
b. Commission Proceedings Addressing Transfer of Public
Service’s CPCN and Other Property
26. Boulder’s briefing argues that a condemnation action for Public Service’s
extraterritorial CPCN should precede any Commission proceedings under § 40-5-105, C.R.S.,
addressing Boulder’s request for the CPCN, and that any resulting Commission orders must be
consistent with a condemnation court’s order awarding ownership to Boulder.33 Public Service
disagrees, asserting that “it is essential that a determination be made, before the condemnation
action, regarding who has the right to serve the out-of-city customers. That information affects
the separation of the two utilities, reconnection costs, the compensation owed in any
condemnation proceeding, and pre-filing good faith negotiations.”34
27. Transfer of Public Service’s CPCN would be required for Boulder to serve
customers in unincorporated Boulder County, and the Commission possesses the statutory power
to determine under § 40-5-105, C.R.S., and under the doctrine of regulated monopoly, whether
Public Service’s CPCN is to be transferred to Boulder. Thus, Commission proceedings
addressing the transfer of Public Service’s CPCN are to precede any actions seeking to condemn
Public Service’s CPCN.
32 Id., at 1022; See also Public Service Company v. Public Utilities Commission, 485 P.2d 123, 127; Public
Utilities Commission v. Poudre Valley Rural Electric Association, 480 P.2d 106, 107 (Colo. 1970).
33 Boulder Response, dated August 15, 2013, at 12-14.
34 Public Service Reply, dated August 30, 2013, at ¶ 7.
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1350 PROCEEDING NO. 13D-0498E
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28. Also under the Commission’s jurisdiction are other types of property, plant, and
equipment used to provide service in unincorporated Boulder County. The Commission
exercises its regulatory authority over Public Service’s transmission and distribution lines,
substations, and other facilities to protect the reliability, safety, and service quality of electricity
services provided to unincorporated Boulder County, and to safeguard the integrity of the system
statewide. If Boulder seeks to condemn facilities, wherever located, that Public Service currently
uses, at least in part, to serve customers located outside of Boulder’s city limits, this Commission
must have the ability to investigate and determine how the facilities should be assigned, divided,
or jointly used to protect the system’s effectiveness, reliability, and safety, as well as any other
matter affecting the public interest. Thus, a Commission proceeding addressing these facilities
should precede a condemnation action to allow the district court to rule on the public need and
value of facilities that the Commission determines may be the subject of transfer to Boulder.
29. Case law also supports Public Service’s position. In Colorado & Southern,35 a
railroad company known as C&W commenced a proceeding in district court to condemn an
easement over tracks owned by two other railroads. C&W selected the easement as suitable for
the crossing. The two other railroads filed a motion to dismiss the district court action, asserting
that C&W first had to secure an order from the Commission as required under the public utilities
law that would determine the point at which C&W may cross the tracks or facilities of other
railroads. The Supreme Court ruled that the district court did not have jurisdiction over the
property easement identified by C&W absent a predetermination by the Commission. Because
35 Colorado and Southern Railway Co., Inc. v. District Court, 493 P.2d 657 (Colo. 1972).
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1350 PROCEEDING NO. 13D-0498E
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the Commission has the power to determine the point of crossing, “[i]t follows logically then that
the commission -- not the railroad -- determines what property the railroad requires.”36 37
E. Conclusion
30. For the reasons stated above, we rule on the fourth and fifth statements listed in
paragraph 25 of Public Service’s Petition by clarifying that the Commission has regulatory
authority over electricity services provisioned by a municipal utility formed by Boulder to
customers located in unincorporated Boulder County, and that the doctrine of regulated
monopoly as delineated by rulings of the Colorado Supreme Court governs any application filed
by Boulder seeking transfer of Public Service’s CPCN. The potential that Boulder may file a
condemnation action to obtain Public Service’s CPCN for unincorporated Boulder County does
not affect the Commission’s regulatory authority, the doctrine of regulated monopoly, or the
standards governing transfer of Public Service’s CPCN. Further, Commission proceedings
addressing the transfer of Public Service’s CPCN or other plant, equipment, and facilities used to
provide service to customers located in unincorporated Boulder County are to be completed
before Boulder initiates a condemnation action for such property.
36 Id., 493 P.2d at 659.
37 The case cited by Boulder, Miller v. Public Service Company of Colorado, 272 P.2d 283 (1954), for the
proposition that its condemnation action for Public Service’s CPCN should precede a Commission proceeding, is
inapposite and has been distinguished by the court in Colorado & Southern. The court in Miller ruled that a utility
was not required to obtain a CPCN from the Commission to construct a facility before the utility filed a
condemnation action to acquire the land upon which the facility was to be built. The court reasoned that the
construction permitted by the CPCN is an act that occurs after the utility obtains ownership of the land. Further, the
court in Miller found that: “[t]he so-called certificate is only a permit or license to use and enjoy land that has been
condemned; it is not a condition precedent to the right to condemn; and has no relationship whatever with the
matter of condemnation.” Miller, 272 P.2d at 285 (emphasis added). The court in Colorado and Southern ruled that
the Miller result—that a condemnation action may precede the Commission’s—did not apply to C&W’s
condemnation of the easement, because the location of crossing point was essential to determining the property to be
condemned and was subject to the Commission’s approval authority. Colorado and Southern, 493 P.2d at 659. The
issue presented in this proceeding mirrors that of Colorado & Southern, in which the property at issue in the
potential condemnation proceeding, Public Service’s extraterritorial CPCN, is the same property over which the
Commission has jurisdiction and approval authority.
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1350 PROCEEDING NO. 13D-0498E
15
II. ORDER
A. The Commission Orders That:
1. The request to intervene filed by the Gunbarrel Energy Future Citizens’ Group is
denied. The filing submitted by the Gunbarrel Energy Future Citizens’ Group on August 8,
2013, will be accepted as public comment.
2. The request of the City of Boulder to accept its Supplemental Authority, filed
September 6, 2013, is granted. The request of Public Service Company of Colorado (Public
Service) for leave to reply to the City of Boulder’s Supplemental Authority, filed September 13,
2013, is granted.
3. The Commission grants the request of Public Service to enter as declaratory
orders the first, second, and third statements listed in paragraph 25 of Public Service’s Verified
Petition for Declaratory Orders (Petition).
4. The Commission enters declaratory rulings addressing the fourth and fifth
statements listed in paragraph 25 of the Petition by clarifying that the Commission has regulatory
authority over electricity services provisioned by a municipal utility formed by the City of
Boulder to customers located in unincorporated Boulder County, and that the doctrine of
regulated monopoly as delineated by rulings of the Colorado Supreme Court governs any
application filed by the City of Boulder seeking transfer of Public Service’s certificate of public
convenience and necessity (CPCN). The potential that the City of Boulder may file a
condemnation action to obtain Public Service’s CPCN does not affect the Commission’s
regulatory authority, the doctrine of regulated monopoly, or the standards governing transfer of
Public Service’s CPCN. Further, Commission proceedings addressing the transfer of Public
Service’s CPCN or other plant, equipment, and facilities used to provide service to customers
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1350 PROCEEDING NO. 13D-0498E
16
located in unincorporated Boulder County are to be completed before the City of Boulder
initiates a condemnation action for such property.
5. The 20-day time period provided by § 40-6-114(1), C.R.S., to file an application
for rehearing, reargument, or reconsideration shall begin on the first day after the effective date
of this Decision.
6. This Decision is effective on its mailed date.
B. ADOPTED IN COMMISSIONERS’ WEEKLY MEETING
October 9, 2013.
(S E A L)
ATTEST: A TRUE COPY
Doug Dean,
Director
THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF COLORADO
JOSHUA B. EPEL
________________________________
JAMES K. TARPEY
________________________________
PAMELA J. PATTON
________________________________
Commissioners
EXHIBIT 4
TO
MOTION TO DISMISS FIRST AMENDED PETITION IN CONDEMNATION FOR
LACK OF SUBJECT MATTER JURISDICTION PURSUANT TO COLO. R. CIV. P.
12(B)(1)
Decision No. C13-1550
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO
PROCEEDING NO. 13D-0498E
IN THE MATTER OF THE VERIFIED PETITION OF PUBLIC SERVICE COMPANY OF
COLORADO FOR CERTAIN DECLARATORY ORDERS CONCERNING THE RIGHTS
OF PUBLIC SERVICE COMPANY OF COLORADO UNDER ITS SERVICE TERRITORY
CERTIFICATE COVERING BOULDER COUNTY, COLORADO.
DECISION DENYING CITY OF BOULDER’S
APPLICATION FOR REHEARING,
REARGUMENT, OR RECONSIDERATION
Mailed Date: December 18, 2013
Adopted Date: December 11, 2013
TABLE OF CONTENTS
I. STATEMENT ...........................................................................................................................1
A. Introduction .......................................................................................................................1
B. Procedural Background and Positions of the Parties .........................................................2
II. DISCUSSION ...........................................................................................................................4
A. Scope of Commission Jurisdiction ....................................................................................4
B. Commission Jurisdiction and Municipal Functions ..........................................................5
C. Sequencing of Commission and Condemnation Proceedings ...........................................9
III. ORDER ...................................................................................................................................14
A. The Commission Orders That: ........................................................................................14
B. ADOPTED IN COMMISSIONERS’ WEEKLY MEETING December 11, 2013. ........14
I. STATEMENT
A. Introduction
1. On November 18, 2013, the City of Boulder (Boulder) filed its Application for
Rehearing, Reargument, or Reconsideration (RRR) of Commission Decision issued on Colorado PUC E-Filings System
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Decision No. C13-1550 PROCEEDING NO. 13D-0498E
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October 29, 2013 (Decision). Boulder’s RRR challenges the Decision’s rulings clarifying the
Commission’s jurisdiction to conduct approval proceedings of the proposed transfer from Public
Service Company of Colorado (Public Service) to Boulder of certifications, assets, and facilities
used to provide electricity services to customers located outside Boulder’s territorial limits in
unincorporated Boulder County. Boulder’s RRR also opposes the requirement to obtain
Commission approval before Boulder commences a condemnation action over regulated property
rights. Because Colorado Supreme Court precedent interpreting Article XXV of the state
constitution and the public utilities law validates Commission jurisdiction to approve the transfer
of regulated property before a condemnation court acquires subject matter jurisdiction over the
property, the Commission denies Boulder’s RRR.
B. Procedural Background and Positions of the Parties
2. We incorporate the Decision’s description of the procedural history of this case,
including Public Service’s petition for declaratory ruling, intervention by Boulder and the Office
of Consumer Counsel, grants of amicus status, and the positions of parties and amici.1
3. The Decision issued declaratory rulings clarifying the Commission’s jurisdiction
under the state constitution and the public utilities law to regulate Boulder’s certification as a
municipal utility to provide electricity services to customers located in unincorporated Boulder
County. The Decision also declares the Commission has the authority to conduct approval
proceedings over Boulder’s proposed acquisition of assets and facilities owned and used by
Public Service to provide service outside the city. Citing Colorado and Southern,2 the Decision
requires Boulder to obtain Commission approval before a condemnation action could commence.
1 Decision, issued October 29, 2013, at ¶¶ 1-12.
2 Colorado and Southern Railway Co., Inc. v. District Court, 493 P.2d 657 (Colo. 1972).
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Decision No. C13-1550 PROCEEDING NO. 13D-0498E
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4. Boulder’s RRR challenges the following ruling from paragraph 28 of the
Decision:
If Boulder seeks to condemn facilities, wherever located, that Public Service
currently uses, at least in part, to serve customers located outside of Boulder’s city
limits, this Commission must have the ability to investigate and determine how
the facilities should be assigned, divided, or jointly used …. Thus, a Commission
proceeding addressing these facilities should precede a condemnation action to
allow the district court to rule on the public need and value of facilities that the
Commission determines may be the subject of transfer to Boulder.
(emphasis added by Boulder).
Boulder requests the deletion of paragraph 28 from the Decision. According to the RRR,
selection of facilities for condemnation is a “municipal function,” and the Decision impairs
Boulder’s ability as a home rule city to form a municipal utility and condemn plant and facilities
it deems necessary. Boulder also objects to the Decision’s application of the Colorado and
Southern case requiring Commission approval of any acquisition of regulated property rights
from Public Service before Boulder files a condemnation action.
5. Boulder’s RRR “recognizes the authority of the Commission over service
provided by a municipal electric utility to customers located outside the jurisdictional boundaries
of the municipality,”3 and indicates it “will file all applicable applications for transfer.”4 Boulder
argues, however, “Commission’s approval of an application for transfer is not the same as the
Commission’s deciding what property rights may be transferred and when the transfer may
occur.”5
6. By leave of the Commission, Public Service filed a response to Boulder’s RRR on
December 3, 2013. Public Service requests denial of Boulder’s RRR and provides argument and
3 Boulder RRR, at 3.
4 Id., at 5-6.
5 Id., at 6.
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1550 PROCEEDING NO. 13D-0498E
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citations to the state constitution, the public utilities law, and Colorado case law in support of
Commission regulatory authority over extraterritorial electricity services.
II. DISCUSSION
A. Scope of Commission Jurisdiction
7. The Decision defines the Commission’s jurisdiction over Boulder’s municipal
utility to encompass certifications, assets, and facilities used to provide electricity to customers
located outside Boulder’s territorial boundaries. The Decision does not suggest or imply
Commission jurisdiction over services Boulder’s utility may provide within the city.
Paragraph 28 of the Decision, the object of Boulder’s RRR, also is limited to facilities and assets
used to provide extraterritorial services.
8. Despite these definitions of the scope of Commission authority, Boulder’s RRR
causes us to question whether it is addressing Commission jurisdiction over municipal services
provided inside, or outside, the city. Boulder’s RRR on occasion references extraterritorial
matters; however, the vast majority of the RRR discusses municipal powers in general terms, and
cases cited by the RRR address municipal functions to provide services within the municipality,
not outside.
9. The Commission reiterates its assertion of regulatory authority over the
certifications, assets, and facilities, wherever located, used by Public Service at least in part to
provide electricity service to customers outside Boulder city limits. The Commission does not
assert regulatory authority over Boulder’s efforts to form a utility or over facilities and plant,
wherever located, used only to provide service to customers within Boulder’s municipal territory.
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Decision No. C13-1550 PROCEEDING NO. 13D-0498E
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B. Commission Jurisdiction and Municipal Functions
10. Boulder argues in its RRR that selection of certifications, facilities, and other
property rights for condemnation is a municipal function beyond the Commission’s jurisdiction.
Boulder’s primary citation for this proposition is the 1926 case of Public Service v. City of
Loveland,6 in which the city sought to condemn Public Service’s distribution system used to
provide service to Loveland’s residents.7 Public Service challenged Loveland’s ability to acquire
ownership through eminent domain proceedings and also protested the city’s unwillingness to
condemn a substation and real estate located within the town. The Court in Public Service v.
City of Loveland ruled that the town has the authority to condemn facilities, and the selection of
which facilities to condemn is a municipal function Public Service could not override. Boulder’s
RRR also relies upon City of Thornton v. Farmers Reservoir & Irrigation Co.,8 arguing a home
rule city has constitutionally-granted powers to condemn “within or without its territorial limits,”
to acquire utilities “and everything required therefore.”9
11. Neither Public Service v. City of Loveland nor City of Thornton addresses the
Commission’s jurisdiction over regulated services provided by a municipal utility to customers
located outside territorial boundaries. These cases do not diminish the multitude of Supreme
Court cases and their citations to article XXV of the Colorado constitution and the public utilities
law granting the Commission regulatory authority over services provided to customers located
6 Public Service Company v. City Of Loveland, 245 P. 493 (Colo. 1926).
7 The distribution system in Loveland also served “a few customers located adjacent to or in close
proximity with the city.” Public Service raised no objections before the Supreme Court to Loveland serving
customers located outside the city, and the Court did not address any issues defining either the municipality’s or the
Commission’s authority over facilities used to provide service outside city limits.
8 City of Thornton v. Farmers Reservoir & Irrigation Co., 575 P.2d 382 (1978).
9 Id., 575 P.2d at 388-899 (emphasis that of the Court).
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1550 PROCEEDING NO. 13D-0498E
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outside city limits. Our Decision lists these cases and their holdings,10 examples of which
include the following:
· “When the city became a public utility under the statute, it had no superior right
as to territory outside of its municipal boundaries over the rights of any other
public utility, private corporation or otherwise, authorized to furnish service.”11
· In the 1930 case in which the City of Loveland extended its facilities to serve
customers outside the city’s boundaries, the Court stated: “the Utilities Act
unmistakably and clearly invests the Public Utilities Commission with the sole
jurisdiction to hear and determine, in the first instance, a controversy of this
nature.”12
· In the 1978 City of Loveland case, the court stated: “We believe it is essential that
the PUC be allowed to regulate the public utility services provided by
municipalities outside their boundaries. Not only is the PUC the only protection
for the non-resident customers,…but the PUC must also be allowed the power to
resolve jurisdictional disputes between municipalities and private utilities
companies over who is to serve areas outside municipal boundaries.”13.
12. None of the other cases cited in Boulder’s RRR impair Commission authority to
regulate services provided by a municipal utility outside city boundaries.14
13. Boulder’s citations also do not reconcile the Court’s ruling in City and County of
Denver v. Public Utilities Commission,15 in which the Court upheld the Commission’s regulatory
authority over Denver’s provision of tramway services outside its boundaries, even after a
10 Decision, issued October 29, 2013, at ¶¶ 20-22.
11 Public Utilities Commission v. City of Loveland, 289 P. 1090, 1094 (Colo. 1930).
12 Id., 289 P. at 1093 (emphasis added).
13 City of Loveland v. Public Utilities Commission, 580 P.2d 381, 385 (Colo. 1978) (emphasis added).
14 In Colorado Cent. Power Co. v. City of Englewood, 89 F.2d 233 (10th Cir. 1937), cited in Boulder’s
RRR, a private utility challenged the city’s condemnation of facilities located outside the city and part of the system
supplying electricity inside and outside of the city. The federal appeals court held that the city may condemn
extraterritorial facilities to serve customers within the city. The utility also argued condemnation of such facilities
amounted to an effort to generate, distribute, and sell electricity outside the city without first having obtained a
certificate of convenience and necessity from the PUC. The court ruled: “Whether the city is required to obtain such
a certificate cannot be determined on the complaint of a private suitor. It may be inquired into only on the complaint
of the state or the commission.” Thus, the federal appeals court did not address Commission jurisdiction to regulate
any efforts by the City of Englewood to provide extraterritorial service.
15 City and County of Denver v. Public Utilities Commission, 507 P.2d 871 (Colo. 1973).
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1550 PROCEEDING NO. 13D-0498E
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district court had completed a condemnation action transferring ownership rights of the system to
Denver.
14. Characterizing the selection of facilities for condemnation as a “municipal
function” does not undermine the scope of Commission jurisdiction over certifications and
facilities used to serve extraterritorial customers. In the 1978 City of Loveland v. PUC case,16 the
Court characterized the setting of rates by a city utility for its inhabitants as a “municipal
function”;17 however, when the city performed the same function for extraterritorial customers, it
was subject to the Commission’s jurisdiction.18 Also, in Colorado and Southern Railway Co.,
Inc. v. District Court,19 in which a railway company attempted to condemn property for a railroad
crossing, the Court referenced the Commission’s authority to approve the location of railway
crossings and stated “the commission – not the railroad -- determines what property the
railroad requires.”20
15. Boulder’s RRR reflects an intention to initiate condemnation proceedings over
Public Service’s certificate of public convenience and necessity (CPCN) before obtaining the
Commission’s formal approval: “Because a CPCN is a property right, whether a CPCN will be
included in a city’s petition in condemnation is likewise a matter within the purview of the city
to determine.”21 A major issue addressed in the briefing of parties and amici prior to issuance of
the Decision was Boulder’s ability to condemn Public Service’s CPCN for service in
unincorporated Boulder County. The Decision, citing the Commission’s authority to approve
16 City of Loveland v. Public Utilities Commission, 580 P.2d 381 (Colo. 1978).
17 Id., 580 P.2d at 384.
18 Id., 580 P.2d at 384-85.
19 Colorado and Southern Railway Co., Inc. v. District Court, 493 P.2d 657 (Colo. 1972).
20 Id., 493 P.2d at 659 (emphasis added).
21 Boulder RRR at 7.
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1550 PROCEEDING NO. 13D-0498E
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and regulate CPCN transfers, held that Boulder must obtain Commission approval of any
proposed acquisition of Public Service’s CPCN to serve extraterritorial customers.22 Boulder’s
RRR does not cite any cases or other legal authorities placing this holding into question.
16. Boulder’s RRR at times acknowledges Commission authority over CPCNs and
services provided to extraterritorial customers; however, its RRR minimizes this authority by
suggesting it will satisfy this requirement by simply working and coordinating with the
Commission and Public Service to identify which facilities should be acquired and condemned.23
Boulder also attempts to reduce the extent of Commission approval authority:
“[T]he Commission’s approval of an application for transfer is not the same as the Commission’s
deciding what property rights may be transferred and when the transfer may occur.”24
17. Negotiation and coordination among Boulder, Public Service, and other interested
entities and agency staffs are encouraged to reduce the scope of disputed issues and conserve
administrative and judicial resources. Informal negotiations, however, do not supplant formal
Commission approvals required by statute. Further, an inability to determine which property
rights may be acquired conflicts with the Commission’s constitutional and statutory duties to
regulate the transfer of certification, assets, and facilities used to provide service to
extraterritorial customers.
18. Boulder contends that pre-approval proceedings before the Commission will deny
Boulder of its right to conduct discovery pursuant to the rules of civil procedure applicable to
22 Decision, issued October 29, 2013, at ¶¶ 23-24 (citing City and County of Denver v. Public Utilities
Commission, 507 P.2d 871 (Colo. 1973), and Colorado and Southern Railway Co., Inc. v. District Court, 493 P.2d
657 (Colo. 1972)).
23 Boulder RRR at 3, 10.
24 Id., at 6.
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1550 PROCEEDING NO. 13D-0498E
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eminent domain actions.25 The Commission’s procedural rules provide Boulder with the same
mechanisms to conduct discovery through written interrogatories, requests for production of
documents, and depositions.26 Boulder also objects to delays resulting from Commission
approval proceedings.27 Commission rules allow parties to request expedited proceedings, which
accelerate discovery responses and hearing schedules.28 The Commission will process and
decide the matter as efficiently as the issues and the public interest allow.
19. Regulatory oversight of the assets, plant, and facilities used to provide electricity
outside Boulder’s territorial boundaries advances important public interests. Public Service
constructs, engineers, and operates its network as an integrated system, and its service
capabilities cross the political boundaries defining the City of Boulder and Boulder County.
Performance of the Commission’s duty to ensure the reliability of the system for unincorporated
Boulder County and other regions of the state requires an evaluation and determination of the
optimal division, joint use, and potential replacement of assets and facilities providing services
both inside and outside Boulder city limits.
C. Sequencing of Commission and Condemnation Proceedings
20. The Supreme Court’s Colorado and Southern case29 governs the sequencing of
Commission and condemnation proceedings of property subject to Commission regulation. In
Colorado and Southern, a railway company commenced a condemnation action for an easement
over railroad tracks. The public utilities law granted the Commission “the power to determine
25 Id., at 13.
26 4 Code of Colorado Regulations (CCR) 723-1-1405 of the Commission’s Rules of Practice and
Procedure.
27 Boulder RRR, at 9-10.
28 4 CCR 723-1-1302(c), 1405(i).
29 Colorado and Southern Railway Co., Inc. v. District Court, 493 P.2d 657 (Colo. 1972).
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1550 PROCEEDING NO. 13D-0498E
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what property the condemning railroad can use as the ‘particular point of crossing.’”30 The Court
issued two holdings applicable to Boulder’s RRR: first, because the Commission has the
statutory power to determine the point of crossing, “[i]t follows logically then that the
commission -- not the railroad -- determines what property the railroad requires”;31 and second,
absent Commission approval, the district court sitting in condemnation did not have jurisdiction
over the subject matter of the case.32 Under Colorado and Southern, Commission approval
proceedings over regulated property is a condition precedent to a condemnation action over the
subject property.33
21. Boulder’s RRR attempts to distinguish Colorado and Southern. Boulder first
argues that the statute cited in Colorado and Southern authorized the Commission to approve the
property at issue, whereas, according to Boulder, “Here, there is no such statute. No statute
grants this Commission the power to determine, order, and prescribe which property a
municipality may seek to condemn in order to create a municipal utility.”34
22. Two public utilities law provisions prove otherwise and authorize Commission
approval of the transfer of property and facilities providing regulated services. As cited in the
Decision, § 40-5-105(1), C.R.S., requires Commission approval of the sale, assignment, or lease
of assets of a public utility, including any CPCN. This statute also permits the Commission to
30 Id., 493 P.2d at 659.
31 Id.
32 Id., 493 P.2d at 659-60.
33 Id., 493 P.2d at 658-60.
34 Boulder RRR, at 11.
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1550 PROCEEDING NO. 13D-0498E
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prescribe the terms and conditions of approval.35 The transfer of ownership through
condemnation means to “purchase” or to “acquire,”36 which is a “sale,” and thus a transfer of
facilities used to provide electricity service outside territorial limits is within Commission
purview under § 40-5-105(1), C.R.S. Despite arguing no statute grants the ability of the
Commission to conduct approval proceedings, Boulder in other portions of its RRR concedes
regulatory approval authority over property it may wish to condemn.37
35 § 40-5-105, C.R.S., says:
Certificate or assets may be sold, assigned, or leased. (1) The assets of any public
utility, including any certificate of public convenience and necessity or rights obtained under any
such certificate held, own, or obtained by any public utility, may be sold, assigned, or leased as
any other property, but only upon authorization by the commission and upon such terms and
conditions as the commission may prescribe; except that this section does not apply to assets that
are sold, assigned or leased:
(a) In the normal course of business: or
(b) [Describing circumstances applying only to telecommunications service providers]
36 See Article XX, Section 1 (extended to home rule cities by Article XX, Section 1), which says:
[The City and County of Denver] … shall have the power, within or without its territorial
limits, to construct, condemn and purchase, purchase, acquire, lease, add to, maintain, conduct,
and operate water works, light plants, power plants, transportation systems, heating plants, and
any other public utilities or works or ways local in use and extent, in whole or in part, and
everything required therefore, for the use of said city and county and the inhabitants thereof, and
any such systems, plants, or works or ways, or any contracts in relation or connection with either,
that may exist and which said city and county may desire to purchase, in whole or in part, the
same or any part thereof may be purchased by said city and county which may enforce such
purchase by proceedings at law as in taking land for public use by right of eminent domain….
37 See, for example, Boulder RRR at 3 (“The transfer of a CPCN, which is a property right subject to
condemnation, cannot take place without the Commission’s approval….While Boulder recognizes the authority of
the Commission over service provided by a municipal electric utility to customers located outside the jurisdictional
boundaries of the municipality, Boulder respectfully submits that the Decision misapprehended certain points of
law, as discussed below, and requests that the Commission reconsider its Decision.”), and 5-6 (“Once Boulder
determines that it may form a retail electric utility in compliance with its Charter requirements and it, in fact, does
so, Boulder will file all applicable applications for transfer.”).
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1550 PROCEEDING NO. 13D-0498E
12
23. The emphasis in Boulder’s RRR upon facilities, and the potential for interference
with Public Service’s system, invokes a second provision of the public utilities law,
§ 40-5-101(1)(b), C.R.S. It says:
If a public utility, in constructing or extending its line, plant, or system, interferes,
or is about to interfere, with the operation of the line, plant, or system of any other
public utility already constructed, the commission, upon complaint of the public
utility claiming to be injuriously affected, after hearing, may prohibit the
construction or extension or prescribe just and reasonable terms and conditions
for the location of the lines, plants, or systems affected.
Boulder acts as a “public utility” under Commission regulation when it operates outside
territorial limits.38 Any extension of Boulder’s system interfering with Public Service’s
provisioning of service to extraterritorial customers is within this statute, and the Commission
may prohibit the extension or prescribe just and reasonable terms for the location of the lines,
plant, or systems affected.
24. Independent of these two statutory authorizations is the Commission’s
constitutional mandate over regulated property and services, as recognized by the Court:
Article XXV of the Colorado Constitution vests in such agency as the General
Assembly may designate all power to regulate the facilities, service, rates, and
charges of every public utility operating within Colorado. See Colo. Const. art.
XXV. Through the Public Utilities Law, 40-1-101 to 40-7-117, 11 C.R.S. (1998),
the General Assembly has assigned to PUC the authority "to do all things,
whether specifically designated in articles 1 to 7 of this title or in addition
thereto, which are necessary or convenient in the exercise of such power."
40-3-102, 11 C.R.S. (1998). Accordingly, PUC has power to accomplish
functions delegated to it by the Public Utilities Law and article XXV.39
25. Boulder’s attempt to minimize the precedential value of Colorado and
Southern—by arguing the public utilities law does not contain a specific statute authorizing the
38 Public Utilities Commission v. City of Loveland, 289 P.2d 1090, 1094 (Colo. 1930).
39 Public Service Company of Colorado, v. Trigen-Nations Energy Company, L.L.L.P., 982 P.2d 316, 322
(Colo. 1999).
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1550 PROCEEDING NO. 13D-0498E
13
Commission to select property for condemnation of a municipal utility—is of no consequence.
In Colorado and Southern, the approval statute at issue also did not reference or grant
Commission authority to select facilities for condemnation; rather, as here, the statute granted the
Commission general approval powers over the subject property.40 The approval statutes
governing the acquisition of Public Service’s assets by Boulder are comparable to the crossing
approval statute in Colorado and Southern.
26. Boulder’s second attempt to distinguish Colorado and Southern is to attach
significance to the demands of the condemning railway in that case to take immediate
possession, in contrast to Boulder’s commitment not to take possession of Public Service’s assets
until after the condemnation action (but by implication before obtaining Commission approval).
The language and reasoning of Colorado and Southern do not support Boulder’s contention.
The condemnation action was prohibited from proceeding not because of the demand for
immediate possession, but because the district court lacked subject matter jurisdiction over the
property absent Commission approval of the crossing pursuant to the public utilities law.41
40 As quoted by the Court in Colorado and Southern, the approval statute at issue stated:
The [public utilities] commission shall have power to determine, order, and prescribe,
in accordance with the plans and specifications to be approved by it, the just and reasonable
manner including the particular point of crossing at which the tracks or other facilities of any
railroad corporation may be constructed across the tracks or other facilities of any other railroad
corporation at grade, or above or below grade; and to determine, order, and prescribe the terms
and conditions of installation and operation, maintenance, and protection of all such crossings
which may now or hereafter be constructed to the end, intent, and purpose that accidents may be
prevented and the safety of the public promoted. 493 P.2d at 658-59.
41 Colorado and Southern, 493 P.2d at 658-60.
Before the Public Utilities Commission of the State of Colorado
Decision No. C13-1550 PROCEEDING NO. 13D-0498E
14
III. ORDER
A. The Commission Orders That:
1. The City of Boulder’s Application for Rehearing, Reargument, or
Reconsideration of Decision No. C13-1350, filed November 18, 2013, is denied.
2. This Decision is effective on its mailed date.
B. ADOPTED IN COMMISSIONERS’ WEEKLY MEETING
December 11, 2013.
(S E A L)
ATTEST: A TRUE COPY
Doug Dean,
Director
THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF COLORADO
JOSHUA B. EPEL
________________________________
JAMES K. TARPEY
________________________________
PAMELA J. PATTON
________________________________
Commissioners
EXHIBIT 5
TO
MOTION TO DISMISS FIRST AMENDED PETITION IN CONDEMNATION FOR
LACK OF SUBJECT MATTER JURISDICTION PURSUANT TO COLO. R. CIV. P.
12(B)(1)
AGREEMENT FOR PAYMENT OF COSTS
THIS AGREEMENT FOR PAYMENT OF COSTS (this "Agreement"), is entered into
this ~ay of £A'jj) be~( 2018, between the City of Boulder, a Colorado home rule city
(the "City" or "Boulder"), and Public Service Company of Colorado, a Colorado corporation, its
successors and assigns ("PSCo" or "Public Service"). The City and PSCo may hereinafter be
referred to individually as a "Party" or collectively as the "Parties."
RECITALS
A. In PUC Proceeding No. 15A-0589E (the "PUC Proceeding"), the Colorado
Public Utilities Commission ("PUC" or "Commission") approved the designation of assets for
transfer outside of the six substations at issue in the PUC Proceeding, subject to Boulder
satisfying three conditions, the third one of which is to file an agreement (or multiple
agreements) between Boulder and Public Service that address( es) "the payment by Boulder to
Public Service of the costs incurred by Public Service to effectuate the separation of the
systems." Decision No. Cl 7-0750 (the "Decision"), at Paragraph VIII.A.2. Details regarding the
agreement were specified by the Commission in paragraphs 157 through 160 of the Decision. As
used in this Agreement and consistent with the Decision, the reference to "separation of the
systems" means the Separation Work and Cut-Over Work related to only the Distribution Assets
Outside Substations as defined herein.
B. The Parties have entered into an Interim Agreement for Payment of Certain
Municipalization Costs (Conditions) dated February 28, 2018 (the "Interim Cost Agreement")
to commence various portions of the Conditions Work prior to execution of this Agreement.
C. The Parties intend that this Agreement, together with the Interim Cost Agreement,
satisfy the third PUC Condition in Paragraph VIII.A.2 of the Decision. The third condition is
more specifically described in Paragraph 157 of the Decision as a condition "to the designation
of the assets for transfer outside the substations." In that context, this Agreement addresses (1)
the payment by Boulder of costs incurred by Public Service to effectuate the separation of the
systems; (2) the reimbursement by Boulder of costs incurred by Public Service associated with:
(a) Boulder's compliance with the PUC's conditions, (b) the development of scope of work
documents and detailed design drawings and specifications, ( c) new construction and
reconfiguration work costs incurred by Public Service to effectuate the separation of the systems;
(3) how Public Service will recover from Boulder the costs that will be incurred to restore the
two systems to a single electric system if Boulder changes its mind about municipalization after
construction and separation activities have begun; (4) responsibilities for repair and replacement
of existing facilities ( outside substations) while Public Service is providing service to customers
within Boulder; (5) how failures and damages will be addressed after the date value is
established in the condemnation case and up to the Cut-Over Date; and (6) any other final "true
up" at the Cut-Over Date not otherwise addressed by the condemnation court.
D. The intent of this Agreement is to address the matters set forth in Recital C above,
which pertain to Distribution Assets Outside Substations. The Parties intend that matters outside
of the scope set forth in Recital C above, including, but not limited to, matters pertaining to
4500267.1 Colorado PUC E-Filings System
substations, will be addressed in other agreements between the Parties, as applicable, or by
amendment(s) to this Agreement.
E. PSCo and the City desire to cooperate with each other in moving forward in an
orderly, timely and efficient manner to ensure the safety, reliability, and effectiveness of the
PSCo System.
Therefore, the Parties incorporate these Recitals into this Agreement, and agree as
follows:
I. Definitions
Boulder System means the electric distribution system to be created, including existing
facilities and new construction, which will serve Boulder customers within the Boulder city
limits separate from the electric distribution system PSCo will use to serve its customers after the
Cut-Over Date.
Capital Costs means those costs recorded by PSCo in the ordinary course of its public
utility business as capital costs. In general, it is anticipated that these costs will be recorded in
FERC capital accounts including, but not limited to, Distribution Plant Accounts 361-373,
pursuant to the FERC Uniform System of Accounts and the capitalization requirements outlined
in the Xcel Energy Capitalization Policy.
Clerical Error means a typographical numerical error in a Payment Request, a
computational error in a Payment Request or an entry error in a Payment Request, such as an
entry that is for another activity and not for Costs under this Agreement.
Commission has the meaning as defined in Recital A.
Condemnation Case refers to an eminent domain proceeding that may be filed by the
City against PSCo to acquire certain portions of PSCo's existing distribution system and
property for the Boulder System.
Conditions Work means the work required to satisfy the PUC conditions as described in
paragraphs 151 through 160 and Paragraph VIII. A.2 of the Decision.
Costs mean the actual costs incurred by PSCo pursuant to this Agreement to effectuate
the separation of its Existing System based upon (I) the Fully Loaded Costs (defined below)
incurred by PSCo for its internal resources; (2) costs of materials (including purchasing and
warehousing overheads as described in PSCo's Commission-approved Cost Assignment and
Allocation Manual, the current version of which has been made available to the City); (3) costs
incurred under contracts with third-party contractors and vendors; (4) costs identified by the
PUC in Paragraphs 157 through 160 of the Decision; (5) legal expenses to the extent provided
for in Paragraph I of Section II below; and (6) any other costs covered by the Interim Cost
Agreement and this Agreement.
2
Costs Estimates mean the non-binding good faith estimates of Costs PSCo expects to
incur as provided for in this Agreement.
Cut-Over Date refers to the date when the separation of the Boulder System from the
PSCo System is complete, so that (1) PSCo's System has the same safety, reliability and
effectiveness as it did prior to the commencement of Separation activities; (2) the PSCo System
and the Boulder System can each be operated separately from the other; and (3) Boulder is ·
willing and able to begin serving all of its customers.
Cut-Over Period means the period of time during which the Cut-Over Work 1s
undertaken and completed.
Cut-Over Work refers to the activities after the Separation Work is completed that are
necessary for the PSCo System and the Boulder System to be operated separately from each
other.
Detailed Design Drawings mean the package of drawings, equipment, construction
specifications and any other documentation created by each Party to be furnished to their
respective construction personnel and contractors in order for them to undertake the Separation
Work. Detailed Design Drawings for the Separation Work to be performed by PSCo also
include PSCo' s Scope of Work documents.
Dispute means a good faith claim made by either Party in writing to the extent, and only
to the extent, permitted under this Agreement.
Dispute Notice means a written identification of a Dispute containing the information
required by this Agreement.
Dispute Resolution Process means the process described in Section V below.
Distribution Assets Outside Substations means the existing distribution assets and
property, both real and personal, outside of substations that were the subject of the PUC
Proceeding, and any new distribution assets outside substations, both real and personal, that will
be constructed in connection with Separation, and include the portion of distribution feeders
located inside substations that originate at the breakers and exit the substation.
Existing System means PSCo's Distribution Assets Outside Substations, which presently
serve customers both within and outside the Boulder city limits.
Force Majeure refers to the inability to perform an obligation of this Agreement, as a
result of a cause that could not be reasonably anticipated by a Party or is beyond its reasonable ·
control after exercise of commercially reasonable efforts to perform, including but not limited to
fire, strike, war, riots, terrorist acts, acts of governmental authority ( other than the City), acts of
God, floods, epidemics, quarantines, labor disputes, unavailability or shortages of materials or
equipment or failures or delays in the delivery of materials.
3
Fully Loaded Costs means PSCo's direct labor costs, which include labor-related benefit
loadings (including administrative and general expenses, facility costs, lost time, payroll taxes,
pension and benefit costs, insurance expenses, and workers compensation costs) in effect at the
time such direct labor costs are incurred. These amounts are subject to change.
Go/No Go Decision means the pre-Separation decision by the City to move forward with
Municipalization, after a Condemnation Case, or an agreement in lieu of a Condemnation Case
regarding acquisition of PSCo property interests, and after the City otherwise has sufficient
information, in its sole discretion, including cost information, to decide whether to move forward
with Municipalization; and, if the City decides Municipalization should move forward, the term
"Go/No Go Decision" also includes all necessary decisions by Boulder voters.
Good Utility Practice means any practices, methods, and acts engaged in or approved by
a significant portion of the electric utility industry during the relevant time period, or any of the
practices, methods, and acts which, in the exercise of reasonable judgment, in light of the facts
known at the time the decision was made, could have been expected to accomplish the desired
result at a reasonable cost consistent with good business practices, reliability, safety and
expedition. Good Utility Practice is not intended to be limited to the optimum practice, method,
or act to the exclusion of all others, but rather to be acceptable practices, methods, or acts
generally accepted in the region, including those practices required by Federal Power Act
Section 215(a)(4). The term "Good Utility Practice" describes a minimum measure of quality
and not a maximum measure of quality.
Gross Negligence or Willful Misconduct of PSCo means any act, omission, or failure
to act by PSCo in connection with this Agreement that was intended to cause harm to, or was in
reckless disregard of, or wanton indifference to, the financial interests of Boulder.
Municipalization means all activities required for Boulder to own and operate the
Boulder System separately from the PSCo System.
Payment Due Date means the date that is thirty (30) days after submittal by PSCo of a
Payment Request to Boulder. In the event a Payment Due Date falls on a weekend or federal
banking holiday, the Payment Due Date shall be the next business day.
Payment Request means a written request, which may be via email or in accordance
with Section VII.M. of this Agreement, including the items required in this Agreement, for
payment conveyed by PSCo to Boulder for reimbursement by Boulder of Costs incurred prior to
the date of the Payment Request.
Pre Go/No Go Decision Work means all work covered by this Agreement to be
completed before the Go/No Go Decision.
Proprietary Information means all ( 1) information submitted by PS Co to Boulder under
this Agreement, or one or more non-disclosure agreements, that it marks as confidential or
4
proprietary, including information in a Payment Request; (2) information which should have
been identified as confidential when disclosed to Boulder or its representative, upon notification
that such information should have been marked as confidential or proprietary; and (3)
information of either Party protected from disclosure by applicable law, including without
limitation, the Colorado Open Records Act, applicable PUC rules and the Homeland Security
Act.
PSCo System means the electric distribution system to be created, including existing
facilities and new construction, in accordance with the Decision, that will serve PSCo customers,
separate from the Boulder System.
PSCo Work, within the scope of this Agreement, means the work necessary to design,
engineer and construct new Distribution Assets Outside Substations required for the PSCo
System and to design, engineer and reconfigure the Existing System as necessary to effectuate
Separation.
Scope of Work means the standard documents Public Service prepares prior to having
Detailed Design Drawings prepared and in sufficient detail to provide designers information to
produce Detailed Design Drawings. Examples of Scope of Work were provided by PSCo in the
PUC Proceeding at pages 1-6 of Attachment CSN-18 and pages 1-6 of Attachment CSN-19.
Security means the instrument meeting the requirements of this Agreement that binds a
financial institution to pay PSCo in the event the City does not pay PSCo as provided in Section
IV below.
Separation means the creation of the Boulder System and the PSCo System.
Separation Period means the period of time during which the Separation Work 1s
commenced and completed.
Separation Work means the construction by PSCo and Boulder of their respective new
Distribution Assets Outside Substations and the separation and reconfiguration of the Existing
System in connection with creating the Boulder System and the PSCo System. It is understood
that additional work, outside the scope of this Agreement, associated with substations, will also
be required for Separation.
Stop Work Default has the meaning set forth in Section IV.B. of this Agreement
True Up Costs has the meaning set forth in Section II.K. of this Agreement.
Valuation Date means the date of valuation of the PSCo property interests to be acquired
by Boulder pursuant to agreement of the Parties or in the Condemnation Case.
5
II. Work to be Performed; Boulder Cost Responsibilities
A. PSCo Work Standards. PSCo Work shall be performed in accordance with
PSCo's existing standards or practices, Good Utility Practice, applicable reliability standards,
and applicable law. To the extent that PSCo's existing standards or practices in effect at the time
PSCo Work is being undertaken exceed Good Utility Practice, PSCo Work on PSCo's new
facilities and on existing facilities that will be part of the PSCo System may be performed in
accordance with PS Co's existing standards or practices. If and to the extent PS Co agrees in its
sole discretion in writing to operate any Boulder new facilities prior to the Cut-Over Date, PSCo
may require that such facilities be designed and constructed to PS Co's existing standards even if
such standards are more stringent than Good Utility Practice. If and to the extent PSCo does
work on existing facilities that will become part of the Boulder System, such work will be
performed at a minimum of Good Utility Practice, but PSCo may perform such work consistent
with PSCo' s existing standards or practices, even if such standards or practices are higher than
Good Utility Practice, in order for PSCo to be able to operate such facilities.
B. Payment of Costs. Boulder hereby agrees to pay all Costs incurred by PSCo to
effectuate Separation, including the Costs for the work described below, subject only to refund if
and to the extent determined pursuant to the Dispute Resolution Process in Section V of this
Agreement to have been incurred as a result of the Gross Negligence or Willful Misconduct of
PSCo or Clerical Error.
C. Cooperation, Communication and Coordination. The Parties shall cooperate with
each other in good faith to effectuate Separation without unnecessary delay or Costs. In order to
prevent or minimize disputes, designated representatives of each Party shall confer with each
other no less frequently than every thirty (30) days during the term of this Agreement to: (a)
provide information about the progress of their respective activities, (b) coordinate their
activities, as appropriate, (c) discuss any additional matters that may be advisable, and (d) timely
address any issues or concerns regarding Costs.
D. Conditions Work.
1. The Interim Cost Agreement. The Interim Cost Agreement
contains the process agreed upon by the Parties to reimburse PSCo for the Costs
associated with certain portions of the Conditions Work. Any Conditions Work not
covered by the Interim Cost Agreement shall be covered by this Agreement. In the
event of any conflict between the terms of the Interim Cost Agreement and this
Agreement, this Agreement shall control.
2. Preparation of Scopes of Work. PSCo, in collaboration with
Boulder, has prepared and furnished to Boulder a list of the Scopes of Work (including
distribution feeder work and tap work) that involve PSCo Work. Public Service
engineers are in the process of preparing the Scopes of Work for the feeders and taps on
the list, except those feeder Scopes of Work that are identified on the list as being
6
substation dependent. Scopes of Work for feeders that are substation dependent will be
prepared after the final determinations are made regarding where Boulder will connect
its distribution facilities to substations. The Scopes of Work are being prepared using
assumptions in lieu of necessary field work. The field work will be done as part of the
Detailed Design Drawings work and changes may be required based on new information
provided by the field work.
3. Boulder Review and Comment on Scopes of Work. PSCo will
provide copies of the Scopes of Work to Boulder for review and comment (i) so that
Boulder may suggest changes for PSCo consideration, prior to the competitive
solicitation for Detailed Design Drawings, regarding the engineering, the points of
separation, or other issues relevant to the Scopes of Work, and (ii) so that Boulder's
designers and other contractors can coordinate Boulder work with the PSCo Work to
avoid duplication of preparation of Detailed Design Drawings or Separation Work,
conflicts in Separation Work, or any gaps in the Separation Work.
(a) Within thirty (30) days after receipt of each Scope of Work,
Boulder shall review the Scope of Work in good faith and may raise, in writing any
suggested changes that it has identified that are reasonably determinable from the Scope
of Work documents. Boulder shall also respond with its views as to items noted in the
Scope of Work that require resolution such as which Party will retain ownership of
existing distribution transformers in specific situations.
(b) Public Service shall consider in good faith any requests for
changes to the Scopes of Work made by Boulder and responses to items that require
resolution but, because PSCo is the certificated utility and PSCo's Work involves the
facilities necessary to serve its customers, final determinations regarding the Scopes of
Work shall be in the sole discretion of PSCo, subject only to Boulder's right to dispute
Costs on the grounds of Clerical Error or Gross Negligence or Willful Misconduct of
PSCo as provided in this Agreement.
(c) Failure to respond within thirty (30) days or to request a particular
change does not waive Boulder's right to request changes or provide responses for
PSCo's good faith consideration (i) in connection with Boulder's review of Detailed
Design Drawings (as provided in Section II.E.4 below), or (ii) during construction; but
does waive any right Boulder may have had to claim that there has been Gross
Negligence or Willful Misconduct of PSCo as to issues that are reasonably determinable
from the Scopes of Work.
( d) The purpose of affording Boulder an opportunity to review the
Scopes of Work is to minimize or avoid disputes later. Any review conducted by or
information obtained by either Party as to the other Party's Scopes of Work shall not be
construed as endorsing the design or as any warranty of safety, reliability or effectiveness
of the work described.
7
E. Pre Go/No Go Decision Work.
1. Commencement of and Security for Pre Go/No Go Decision Work.
After the completion of and payment in full for the Conditions Work, resolution of any
existing Disputes, and the City providing the Security for the Pre Go/No Go Decision
Work as described in Section IV of this Agreement, PSCo will proceed with the Pre
Go/No Go Decision Work as set forth in this Agreement.
2. Cost Estimate for Detailed Design Drawings. Within thirty (30)
days after completion of the Scopes of Work, which shall be following Boulder's review
thereof and the making of any changes required to resolve items identified by PSCo in
the Scopes of Work, or changes requested by Boulder to which PSCo has agreed, PSCo
will conduct a competitive solicitation, using PSCo' s existing procedures and standards,
to the extent applicable, to hire a contractor to prepare the Detailed Design Drawings
(including conducting all field work) in accordance with PSCo's design standards and
applicable bidding standards. The request for proposals will request proposals for
completion by October 1, 2019. The terms and conditions and manner of conducting
such competitive solicitation and awarding of bids shall be in the sole discretion of
PSCo. The amount bid by the contractor selected by PS Co, together with PS Co's good
faith non-binding estimate of its internal costs associated with the Detailed Design
Drawings, will be PSCo's Cost Estimate for preparation of the Detailed Design
Drawings. PSCo will provide to Boulder its Cost Estimate for the Detailed Design
Drawings promptly after the Cost Estimate is completed.
3. Field Work in Connection With Detailed Design Drawings. The
portions of Scope of Work activities not done as part of Conditions Work including, but
not limited to, field work and other work to assess constructability, were deferred by
agreement of the Parties and will need to be completed as part of the preparation of the
Detailed Design Drawings. Field Work includes, but is not limited to, PSCo or its
contractor(s) obtaining government permits to be able to conduct field work activities,
preparing and submitting plans and profiles to the extent required by applicable laws,
conducting surveys, acquiring easements and other real property rights ( consistent with
its existing procedures and standards and to the extent deemed appropriate by PSCo
prior to the Go/No Go Decision) on terms and conditions acceptable to PSCo, estimating
or engaging consultants to estimate the work and Costs involved in obtaining
construction-related permits including, but not limited to, state and local storm water
drainage permits, and performing such other work as necessary to inform the preparation
of the Detailed Design Drawings. To the extent practicable and in accordance with
PSCo's normal practices, the application for permits and acquisition of easements will
occur concurrently with other Detailed Design Drawings Work. Neither Party will
unnecessarily delay Detailed Design Drawings Work while seeking permits or
easements or other real property rights. Boulder agrees to be cooperative with and
provide assistance to PSCo to minimize regulatory delays and burdens and to facilitate
field work and the acquisition of any necessary easements and other real property rights.
8
4. Boulder Review and Comment on Detailed Design Drawings.
PSCo will provide the Detailed Design Drawings to Boulder for review and comment so
that Boulder may suggest changes for PSCo consideration, regarding the design, prior to
the competitive solicitation for a general contractor.
(a) Boulder shall review the Detailed Design Drawings in good faith
and may raise, in writing, any suggested changes that it has identified that are reasonably
determinable from the Detailed Design Drawings documents within thirty (30) days after
receipt of each Detailed Design Drawing.
(b) Public Service shall consider in good faith any requests for
changes to the Detailed Design Drawings made by Boulder but, because PSCo is the
certificated utility and PS Co's Work involves the facilities necessary to serve its
customers, final determinations regarding the Detailed Design Drawings shall be in the
sole discretion of PSCo, subject only to Boulder's right to dispute Costs on the grounds
of Gross Negligence or Willful Misconduct of PSCo or Clerical Error as provided in this
Agreement.
(c) Failure to respond within thirty (30) days or to request a
particular change does not waive Boulder's right to request changes for PSCo's good
faith consideration during construction, but does waive any right Boulder may have had
to claim that there has been Gross Negligence or Willful Misconduct of PSCo as to issues
that are reasonably determinable from the Detailed Design Drawings.
( d) The purpose of affording Boulder an opportunity to review the
Detailed Design Drawings is to minimize or avoid disputes. Any review conducted by or
information obtained by either Party as to the other Party's Detailed Design Drawings
shall not be construed as endorsing the design or as any warranty of safety, reliability or
effectiveness.
5. Cost Estimate for PSCo's Work and the Cut-Over Work. After
completion of the Detailed Design Drawings, which shall be following Boulder's review
thereof and the making of any changes requested by Boulder to which PSCo has agreed,
subject to the provisions of Section II.E.5.(e) below, PSCo will conduct a competitive
solicitation, using PSCo's existing procedures and standards, to the extent applicable, to
hire a general contractor for PSCo's Work and the Cut-Over Work. The request for
proposals for the competitive solicitation will be issued within sixty (60) days after
completion of the Detailed Design Drawings. The competitive solicitation will request
bids for a completion date for PSCo's Work of three years after the Go/No Go Decision
and, at PSCo' s option, may also seek bids for one or more alternative completion dates.
While the competitive solicitation will also seek bids for the Cut-Over Work, because
the Cut-Over Work is dependent on the status of Boulder's Separation Work, the
competitive solicitation will not necessarily specify a completion date for Cut-Over
Work.
9
(a) The terms and conditions and manner of conducting such
competitive solicitation shall be consistent with PSCo's existing procedures and
standards, to the extent applicable. The awarding of bids shall be in the discretion of
PSCo, consistent with PSCo's existing procedures and standards. PSCo reserves the right
to exclude certain activities or portions of the PSCo Work from the competitive
solicitation, in its sole discretion. PSCo reserves the right not to award any contracts as a
result of any competitive solicitation.
(b) PSCo anticipates the competitive solicitation process, including
preparation of and issuance of a request for proposals, evaluation of bids, tentative
selection of a winning bidder and such negotiations as PSCo deems appropriate prior to a
Go/No Go Decision will take approximately six (6) months from completion of the
Detailed Design Drawings, but Boulder acknowledges and agrees that such process may
be of longer duration and PSCo is not responsible for any delays unless directly caused
by the Gross Negligence or Willful Misconduct of PSCo.
( c) The amount bid by the general contractor selected by PS Co,
subject to all exceptions, limitations and qualifications included in the bid, together with
PSCo's good faith non-binding estimate of its internal costs associated with the
Separation Work and Cut-Over Work (including all of the Cut-Over Work described in
Section II.F.3. below) will be PSCo's Cost Estimate for the Separation Work and Cut-
Over Work. In accordance with Section II.E.5.(b) above, PSCo anticipates that it will
provide to Boulder its Cost Estimate, including, upon execution of a highly confidential
non-disclosure agreement, details consistent with PSCo's requirements and the
confidentiality requirements of the winning bidders, on or before May 1, 2020, or within
six months after completion of the Detailed Design Drawings, whichever is later.
(d) If for any reason the competitive solicitation process is not
completed and PSCo's Cost Estimate for the Separation Work and Cut-Over Work is not
available on or before May I, 2020, PSCo will provide to Boulder the information PSCo
has available by that date regarding its Cost Estimate and will provide its Cost Estimate
as soon thereafter as it is available.
(e) Notwithstanding the foregoing, PSCo reserves the right not to
conduct a competitive solicitation for a general contractor in the event that PSCo decides
to perform the Separation Work and Cut-Over Work without a general contractor. In
such event, PSCo will provide to Boulder a Cost Estimate, based on information
available to PSCo at that time, for PSCo Work and Cut-Over Work, no later than May I,
2020.
(f) In the event there is a Stop Work Default pursuant to Section IV.B.
of this Agreement, the dates set forth in subparagraphs ( c) through ( e) above shall be
extended by the number of days of the stop work plus additional days to the extent the
Stop Work Default has exacerbated the delay greater than a day-for-day extension.
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(g) On or before May 1, 2020, PSCo will provide to Boulder a general,
high-level estimate, to the extent available, of the Capital Costs that are of the type
described in Section II.K4.(a) and (b) that were incurred by PSCo in the City of Boulder
for the prior calendar year.
6. No Other Cost Estimates.
(a) Because True Up Costs are contingent, Public Service cannot
provide during the Pre Go/No Go Decision, a Cost Estimate for True Up Costs.
(b) Prior to the Go/No Go Decision, Boulder will be conducting its
own field work in connection with preparation of its own Detailed Design Drawings for
the Boulder System and, upon reasonable request for purposes of Boulder's Detailed
Design Drawings (and not for the purpose of valuation), PSCo will provide information
that it deems reasonable about specific pieces of equipment of the Existing System that
will interconnect to the Boulder System. During the Separation Period, Boulder may
need PS Co's assistance as the serving utility from time to time as the Parties may agree,
for switching customers to backup feeders, providing load for testing and commissioning,
energizing any Boulder underground lines to prevent moisture damage prior to a line
being placed in service, and other similar activities. Boulder will be responsible for the
Costs of such activities, but it is understood that PSCo will not provide a Cost Estimate
for such activities, due to their intermittent nature.
7. Ballot Measure. Boulder intends to submit to its voters a ballot
measure to obtain authorizations for funding of its Municipalization costs including, but
not limited to, the Costs Boulder is required to pay under this Agreement. Boulder is
solely responsible for evaluating its own and PSCo's Cost Estimates for the Separation
Work and Cut-Over Work, and Boulder's startup costs, any other costs Boulder may
incur in the process and determining the amount of funding for which it will seek
authorization.
F. Post Go/No Go Decision Work.
1. Commencement of and Security for Post Go/No Go Decision
Work. After the Go/No Go Decision, if Boulder has made the determination to proceed
with Municipalization, and has paid all Pre Go/No Go Decision Costs in full, and all
existing Disputes have been finally resolved, and Boulder has provided Security as
described in Section IV, PSCo will proceed with its share of the Post Go/No Go
Decision Work and Boulder shall pay for all Costs associated therewith, which shall
include but not be limited to the Costs described in this Section II.F.
2. PSCo Work
(a) PSCo Work. PSCo will perform or cause to be performed its
portion of the Separation Work including, but not be limited to, the work involved in the
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reconfiguration of the Existing System and construction of its new Distribution Assets
Outside Substations, any additional field work including field work required to be
updated due to the passage of time or new legal requirements, permitting, acquisition of
easements or other property rights, procurement, project management and supervision,
and all other internal and third party contractor work.
(b) PSCo Assistance to Boulder. Upon the agreement of both Parties,
the Parties will coordinate efforts as needed, including without limitation, potential PSCo
assistance (without liability to PSCo) with Boulder's testing and commissioning of its
new facilities such as temporarily switching customers to backup; temporarily providing
load; energizing any Boulder underground lines to prevent moisture damage prior to a
line being placed in service, etc.
3. Cut-Over Work. Cut-Over Work shall not commence until all
Separation Work (both PSCo Work and work required to be performed by Boulder) has
been completed, all substation and transmission work required for Separation has been
completed, all Separation Work Costs have been paid in full, all existing Disputes have
been finally resolved, and Security for the True Up Costs has been provided as required
by Section IV.A.2. or IV.A.3., as applicable. Boulder shall pay all Costs associated with
the activities to be performed by PSCo in relation to Cut-Over Work, which shall
include but not be limited to the following:
(a) PSCo creating a means for removing electric customers and
retaining gas customers in PSCo systems; and physical switching activities to cut City
customers over to service by Boulder;
(b) PSCo reworking, reconciling, and reestablishing its electric outage
management reporting systems and control, electric meter reading, and billing systems
after removal of City electric customers;
( c) PSCo generating its final electric bills for customers in the City;
( d) Such meter reading coordination activities during the last billing
cycle before Cut-Over and the first billing cycle after Cut-Over involving Boulder's first
meter readings and PSCo's last electric meter readings to mitigate to the extent possible
any disruption to customers as the Parties may agree by separate agreement entered into
prior to commencement of the Cut-Over Work; and
(e) Other activities PSCo agrees to perform in its sole discretion.
G. Service Prior to Cut-Over Date. Prior to the Cut-Over Date, PSCo will continue
to operate the existing distribution system and be the retail electric utility provider for all
customers inside and outside the City, in accordance with its current practice, to maintain safe,
effective and reliable service. PSCo will continue to collect payments for electric service from
Boulder customers prior to the Cut-Over Date.
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H. Regulatory Proceedings. Boulder shall reimburse PSCo for its Costs incurred in
connection with PUC proceedings pertaining to Distribution Assets Outside Substations
including:
1. Commission Review of Conditions compliance (Decision ,r,rl 61
and 162),
2. PUC Final Approval (Decision ,rl 0), and
3. Any other PUC proceedings related to the subject matter of the
Decision required by the Commission or that the Parties jointly determine are necessary.
I. Litigation Costs. Boulder shall reimburse PSCo for its Costs incurred in
connection with the following litigation proceedings:
1. Enforcement of third party contracts, provided any actual damages
awarded to PSCo from such litigation attributable to such Costs shall be credited toward
the amount of the Costs Boulder is to pay PSCo,
2. Costs incurred by PSCo to enforce the Security provisions of this
Agreement including, but not limited to, the Costs of any action against the Issuer or
Bank providing the Security, and
3. Attorneys' fees incurred to enforce Boulder's performance of this
Agreement as provided in Section V.F. of this Agreement.
J. Restoration Costs.
1. If, after the Go/No-Go Decision but before the Cut-Over Date, the
City decides not to continue with Municipalization, the City shall provide written notice
to PSCo of its decision. The City shall pay any Costs incurred by PSCo under this
Agreement up through the date PSCo receives Boulder's written notice that it is not
continuing with Municipalization, any early termination or other damages or costs PSCo
may incur as a result of Boulder's decision not to continue with Municipalization, and
all costs to restore the Existing System to a single electric system that can provide
service to customers both within and outside the Boulder city limits with the same
safety, reliability and effectiveness (but not necessarily the same configuration) as it did
prior to the Go/No Go Decision. As to restoration activities, the Parties will proceed to
work cooperatively to obtain the following results:
(a) PSCo will not necessarily be able to stop where it is with PSCo
Work or the Cut-Over Work at the time notice is received regarding Boulder's decision
and it may be necessary to complete or reverse some of the PSCo Work or Cut-Over
Work in order to be able to restore the system to a single adequate system.
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(b) In connection with achieving a single electric system, utilize
reasonable Cost mitigation processes so long as they do not interfere with the safety,
reliability and effectiveness of PSCo's service, the electric distribution facilities or other
PSCo facilities and are consistent with PSCo practices. (For example, new facilities that
were part of the PSCo Work paid for by the City and constructed by PSCo prior to receipt
of Boulder's notice that are determined not to be needed by PSCo to serve customers may
be disconnected from the restored system and title transferred to the City so that the City
can decide whether to remove such facilities, at its sole cost, and at a time convenient to
the City.)
(c) The City will provide to PSCo a legal right to locate and maintain
any facilities constructed for Municipalization that PSCo will own and operate as part of
its system after Boulder determines not to municipalize.
PSCo will provide the City with a final Payment Request within one hundred eighty (180) days
after Boulder's notification and completion of all restoration activities.
K. True Up Costs.
I. Overview. The purpose of this section of this Agreement is to
address the topics in paragraph 160 of the Decision. Boulder shall reimburse PSCo for
the True Up Costs described in subparagraph 4 below.
2. Tracking and Security. PSCo shall track True Up Costs and
annually after the Go/No Go Decision, and no later than ninety (90) days prior to the
expected date of commencement of Cut-Over Work, PSCo will provide a high-level
summary to Boulder concerning the estimated amount of True Up Costs incurred to date
including, to the extent reasonably available, the associated FERC account numbers.
Boulder shall raise any issues with the estimated True Up Costs included in the
summary within thirty (30) days after receiving such summary. In the event of a
Dispute concerning estimated True Up Costs, the dispute resolution provisions of this
Agreement shall apply. The intent of providing the reports is to facilitate Boulder
planning, to provide for timely dispute resolution, and allow for the determination of the
amount of Security required for the True Up Costs; provided that failing to include any
True Up cost in a summary shall not impact Boulder's obligation to pay for such True
Up Cost. Security for the True Up Costs shall be 100% of the estimated amount of True
Up Costs provided to Boulder by PSCo ninety (90) days prior to the expected date of
commencement of Cut-Over Work. In the event Boulder fails to dispute any Costs
apparent from the information contained within the high-level summary within the thirty
(30) day period provided for herein, Boulder shall be deemed to have waived the right to
challenge such Costs as Gross Negligence or Willful Misconduct by PSCo pursuant to
Section V of this Agreement.
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3. Payment. PSCo's final calculation of True Up Costs shall be
provided to Boulder no later than one hundred eighty (180) days after the Cut-Over
Date. Payment shall be due to PSCo within the time provided in this Agreement for
payment and shall be subject to the dispute resolution provisions of this Agreement.
4. True Up Costs. Boulder shall reimburse PSCo for the following
True Up Costs:
(a) Capital Costs for New Facilities to Serve New Customers. The
actual Capital Costs incurred by PSCo for new facilities installed subsequent to the
Valuation Date and before the Cut-Over Date to serve new customers who will become
Boulder customers after the Cut-Over Date.
(b) Capital Costs Due to Storms, Catastrophic Events, and Failure of a
Major Distribution Asset Outside Substations.
(I) The actual Capital Costs incurred by PS Co subsequent to
the Valuation Date and before the Cut-Over Date as a result of a major weather
event or other catastrophic events or Failure of a Major Distribution Asset Outside
Substations that will become part of the Boulder System at the Cut-Over Date. In
the event of a major storm or other catastrophic event or Failure of a Major
Distribution Asset Outside Substations, PSCo will perform in accordance with its
duty to serve in its ordinary course of business and proceed with any capital
expenses required to meet such duty. PSCo will notify Boulder of its actions as
soon as it is reasonably able to do so. For purpose of this provision, "Failure of a
Major Distribution Asset Outside Substations" shall mean the failure of a single
Distribution Asset Outside Substations that exceeds $75,000 in new Capital Costs
or a Capital Cost project, such as replacement of poles that in the aggregate
exceeds $75,000 in new Capital Costs.
(2) In the event PSCo believes a Capital Cost in excess of
$75,000 may be necessary in connection with an existing Distribution Asset
Outside Substations that will be owned by Boulder after the Cut-Over Date (such
as a feeder exit), if such situation occurs after the Go/No Go Decision and no
immediate risk of failure is perceived, PSCo will consult with Boulder and will
proceed as directed by Boulder, so long as, in PSCo's sole determination, PSCo
will not incur additional operational or maintenance costs if it defers replacement
and provided PSCo also determines it will be able to maintain safe, effective and
reliable service prior to the Cut-Over Date without the replacement. In the event
replacement becomes necessary to maintain safe, effective, and reliable service
prior to the Cut-Over Date, in PSCo's sole discretion, PSCo may replace such
Distribution Asset Outside Substations and the Capital Costs for the portion that
will become part of the Boulder System shall be included in True Up Costs.
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( c) Capital Costs for AGIS and Other System-Wide Improvements.
(I) To the extent not addressed in the Condemnation Case, the
actual Capital Costs incurred by PSCo for any PUC-approved, system-wide,
improvements to PSCo's system, including but not limited to PSCo's Advanced
Grid Intelligence and Security ("AGIS") initiative, made within the City and
Boulder's share of the associated costs.
(2) After the Go/No Go Decision, if Boulder has decided to
proceed with Municipalization, then, to the extent that the PUC approves in a
separate proceeding that PSCo is able to do so without impacting other customers,
PSCo will defer the installation of AGIS meters in the City to the end of the
schedule (currently estimated to be in 2023) or not deploy AGIS within the city
limits subject to Boulder being responsible for any incremental costs arising out
of such deferment or costs associated with non deployment that PSCo
demonstrates will result from PSCo deferring or not making such deployment
within city limits.
(d) Distribution Assets Outside Substations That Cannot Be Used
After Cut-Over. The value of any Distribution Assets Outside Substations that PSCo will
not be able to use after Cut-Over because of changes in the Separation Work or other
changes occurring after the Valuation Date, shall be included in True Up Costs to the
extent the replacement costs new of such Distribution Assets Outside Substations, in the
aggregate, exceed $250,000.00.
( e) Other Costs. True Up Costs shall include any other amounts not
otherwise addressed by the Condemnation Case as ordered by the PUC under Section
160( c) the Decision.
5. Operation and Maintenance Expenses of Existing Facilities.
Boulder is not required to reimburse PSCo's operation and maintenance expenses as to
Distribution Assets Outside Substations that are not included in any of the True Up
Costs identified above.
6. Operation and Maintenance Expenses of New Boulder Facilities.
If and to the extent PSCo agrees in writing, in its sole discretion, to operate any of
Boulder's new facilities prior to the Cut-Over Date, Boulder shall be responsible for
reimbursement of PS Co's Costs for any maintenance and repair and capital costs
incurred in connection with such new Boulder Facilities.
7. Other Provisions Concerning True Up Costs. True Up Costs will
not include depreciation or appreciation of the assets to be acquired by Boulder.
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III. Process for Payment Requests
A. Submission of Payment Request. PSCo shall submit its Payment Request to
Boulder no more often than monthly, for Costs not previously billed (including Costs for prior
periods, not previously billed). As to PSCo internal Costs, Payment Requests shall include total
hours by department and total amount owed to the extent reasonably practicable without
requiring PSCo to incur additional costs and shall be generally in the form of the Payment
Requests that have been previously submitted. PSCo will consult with Boulder, prior to
issuance of the request for proposals for the general contractor, and consider Boulder's
reasonable requests for request for proposal terms to allow PSCo to provide certain information
to Boulder concerning the Costs billed to PSCo by the general contractor; provided, however, it
is acknowledged that the final terms of a third party contract will not necessarily be consistent
with the request for proposal. As to Costs of the general contractor, subject to requirements of
maintaining confidentiality, applicable PSCo corporate policy, and the terms and conditions of
the third-party contracts, PSCo and Boulder will determine what reasonably sufficient
information to support the Payment Requests will be provided to Boulder in a mutually
acceptable format. PSCo is not obligated to provide to Boulder, even pursuant to a Non-
Disclosure Agreement, any PSCo timekeeper names, or any wage or benefit information. For
any Payment Request containing Proprietary Information, PSCo will provide a cover sheet that
does not contain Proprietary Information but that identifies the vendor, the date range covered by
the Payment Request, and a brief explanation of the nature or type of work covered by the
Payment Request. PSCo will use best efforts to include all Costs in a Payment Request within
ninety (90) days of the Costs being incurred. All final Payment Requests for the Pre Go/No Go
Work shall be provided to Boulder no later than one hundred eighty ( 180) days after
commencement of the PSCo Work. All final Payment Requests for the Post Go/No Go Work
shall be provided to Boulder no later than one hundred eighty (180) days after the Cut-Over
Date.
B. When Payment is Due. No later than the Payment Due Date, Boulder shall pay
PSCo the entire amount of the Payment Request; provided, however, if and to the extent Boulder
believes in good faith that there is a Clerical Error in the Payment Request and provides notice
and an explanation of the asserted Clerical Error on or before the Payment Due Date, then
Boulder shall not be required to pay the asserted Clerical Error portion of a Payment Request
until the date specified in Section V.C. l. to allow for potential resolution by accounting
representatives as provided in Section V of this Agreement.
C. Proprietary Information. The Parties agree that only persons who have executed a
Non-Disclosure Agreement in the form of Exhibit A attached to this Agreement shall have
access to unredacted Payment Requests or Dispute Notices. In the event a Payment Request or
Dispute Notice includes Proprietary Information, Boulder shall redact such Proprietary
Information prior to disclosing the Payment Request or Dispute Notice to any person who has
not executed a Non-Disclosure Agreement.
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D. Stop Work if Payment Requests Not Timely Paid. As more fully provided in
Section IV.B. of this Agreement, PSCo may stop work at any time if Boulder does not timely
pay a Payment Request as provided herein.
E. Payment Disputes Other Than for Clerical Errors. At any time that Boulder
believes in good faith that Costs are being incurred or are about to be incurred as a result of
Gross Negligence or Willful Misconduct of PSCo, Boulder shall promptly, but in no event later
than thirty (30) days after Boulder first has reason to believe that Costs are being or were
incurred, or are about to be incurred as a result of Gross Negligence or Willful Misconduct of
PSCo, provide written notice to PSCo that includes an explanation of such claim. Such claim
shall be subject to the provisions of Section V of this Agreement.
IV. Security and Stop Work
A. Security. Boulder will provide Security to PSCo to provide assurance that
Boulder will reimburse PSCo for its Costs.
1. Pre Go/No Go Decision Costs -Letter of Credit. The instrument
by which Boulder will provide security to PSCo that Boulder will reimburse PSCo for
its Pre Go/No Go Decision Costs shall be a letter of credit as described below:
(a) The security shall be in the form of an irrevocable, stand-by letter
of credit substantially in the form of Exhibit B attached (a "Letter of Credit"), from a
financial institution acceptable to PSCo ("Issuer"). The Issuer of the Letter of
Credit shall have and maintain a long-term credit rating (unsecured by third party
support) of equivalent to A-( or better) by Standard & Poors and A3 ( or better) from
Moody's. If the credit rating is A-or A3, the Issuer must not be on credit watch or have a
negative outlook by any rating agency.
(b) Pursuant to C.R.S. 4-5-103(d), the rights and obligations of the
Issuer to Public Service under the Letter of Credit shall be independent of the existence,
performance, or nonperformance of any contract or arrangement out of which the Letter
of Credit arises or which underlies it, including contracts or arrangements between the
Issuer and Boulder and between Boulder and Public Service (including, but not limited
to, this Agreement and the Interim Cost Agreement).
(c) The Letter of Credit must be for a minimum of 360 days. The
City shall provide PSCo at least forty-five ( 45) days advance written notice prior to any
expiration or earlier termination of the Letter of Credit. No later than thirty (30) days
prior to expiration of the Letter of Credit, the City shall cause the renewal or extension of
the Letter of Credit for additional consecutive terms of 360 days until the Letter of Credit
terminates as provided in subparagraph ( f) below.
( d) The Letter of Credit shall be provided to PSCo prior to the
commencement of Detailed Design Drawings. The Letter of Credit for the Pre Go/No Go
18
Decision Costs shall be in the amount of $1,700,000.00 until terminated as provided in
subparagraph (f) below.
( e) 1n order to draw upon the Letter of Credit, PS Co shall only be
required to provide to the Issuer a written presentation in the form of Exhibit C. If at any
time PSCo draws upon the Letter of Credit, Boulder shall restore the Letter of Credit to
its pre-draw amount within ten (10) business days.
(f) The Letter of Credit shall terminate after all of the Pre Go/No Go
Decision Costs have been billed and indefeasibly paid in full and all Disputes pertaining
to Pre Go/No Go Decision Costs have been fully resolved.
(g) If the Issuer falls below the credit rating requirements of
subparagraph (a) above, or the Letter of Credit is not renewed or extended at least thirty
(30) days prior to its expiration date or otherwise is terminated early, or if the Letter of
Credit is not restored to its pre-draw amount as provided in subparagraph (e) above,
PSCo shall have the right to draw immediately upon the Letter of Credit, without any
obligation to provide the Notice under Section IV.A.4. below, and to place the amounts
so drawn, in an escrow account controlled by PSCo, until and unless Boulder provides a
new Letter of Credit meeting the requirements of this Section IV.A.I., in which event the
drawn funds, to the extent not utilized to pay Payment Requests, will be refunded to the
City. For the avoidance of doubt, Boulder acknowledges and agrees that any refund to
Boulder of funds in escrow shall be net of any funds Boulder owes pursuant to a Payment
Request under this Agreement.
2. Post Go/No Go Decision Costs -Letter of Credit or Line of Credit.
The instrument by which Boulder will provide Security to PSCo that Boulder will
reimburse PSCo for its Post Go/No Go Decision Costs shall be either a Letter of Credit
as provided in this subsection 2 or a line of credit as provided in subsection 3 below.
The following are the terms and conditions for a Letter of Credit:
(a) The Letter of Credit shall meet the same requirements as set forth
in subparagraphs l(a), (b), (c), (e), and (g) above and the following requirements:
(b) The Letter of Credit shall be provided to PSCo prior to the
commencement of PSCo's Separation Work. The Letter of Credit for the Post Go/No Go
Decision Costs shall be determined annually on a calendar year ( or portion thereof for the
first and last years during which Separation Work and Cut-Over Work occur) basis as
follows:
(I) 130% of the expected Costs for PSCo Work and Cut-Over
Work for each calendar year, as determined prior to the start of a calendar year;
provided, however, that the security amount for any calendar year shall be, at a
minimum, the lesser of (i) twelve million dollars ($12,000,000.00), or (ii) two
times the expected Costs for PSCo Work and Cut-Over Work for each calendar
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year. Notwithstanding the foregoing, if at any time during a calendar year, PSCo
reasonably believes that the amount of the Letter of Credit is less than the total
expected Costs for PSCo Work and Cut-Over Work for that calendar year, for
example because work is proceeding at a faster pace than originally expected,
PSCo shall provide Boulder with a notice of insufficient security. Within fifteen
(15) days thereafter, Boulder shall increase the amount of the Letter of Credit or
purchase an additional Letter of Credit in an amount equal to the difference
between the amount of the existing Letter of Credit and PSCo' s total expected
construction costs for the calendar year.
(2) The Security for True Up Costs shall be a separate amount
which shall be estimated as provided in Section II.K.2. and provided prior to
commencement of Cut-Over Work as provided in Section II.F .3.
(c) The Letter of Credit shall terminate after all of the Post Go/No Go
Decision Separation and Cut-Over Work has been completed, all Post Go/No Go
Decision Costs including Costs for Separation Work, Cut-Over Work, Restoration Work,
and True Up Costs, have been billed and indefeasibly paid in full, all Disputes have been
fully and finally resolved pursuant to the dispute resolution provisions of Section V of
this Agreement, and the Commission has given final approval of the transfer as required
by paragraph 10 of the Decision.
3. Post Go/No Go Decision Costs -Equivalent Alternative Security.
Boulder shall have the right to propose to PSCo a line of credit as an alternative form of
Security for the Post Go/No Go Decision Costs ("Alternative Security") that is
irrevocable for the term of the Alternative Security and that meets the following
conditions:
(a) The Alternative Security must be provided by an Issuer meeting
the requirements of Section IV.A.l.(a) above.
(b) There must be a contract between the Issuer and PSCo, satisfactory
to PSCo in its sole discretion, concerning the Alternative Security that: (i) provides that
the rights and obligations of the Issuer to Public Service under the Alternative Security
are independent of the existence, performance, or nonperformance of any contract or
arrangement out of which the Alternative Security arises or which underlies it, including
contracts or arrangements between the Issuer and Boulder and between Boulder and
Public Service (including, but not limited to, this Agreement and the Interim Cost
Agreement), (ii) allows PSCo to access the Alternative Security by providing to the
Issuer a written presentation in the form of Exhibit C, and (iii) does not contain any other
terms or conditions that are not acceptable to PSCo; provided, however, PSCo's
acceptance of the Alternative Security shall not be unreasonably withheld, conditioned or
delayed.
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(c) The Alternative Security must be for a minimum of 360 days. The
City shall provide PSCo at least sixty (60) days advance written notice prior to any
expiration or earlier termination of the Alternative Security. No later than thirty (30)
days prior to each expiration of the Alternative Security, the City shall cause the renewal
or extension of the Alternative Security for additional consecutive terms of 360 days until
the Alternative Security terminates as provided in subparagraph (f) below.
(d) The Alternative Security shall be provided to PSCo prior to the
commencement of the PSCO Work.
(!) The Alternative Security for the Post Go/No Go
Decision Costs shall be in the amount of $20,000,000. If at any time during a
calendar year, PSCo reasonably believes that the amount of the Alternative
Security is less than the total expected Costs for PSCo Work and Cut-Over Work
for that calendar year, PSCo shall provide Boulder with a notice of insufficient
security. Within 15 days thereafter, Boulder shall increase the amount of the
Alternative Security or provide additional Alternative Security in an amount equal
to the difference between the amount of the existing Alternative Security and
PSCo' s total expected construction costs for the calendar year.
(2) The Security for True Up Costs shall be a separate
amount which shall be estimated as provided in Section II.K.2. and provided prior
to commencement of Cut-Over Work as provided in Section II.F.3.
( e) In order to draw upon the Alternative Security, PS Co shall only be
required to provide to the Issuer a written presentation in the form of Exhibit C. There
can be no conditions to PS Co's ability to draw upon the Alternative Security other than
the requirement to provide the written presentation. If at any time PSCo draws upon the
Alternative Security, Boulder shall restore the Alternative Security to its pre-draw
amount within ten (I 0) business days.
(f) The Alternative Security shall terminate on the later of the
following: (i) after all of the Post Go/No Go Decision Separation and Cut-Over Work
has been completed, (ii) all Costs for the Post Go/No Go Decision, including Costs for
Separation Work, Cut-Over Work, Restoration Work, and True Up Costs) have been
billed and indefeasibly paid in full, (iii) all Disputes pertaining to Post Go/No Go
Decision Costs have been fully resolved, (iv) the Cut-Over Date has occurred, and (v) the
Commission has given final approval of the transfer as required by paragraph IO of the
Decision
(g) If the Issuer falls below the credit rating requirements of Section
IV.A.3.(a) above, the Alternative Security is not renewed or extended at least thirty (30)
days prior to its expiration date or otherwise is terminated early, or if the Alternative
Security is not restored to its pre-draw amount as provided in subparagraph ( e) above,
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PSCo shall have the right to draw immediately upon the Alternative Security, without any
obligation to provide the Notice under Section IV.A.4 below, and to place the amounts so
drawn, at City's cost and with City's funds, in an escrow account controlled by PSCo,
until and unless Boulder provides a new Letter of Credit or Alternative Security meeting
the requirements of this Section IV, in which event the drawn funds, to the extent not
utilized to pay Payment Requests, will be refunded to the City. For the avoidance of
doubt, Boulder acknowledges and agrees that any refund to Boulder of funds in escrow
shall be net of any funds PSCo was obligated to pay or Boulder owes pursuant to a
Payment Request under this Agreement.
4. Notice and Opportunity to Cure. Prior to drawing on the Security,
PSCo shall provide Boulder with ten (I 0) days written notice of PSCo 's intent to make a
draw, identifying the unpaid Payment Requests ( or portion thereof) by date and the
amount owed. PSCo shall not draw from the Security if Boulder makes payment in full
within ten (10) days from receipt of PSCo's notice of intent to draw or provides to PSCo
evidence that the payment requests ( or portion thereof then due) have been paid in full.
If Boulder fails to timely respond to a notice of PSCo' s intent to make a draw by making
payment or providing such evidence, PSCo shall not be liable for liquidated damages
under paragraph 5 below. Notice is not required in order for PSCo to exercise its rights
under Section IV.A.l.(g) above, including subparagraph l(g) incorporated by reference
into Section IV.A.2. above, and Section IV.A.3.(g) above, as to any Pre or Post Go/No
Go Decision Security.
5. Liquidated Damages. Boulder asserts that it will incur significant
damages if the Security is mistakenly or wrongfully accessed including costs it will
incur with the Issuer for the Security and potential impact on the City's credit rating.
Such damages cannot be quantified. Therefore, except as provided in Section
IV .A.4above, if PSCo accesses the line of credit for any Payment Request that has
previously been paid, PSCo agrees to return to Boulder immediately the amount
wrongfully withdrawn and to pay to Boulder liquidated damages in an amount equal to
the amount wrongfully withdrawn but not to exceed $100,000.
B. Stop Work. PSCo may stop work under this Agreement in the event any of the
following occurs ("Stop Work Defaults"):
1. In the event PSCo does not timely receive the amount owed under
any Payment Request,
2. The Issuer fails to honor a presentation in the form of Exhibit C, or
3. The Security expires or terminates prior to the Security termination
date, as provided under Sections IV.A.l(f); IV.A.2(c); or IV.A.3(f).
PSCo shall not be obligated to resume work until the Stop Work Default has been cured. Any
costs PSCo incurs as a result of stopping work due to a Stop Work Default shall be included in
22
the Costs Boulder is required to pay under this Agreement. Failure of PSCo to stop work while a
Stop Work Default is pending shall not be deemed a waiver of any rights and shall not be
deemed a waiver of future Stop Work Defaults.
V. Dispute Resolution Process
A. Context. The Parties acknowledge: ·
I. The City is a home rule city under Colorado law and desires to
own and operate its own municipal electric distribution utility by acquiring portions of
the Existing System that will serve Boulder customers, all in accordance with the
Colorado Constitution.
2. PSCo is a jurisdictional public utility under the laws of the State of
Colorado engaged in the on-going business of providing retail gas and electric service in
Colorado including to customers located in the City and to customers not located in the
City but who are currently served by facilities that also serve City customers.
3. If the Go/No Go Decision is to proceed with Municipalization,
PSCo will be performing, at Boulder's cost, PSCo Work and Cut-Over Work to separate
its Existing System into the facilities for the separate Boulder System and PSCo System.
Furthermore, at Boulder's cost, Boulder and PSCo will each be responsible for the
construction of their own new facilities, as part of the Separation Work, in order to
complete their respective systems. PSCo will be performing its part of the Separation
Work for itself and not for Boulder. However, Boulder will be responsible for PSCo's
Costs for the Separation and Cut-Over Work and the other Costs contemplated by this
Agreement.
4. Separation of the Existing System while it continues to provide
service to customers is a complex undertaking that will require cooperation,
communication and coordination between the Parties.
5. Given the scope and nature of the Separation Work, it is
recognized that Costs may vary from the Cost Estimates and the schedule for completion
of the Separation Work and Cut-Over Work may change during the course of the
Separation Work and Cut-Over Work. Any such variance is not grounds for non-
payment of Costs and shall not create liability to PSCo.
6. Both Parties have a desire to ensure that their respective systems
will provide safe, reliable and effective service and that the Separation Work and Cut-
Over Work is done in a manner that will achieve this objective in accordance with this
Agreement.
7. Boulder has a desire to ensure that PSCo' s Costs are actually
incurred and that any Costs that were incurred as a result of Clerical Error or Gross
23
Negligence or Willful Misconduct of PSCo are not included in the Costs Boulder is
required to pay.
8. PSCo has a desire to ensure that it is timely reimbursed for all of
its Costs and is not subjected to payment challenges and second guessing regarding its
Costs except those that Boulder believes, in good faith, are improper as a result of
Clerical Error or Gross Negligence or Willful Misconduct of PSCo.
9. The Parties desire to have a dispute resolution process that will
promote cooperation and avoid or minimize Disputes.
B. Disputes. The following provisions shall apply notwithstanding any provision of
this Agreement to the contrary:
I. Sole Grounds for Disputes Against PSCo and Remedies.
(a) Cost Disputes. The sole grounds for Disputes by Boulder against
PSCo related to Costs under this Agreement shall be good faith claims by Boulder
disputing Costs on the basis that such Costs are the result of (i) a Clerical Error, or (ii) the
Gross Negligence or Willful Misconduct of PSCo. There are no other grounds for
Disputes related to Costs that may be asserted against PSCo pertaining to this Agreement.
The maximum liability PSCo shall have to Boulder for Costs that are Disputed as
authorized under this Agreement shall be the amount of the Disputed Costs that Boulder
establishes through the dispute resolution provisions of this Section V of this Agreement
are (i) Costs that are the result of a Clerical Error, or (ii) Costs that are the result of the
Gross Negligence or Willful Misconduct of PSCo. If and to the extent there is a final and
non-appealable determination that an amount of Costs was incurred as a result of Clerical
Error or as a result of the Gross Negligence or Willful Misconduct of PSCo, Boulder
shall be entitled to a refund of that amount plus any Costs ( or a pro rata portion thereof if
Boulder prevails only as to a portion of the Disputed Costs) charged by PS Co to Boulder
under this Agreement pertaining to any litigation between the Parties brought subsequent
to the dispute resolution procedures set forth below, which will be applied as a credit on
future Payment Request( s) until fully credited. If there are no further Payment Requests,
PSCo shall refund any remaining amount required to be refunded within thirty (30) days
after the final and non-appealable determination that Boulder is entitled to a refund.
(b) Other Disputes by Boulder Against PS Co. The sole grounds for
Disputes by Boulder against PSCo under this Agreement, other than Cost Disputes, shall
be a good faith claim by Boulder of Gross Negligence or Willful Misconduct of PSCo in
(i) failing to issue a request for proposals pursuant to Sections 11.E.2. and/or 11.E.5 or,
alternatively, to undertake the Detailed Design Drawings Work, PSCo Work and/or Cut-
Over Work to the extent not contracted out, or (ii) failing to reasonably enforce its rights
pursuant to PSCo's agreements with contractors. The maximum liability PSCo will have
to Boulder in damages for such authorized other Disputes shall be the actual damages
24
established through the dispute resolution provisions of Section V.E. of this Agreement
but not to exceed $1,000,000.00 in the aggregate for all Disputes covered by this
subparagraph (b ).
2. Dispute Resolution Procedures. Paragraphs C, D and E of this
Section V, as applicable, are the dispute resolution procedures under this Agreement.
3. Limitation of Claims and Remedies.
(a) PSCo is entering into this Agreement because of Boulder's
decision to Municipalize and the PUC Decision to effectuate Separation. This
Agreement concerns Boulder's obligation to reimburse PSCo for PS Co's costs and
PSCo' s obligation to facilitate Separation as provided herein. This Agreement is not
intended to create and does not create an "owner" and "contractor" relationship between
the City and PSCo. By entering into this Agreement and performing the Work
contemplated by this Agreement, PSCo does not intend to become and shall not be
deemed to have become a contractor for the City of Boulder.
(b) Nothing in this Agreement shall entitle either Party to assert any
claims against the other Party except as specifically provided in this Agreement and the
Parties hereby waive any and all other claims, liabilities, rights, demands, obligations,
damages, losses, attorneys' fees (except as provided in Section V.F. below), expenses,
actions, causes of action, suits, or liability or controversies of every kind and description
whatsoever relating to or arising out of this Agreement. IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR INCIDENTAL,
CONSEQUENTIAL, NON-ECONOMIC, EXEMPLARY, OR PUNITIVE DAMAGES
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT,
REGARDLESS OF HOW CAUSED AND REGARDLESS OF THE THEORY OF
RECOVERY.
4. No Representations, Warranties or Guaranties. NOTHING IN
THIS AGREEMENT IS INTENDED TO CREATE OR SHALL BE DEEMED TO
CREATE ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, CONCERNING THE PSCO ASSETS OR THE PSCO WORK OR
THE CUT-OVER WORK.
C. Dispute Resolution Procedures -Costs -Clerical Errors. If Boulder submits a
Dispute Notice disputing Costs on the basis that such Costs are the result of a Clerical Error,
such Dispute Notice shall be subject to the provisions of Section V.B. l.(a) above and the Parties
shall proceed as follows:
1. Accounting representatives of the Parties shall attempt to resolve
the Clerical Error Dispute within ten ( 10) business days after delivery of the Dispute
Notice. If the accounting representatives are unable to resolve the Clerical Error Dispute
within this time period, the amount of the Clerical Error Dispute shall be paid to PSCo
25
within five (5) business days thereafter, subject to refund as provided m Section
V.B. l.(a) above.
2. If the accounting representatives are unable to resolve the Dispute
on or before ten (10) business days after delivery of the Dispute Notice, business
representatives of the Parties shall meet to attempt to resolve the Dispute.
3. If the business representatives are unable to resolve the Dispute on
or before twenty (20) business days after delivery of the Dispute Notice, senior
management of the Parties shall meet to attempt to resolve the Dispute.
4. If senior management of the Parties are unable to resolve the
Dispute on or before thirty (30) business days after delivery of the Dispute Notice,
Boulder may file an action for a determination of the Dispute within sixty (60) days
thereafter. In the event of a final non-appealable determination that all or a portion of
the disputed Costs were the result of a Clerical Error, Boulder shall be entitled to a
refund or payment as provided in Section V.B. l.(a), above. In the event Boulder does
not file an action within such sixty-day period, the claim on which the Dispute was
based shall be deemed waived.
D. Dispute Resolution Procedures -Costs -Gross Negligence or Willful Misconduct
of PSCo. If Boulder submits a Dispute Notice disputing Costs on the basis that such Costs are
the result of the Gross Negligence or Willful Misconduct of PSCo, such Dispute Notice shall be
shall be subject to the provisions of Section V.B. l.(a) above and the Parties shall proceed as
follows:
I. Business representatives of the Parties shall confer within ten (10)
business days after delivery of the Dispute Notice to attempt to resolve the dispute.
2. If the business representatives are unable to resolve the dispute on
or before fifteen (15) business days after delivery of the Dispute Notice, senior
management of the Parties shall meet to attempt to resolve the dispute.
3. If senior management of the Parties are unable to resolve the
dispute on or before thirty (30) business days after delivery of the Dispute Notice,
Boulder may file an action for a determination of the Dispute within sixty (60) days
thereafter. In the event of a final non-appealable determination that all or a portion of
the disputed Costs were the result of the Gross Negligence or Willful Misconduct of
PSCo, Boulder shall be entitled to a refund or payment as provided in Section V.B. l .(a),
above. In the event Boulder does not file an action within such sixty-day period, the
claim on which the Dispute was based shall be deemed waived.
E. Dispute Resolution Procedures -Other Disputes. If Boulder submits a Dispute
Notice to PSCo on the grounds specified in Section V.B. l.(b ), above, or if PSCo submits a
26
Dispute Notice to Boulder for failure to perform this Agreement, the Parties shall proceed as
follows:
I. Business representatives of the Parties shall confer within fifteen
(15) business days after delivery of the Dispute Notice to attempt to resolve the dispute.
2. If the business representatives are unable to resolve the dispute on
or before fifteen (15) business days after delivery of the Dispute Notice, senior
management of the Parties shall meet to attempt to resolve the dispute.
3. If senior management of the Parties are unable to resolve the
dispute on or before thirty (30) business days after delivery of the Dispute Notice, the
aggrieved Party within sixty (60) days thereafter may seek actual damages, subject in the
case of a Dispute Against PSCo to the damages cap in Section V.B. l.(b ), in an
appropriate forum. In the event the aggrieved Party does not initiate an action or
proceeding within such sixty-day period, the claim on which the Dispute was based shall
be waived.
F. Attorneys' Fees. The prevailing Party in any litigation between the Parties
authorized under this Agreement and brought subsequent to the dispute resolution procedures
provided above shall be entitled to its attorneys' fees.
VI. Term
This Agreement shall remain in effect until all Costs and sums owing under it have been
paid in full, all Disputes, to the extent authorized under this Agreement, have been fully and
finally resolved, and the Commission has given final approval of the transfer as required by
paragraph IO of the Decision.
VII. General Provisions
A. Agreement Subject to PUC Approval. This Agreement is subject to approval of
the Commission. This Agreement shall not become effective until the issuance of a final
Commission decision approving the Agreement, which order (i) does not contain any
modifications of the terms and conditions of this Agreement that are unacceptable to either of the
Parties, and (ii) is final and non-appealable.
B. Proprietary Information. In connection with the acttv1ttes covered by this
Agreement, there will be Proprietary Information created, exchanged and used between the
Parties that is critical electric infrastructure information and not subject to disclosure pursuant to
the Homeland Security Act. Nothing herein shall be construed to allow or require disclosure of
Proprietary Information to any third party or to any person or entity that has not executed an
applicable Non-Disclosure Agreement.
27
C. Amendments. No alterations, amendments or modifications to this Agreement
shall be valid unless executed by an instrument in writing signed by the Parties, adopted with the
same formality used in adopting this Agreement, to the extent required by law, and no
subsequent oral agreement shall have any validity whatsoever.
D. Authority. Each Party represents and warrants that it has taken all actions that are
necessary or that are required by its ordinances, regulations, procedures, bylaws, or applicable
law, to legally authorize the undersigned signatories to execute this Agreement on behalf of the
Parties and to bind the Parties to its terms. The persons executing this Agreement on behalf of
each of the Parties represent and warrant that they have full authorization to execute this
Agreement.
E. Binding Agreement. The persons signing this Agreement in the name of and on
behalf of PSCo and City each represent and warrant that they have the requisite power and
authority on behalf of their respective entity to enter into, execute, and deliver this Agreement,
and that this Agreement is a valid legally binding obligation of PSCo and City, and enforceable in
accordance with its terms.
F. Insurance.
1. In connection with each Party's performance of the Separation
Work and Cut-Over Work, each Party agrees that it and each of its contractors and
subcontractor shall carry insurance in such forms and amounts and subject to the terms
as set forth in Exhibit D to insure against damages and injury caused by such Party, or
its employees, agents, contractors, subcontractors or materialmen, in the course of the
Separation Work, Cut-Over Work, or Restoration Work, to the property or facilities of
the other Party, to the other Party's employees, agents, contractors, subcontractors or
materialmen, or to the property or persons of third parties.
2. Each Party shall provide the other Party with certificates of
insurance as required under subsection 1. above prior to commencement of Separation
Work by the Party, or its contractors or subcontractors.
3. Further, each Party agrees to require its contractors and
subcontractors to indemnify, defend and hold harmless the other Party with respect to all
loss, cost, risk, expense or liability resulting from the acts of such contractor or
subcontractor.
G. Relationship of Parties. This Agreement shall not be interpreted or construed to
create an association, joint venture, agency relationship, or partnership between the Parties or to
impose any partnership obligation or partnership liability upon either Party. Neither Party shall
have any right, power or authority to enter into any agreement or undertaking for, or act on
behalf of, or to act as or be an agent or representative of, or to otherwise bind, the other Party.
28
H. No Waiver. Neither Party shall be excused from complying with any of the terms
and conditions of this Agreement by any failure of the other, or any of its officers, employees, or
agents, upon any one or more occasions, to insist upon or to seek compliance with any such
terms and conditions.
I. Condemnation Case. The Parties intend that any future Condemnation Case be
conducted in accordance with applicable Colorado law. Nothing in this Agreement is intended
to expand or waive any right, or act as an admission, by either Party of any issue that may arise
in any future Condemnation Case, including but not limited to the amount of the condemnation
award, any legal challenge to the taking, just compensation claims, post-trial relief, interest,
attorney's fees, costs or abandonment damages. PSCo's provision of Scopes of Work, Detailed
Design Drawings or other information and documents pursuant to or in connection with this
Agreement and the PSCo Work and Cut-Over Work to be completed hereunder shall not
constitute a waiver of any rights under condemnation law to compensation for PSCo's
Proprietary Information, including Proprietary Information obtained in connection with this
Agreement and the PSCo Work and Cut-Over Work to be completed hereunder. This
Agreement shall not be admissible as evidence in the valuation phase of a Condemnation Case,
except to the extent necessary to present to the court (not the jury or commission) in order to
protect or defend against a compensation claim that either party alleges is addressed or excluded
by this Agreement.
J. Waiver of Jury Trial. EACH PARTY HERETO WAIVES ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION (ACTION,
PROCEEDING OR COUNTERCLAIM) DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY DOCUMENT OR
AGREEMENT ENTERED INTO IN CONNECTION HEREWITH AND ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.
K. Successors and Assigns. The rights, privileges, and obligations, in whole or in
part, granted and contained in this Agreement shall inure to the benefit of and be binding upon
the Parties, their successors and assigns, to the extent that such successors or assigns have
succeeded to or been assigned such rights under this Agreement.
L. Third Parties. Nothing contained in this Agreement shall be construed to provide
rights to third parties
M. Notice. Any notice, consent, waiver, request or other communication required or
provided to be given pursuant to this Agreement shall be in writing and shall be deemed given
when delivered (i) personally, (ii) on the first business day which is three (3) days following
mailing by certified or registered mail, return receipt requested, postage prepaid, or (iii) the next
business day after dispatch by nationally recognized overnight delivery service, in any event,
addressed as follows:
29
To the City:
Electric Utility Director
City of Boulder
P.O. Box 791
Boulder, Colorado 80306
City Manager
City of Boulder
P.O. Box 791
1777 Broadway
Boulder, Colorado 80306
with a copy to:
City Attorney
City of Boulder
P.O. Box 791
1777 Broadway
Boulder, Colorado 80306
ToPSCo:
Public Service Company of Colorado
1800 Larimer Street, Suite 1400
Denver, Colorado 80202
Attn: Diane Watkins
with copies to:
Public Service Company of Colorado
Attn: Legal Department -Boulder Separation
1800 Larimer Street, Suite 1100
Denver, Colorado 80202
Attn: Chris Irby
and
Davis Graham & Stubbs LLP
1550 17 th Street, Suite 500
Denver, Colorado 80202
Attn: Judy Matlock
30
or to such Party at such other address as such Party, by ten (10) days prior written notice given as
herein provided, shall designate.
N. Force Majeure. Neither the City nor PSCo shall be in breach of this Agreement if
a failure to perform any of the duties under this Agreement is due to Force Majeure as defined
herein; provided, however, no event of Force Majeure shall relieve the City of the obligation to
pay for Costs incurred by PSCo prior to or during the Force Majeure event. PSCo will consider
in good faith any request by Boulder to delay all or a portion of payments due if the event is of
such magnitude that the costs of recovery require the city to use all available funds to protect
people or property.
0. Titles Not Controlling. Titles of the paragraphs herein are for reference only, and
shall not be used to construe the language of this Agreement.
P. Applicable Law. Colorado law shall apply to the construction and enforcement of
this Agreement. The Parties agree that venue for any litigation arising out of this Agreement
shall be in the District Court for Boulder County, State of Colorado.
Q. Compliance with Laws. Each Party shall promptly and fully comply with all
applicable laws, regulations, permits and orders enacted or issued by any applicable authority
with appropriate jurisdiction.
R. Interpretation of Agreement. Nothing herein shall preclude the recovery of
attorney's fees and costs by either Party in regulatory or court proceedings between them as
provided in the law applicable to such proceedings. In no event shall this Agreement be
interpreted such that Boulder pays the same Costs twice. Any Costs paid by Boulder directly to
a third party or specifically awarded to PSCo as part of another proceeding shall not be included
in Costs under this Agreement.
S. Counterparts. This Agreement may be executed in any number of counterparts
and by different Parties hereto on separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute but one and the same
agreement.
T. Entire Agreement. This Agreement, including all Exhibits, together with the
Interim Agreement and work plans thereunder, constitutes the entire agreement between the
Parties with regard to the Costs to effectuate the separation of the systems as to Distribution
Assets Outside Substations as provided by paragraphs l 57 through 160 of the Decision. This
Agreement supersedes all prior oral and written communications, negotiations, representations or
agreements in relation to the subject matter hereof and the Parties agree that no prior oral or
written communications, including, but not limited to, drafts of this Agreement or the Interim
Agreement, may be used to interpret this Agreement or constitutes a waiver in other litigation of
positions raised in the negotiation of this Agreement.
31
EXHIBIT A
CONFIDENTIALITY AGREEMENT
(Billing Information)
This Confidentiality Agreement ("Agreement") is effective as of the day of May 2018, (the
"Effective Date") by and between Public Service Company of Colorado, a Colorado corporation ("Xcel
Energy"), and the City of Boulder, a Colorado home rule city, with an address of City Manager, City of
Boulder, P.O. Box 791, Boulder, CO 80306 ("Boulder"). "Party" or "Parties" refers to Xcel Energy and
Boulder, individually or collectively.
WITNESSETH:
WHEREAS, Xcel Energy holds information which is proprietary to Xcel Energy and may develop
information that will be proprietary to Xcel Energy; and
WHEREAS, Xcel Energy may share such information with Boulder subject to the terms of this
Agreement, in connection with invoices for payment of costs and performance of work under that certain
Interim Agreement for Payment of Certain Municipalization Costs (Conditions Work) (the "Interim
Agreement") or that certain Agreement for Payment of Costs between the Parties, (as amended,
supplemented and otherwise modified and in effect from time to time, collectively, the "Agreements"), which
concern satisfaction of conditions required by the Colorado Public Utilities Commission in Decision No.
C 17-050 and the design and construction of new facilities as well as the separation and reconfiguration of
existing facilities to create two independent electric distribution systems, the Boulder System for Boulder
to use to serve customers within the Boulder city limits and the PSCo System which will serve Xcel
Energy customers in Boulder County separate from Boulder customers within the Boulder city limits, and
agreements related thereto (the "Work").
NOW, THEREFORE, the Parties agree as follows:
I. Xcel Energy "Confidential Information" shall include, but not be limited to, any billing rates, wage
schedules and rates; Fully Loaded Costs (as defined in the Interim Agreement) and information related
thereto; operational, economic or financial knowledge, information or data of any nature whatsoever
which has been or may hereafter be provided or disclosed by Xcel Energy concerning the Work; Critical
Energy Infrastructure Information ("CEIi") as defined by the Federal Energy Regulatory Commission
("FERC''); and other information protected from disclosure by applicable law, such as the Colorado
Open Records Act and the Homeland Security Act. All disclosures of Confidential Information,
whether sent, heard or written shall be identified as confidential at the time of disclosure to Boulder,
or any employee, attorney, consultant, agent or other representative of Boulder (such parties to be
referred to as "Boulder Representatives") or promptly after discovery that information which should
have been identified as confidential has been disclosed to Boulder or a Boulder Representative .
Boulder shall ensure that the Boulder Representatives comply with the terms and conditions of this
Agreement.
2. Boulder, for itself and on behalf of the Boulder Representatives, agrees not to use or disclose
Confidential Information except as provided pursuant to the terms of the Agreements for the purpose
of the Work. Boulder agrees only to disclose the Confidential Information received from Xcel Energy
to the Boulder Representatives identified on Attachment I, whose duties justify their need to know
4463802.1
such Confidential Information. Boulder represents and warrants that the individuals it lists on
Attachment 1 have the legal capacity to maintain the Confidential Information as confidential.
3. Confidential Information is not information which:
a) now is or becomes generally known to the public without fault of Boulder; or
b) is proven by written documentation to have been in Boulder's possession prior to its receipt from
Xcel Energy and not to have been provided to Boulder pursuant to a prior confidentiality
agreement or order including, but not limited to, the orders of the Colorado Public Utilities
Commission; or
c) is received from an independent third party who is not under an obligation of confidentiality; or
d) is independently developed by Boulder as demonstrated by competent documentary evidence.
4. In the event that Boulder is served with a request to disclose Confidential Information, Boulder will
immediately inform Xcel Energy so that Xcel Energy may seek an appropriate protective order
regarding the Confidential Information. Boulder will cooperate with Xcel Energy in avoiding
disclosure of the Confidential Information and shall be responsible for Xcel Energy's actual costs
associated with any effort to protect the Confidential Information provided to Boulder from
disclosure.
5. Disclosure of Confidential Information under this Agreement does not grant Boulder any right or
license to use the Confidential Information other than for the purpose for which it was provided
unless explicitly set forth herein.
6. All Confidential Information, unless otherwise specified in writing, remains the property of Xcel
Energy, and must be used by Boulder only for the purpose intended by Xcel Energy. Upon (i)
completion of the Work and transfer of title to the Boulder System to Boulder or (ii) Boulder's
abandonment of its municipalization efforts, all copies of written, recorded, graphical or other
tangible Confidential Information must either be returned to Xcel Energy, or destroyed by Boulder ,
subject to Boulder's right to retain one copy of each such document in the files of its law department
or outside legal counsel for record purposes only. Boulder will execute a written acknowledgment
that it has complied with the terms of this paragraph. Confidential Information supplied is not to be
reproduced in any form.
7. All Confidential Information retained by Boulder must be in a secure place with access limited to
only Boulder employees (or agents who have a non-disclosure obligation at least as restrictive as this
Agreement) who need to know such information for purposes of this Agreement, and to such third
parties as Xcel Energy has consented to by prior written approval. Boulder must provide the same
care to avoid disclosure or unauthorized use of the Confidential Information as it provides to protect
its own confidential and proprietary information.
8. Xcel Energy makes no representation or warranty, express or implied, with respect to any
Confidential Information.
9. All media releases and public announcements by either Party relating to this Agreement, its subject
matter, or the purpose of this Agreement must be in written form signed by both Parties prior to the
release or announcement.
10. This Agreement is governed by and construed under the laws of the State of Colorado and any action
brought with respect to this Agreement must be brought in the appropriate court in the State of
Colorado.
Page 2 of3
11. This Agreement may not be amended except in written form signed by both Parties.
12. The provisions of this Agreement are to be considered as severable, and in the event that any
provision is held to be invalid or unenforceable, the Parties intend that the remaining provisions will
· remain in full force and effect to the extent possible and in keeping with the intent of the Parties.
13. There are no third party beneficiaries to this Agreement.
14. Failure by a party to enforce or exercise any provision, right or option contained in this Agreement
will not be construed as a present or future waiver of such provision, right or option.
15. Regardless of any termination of the Work or this Agreement, the obligations and commitments
established by this Agreement shall remain in full force and effect until such time as the Parties have
entered into an agreement providing otherwise. During this period, Boulder shall not divulge such
Confidential Information to any third party or use for any purpose other than for review and
evaluation consistent with this Agreement, without the prior written consent of Xcel Energy.
16. Signature pages delivered in counterparts via facsimile or electronic mail shall be deemed the same as
original signatures for purposes of this Agreement.
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney's Office
CITY OF BOULDER
Jane S. Brautigam, City Manager
PUBLIC SERVICE COMPANY OF
COLORADO
By: __________ _
Attest:. ___________ _
Asst. Secretary
Page 3 of3
EXHIBITB
FORM OF LETTER OF CREDIT
[LETTERHEAD OF ISSUING BANK]
[DATE]
IRREVOCABLE LETTER OF CREDIT
NO.
Public Service Company of Colorado, as beneficiary (the "Beneficiary")
1800 Larimer Street, Suite 1400
Denver, Colorado 80202
Ladies and Gentlemen:
At the request of and for the account of the City of Boulder, a Colorado home rule
city (the "Applicant"), we hereby establish in your favor this Irrevocable Letter of Credit
No .. ____ (this "Letter of Credit") in the amount of ______ Dollars
($ ____ _, (the "Stated Amount").
This Letter of Credit is issued for a term effective (unless sooner terminated as
provided below) from the date set forth above through [[Issue Date+ 360 Days], the "Letter of
Credit Expiration Date").
Funds under this Letter of Credit are available to you upon presentation to us of:
(i) a draft at sight ("Sight Draft") drawn on us in the form of Exhibit A hereto
in the amount of such demand (which amount shall not exceed the
Available Amount (as defined below)); and
(ii) a drawing certificate (the "Drawing Certificate") in the form of Exhibit B
hereto duly executed and delivered by your authorized representative.
Presentation of any such Sight Draft and Drawing Certificate shall be made by hand delivery, by
courier or by facsimile at [__J, Attention: [__J. We hereby agree that any Sight Draft drawn
under and in compliance with the terms of this Letter of Credit shall be duly honored by us upon
the receipt of the above-specified Drawing Certificate, if presented (by hand delivery, by courier
or by facsimile) before the Letter of Credit Expiration Date at our office specified above. If a
demand for payment is made by you hereunder at or before 10:00 a.m., [New York City/Boulder
Colorado] time, on any Business Day ( as defined below), and provided that such demand for
payment and the documents presented in connection therewith conform to the terms and
conditions hereof, payment shall be made to you of the amount specified, in immediately
4497381.2
available funds, at or before 2:00 p.m., [New York City/Boulder Colorado] time, on such
Business Day.
If a demand for payment made by you hereunder or the documents presented in
connection therewith do not, in any instance, conform to the terms and conditions of this Letter
of Credit, we shall, as soon as practicable, give you notice that the purported demand for
payment was not effected in accordance with the terms and conditions of this Letter of Credit,
stating the reasons therefor. Upon being notified that the purported demand for payment was not
effected in accordance with this Letter of Credit, you may attempt to correct any defect in such
purported demand for payment if, and to the extent that, you are entitled and able to do so
hereunder. As used in this Letter of Credit, "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of [New York/Colorado]
are authorized or required by law to close.
Upon payment to you of any amount demanded hereunder, we shall be fully
discharged of our obligation under this Letter of Credit with respect to such amount, and we shall
not thereafter be obligated to make any further payments to you or to any other person under this
Letter of Credit with respect to such amount.
Multiple demands for payment may be made under this Letter of Credit. The
amount available to be drawn hereunder at any time (the "Available Amount") shall be equal to
the Stated Amount, as reduced by the aggregate amount of any drawings hereunder and as
increased by Applicant's restorative payments pursuant to the Agreement for Payment of Costs
dated _____ (as amended, supplemented and otherwise modified and in effect from time
to time, the "Agreement") between Beneficiary and Applicant.
Pursuant to C.R.S. 4-5-103(d), the rights and obligations of the Issuer to the
Beneficiary under this Letter of Credit are independent of the existence, performance, or
nonperformance of any contract or arrangement out of which the Letter of Credit arises or which
underlies it, including contracts or arrangements between the Issuer and the Applicant and
between the Applicant and the Beneficiary (including, but not limited to, the Agreement).
This Letter of Credit shall expire and shall be delivered to us for cancellation
upon the first to occur of:
(a) the close of business on the Letter of Credit Expiration Date; or
(b) our receipt of written termination notice from the Beneficiary.
We hereby issue this Letter of Credit in your favor and undertake with you and
bona fide holders that draft(s) drawn under and in compliance with the terms of this Letter of
Credit will be honored upon due presentation on or before the Letter of Credit Expiration Date.
This Letter of Credit is subject to the International Standby Practices (ISP 98) 1998, International
Chamber of Commerce, Publication No. 590 and engages us in accordance with the terms
thereof. The number and the date of this Letter of Credit and the name of our bank must be
quoted on all drafts required. This Letter of Credit's articles are binding on all parties thereto,
unless otherwise expressly stipulated in this Letter of Credit, and to the extent not inconsistent
therewith, shall be governed by the laws of the State of [New York/Colorado], including without
limitation, the Uniform Commercial Code as in effect in such State.
This Letter of Credit sets forth in full the terms of our undertaking. Reference in
this Letter of Credit to other documents or instruments is for identification purposes only and
such reference shall not modify or affect the terms hereof or cause such documents or
instruments to be deemed incorporated herein.
Very truly yours,
[_],
as Issuing Bank
By:. _________ _
Name:
Title:
By: _________ _
Name:
Title:
FORM OF SIGHT DRAFT
Exhibit A to
Letter of Credit
[DATE]
To: [_]
as Issuing Bank
[The address]
Re: Irrevocable Letter of Credit No. (
[ ] (the "Letter of Credit")
) of [name of Issuing Bank), dated
On Sight
Pay to Public Service Company of Colorado, a Colorado corporation (the
"Beneficiary") in immediately available funds [ ] U.S. Dollars($ ____ by 2:00
p.m., [New York City/Boulder Colorado] time, [ on the date hereof, if this Sight Draft is
presented prior to 10:00 a.m., [New York City/Boulder Colorado] time, pursuant to the Letter of
Credit, and otherwise by 2:00 p.m., [New York City/Boulder Colorado] time, on the first
Business Day (as defined in the Letter of Credit) after the date hereof)].**
..
BENEFICIARY
Public Service Company of Colorado
By: ----------------Name:
Title:
If the Sight Draft is presented on the Letter of Credit Expiration Date, the bracketed words shall be replaced by
the following words: "on the second Business Day (as defined in the Letter of Credit) after the date hereof, if
this Sight Draft is presented prior to 10:00 a.m., [New York City/Boulder Colorado] time, pursuant to the Letter
of Credit, and otherwise by 2:00 p.m., [New York City/Boulder Colorado] time, on the third Business Day after
the date hereof, if this Sight Draft is presented after 10:00 a.m., [New York City/Boulder Colorado] time,
pursuant to the Letter of Credit.
FORM OF DRAWING CERTIFICATE
Exhibit B to
Letter of Credit
[DATE]
To: [__J
as Issuing Bank
[Address]
This is a Drawing Certificate under Irrevocable Letter of Credit No. [ ]
of [Name of Issuing Bank], dated ~---~ (the "Letter of Credit")]. Capitalized terms
used herein, and not otherwise defined herein, shall have the meanings assigned to such terms in
the Agreement for Payment of Costs, dated as of[_, 2018] (as amended, supplemented and
otherwise modified and in effect from time to time, the "Agreement") between the City of
Boulder, a Colorado home rule city (the "Applicant"), and Public Service Company of Colorado,
a Colorado corporation, its successors and assigns (the "Beneficiary") or the Letter of Credit, as
applicable.
I, -------~an authorized representative of the Beneficiary, do hereby
certify that:
[This Drawing Certificate, as executed, must contain one, but only one, of the four
alternative paragraphs (a) set forth below, and shall in all cases contain paragraph (b)
set forth below:}
Alternative 1:
(a) Beneficiary has determined, and provided Notice to the Issuer in the format attached
as Addendum 1, that Applicant has failed to timely pay a Payment Request as prescribed in the
Agreement.
Alternative 2:
(a) Beneficiary has determined, and provided Notice to the Issuer in the format attached
as Addendum 2, that Applicant has failed to timely renew or extend the Letter of Credit at least
thirty (30) days prior to its expiration date. The amount of this drawing is the Stated Amount
under the Letter of Credit.
Alternative 3:
(a) Beneficiary has determined, and provided notice to the Issuer in the format attached
as Addendum 3, that the Issuer no longer meets the requirements for an issuing bank in
accordance with the Agreement and Applicant has failed to timely replace Issuer. The amount of
this drawing is the Stated Amount under the Letter of Credit.
Alternative 4:
(a) Beneficiary has determined, and provided Notice to the Issuer in the format attached
as Addendum 4, that Applicant has failed to timely restore the Letter of Credit to its Stated
Amount.
(b) Beneficiary, pursuant to the terms of the Letter of Credit hereby demands payment in
the amount of ~---~ U.S. Dollars ($~---~), such amount to be paid to
Beneficiary by wire transfer in immediately available funds to: [Account Information].
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Drawing
Certificate this [_J day of[ J, [_J.
BENEFICIARY
Public Service Company of Colorado
By: --------------
Name:
Title:
DRAWING CERTIFICATE
ADDENDUM 1
NOTICE OF APPLICANT'S FAILURE TO TIMELY PAY
To: [_J
as Issuing Bank
[The address]
[DATE]
This is Notice to Issuing Bank under Irrevocable Letter of Credit No. [ ] of
[name of Issuing Bank], dated [ ] (the "Letter of Credit"). Capitalized terms used herein, and
not otherwise defined herein, shall have the meanings assigned to such terms in the Letter of
Credit. Issuer is hereby notified that Applicant has failed to timely pay under the terms of the
Agreement for Payment of Costs between Applicant and Beneficiary.
BENEFICIARY
Public Service Company of Colorado
By: --------------
Name:
Title:
DRAWING CERTIFICATE
ADDENDUM2
NOTICE OF APPLICANT'S FAILURE TO TIMELY EXTEND OR RENEW
To: [_]
as Issuing Bank
[The address]
[DATE]
This is Notice to Issuing Bank under Irrevocable Letter of Credit No. [ ] of
[name oflssuing Bank], dated [ ] (the "Letter of Credit"). Capitalized terms used herein, and
not otherwise defined herein, shall have the meanings assigned to such terms in the Letter of
Credit. Issuer is hereby notified that Applicant has failed to timely renew or extend the Letter of
Credit at least thirty (30) days prior to its expiration date. The amount of this drawing is the
Stated Amount under the Letter of Credit.
BENEFICIARY
Public Service Company of Colorado
By: --------------
Name:
Title:
DRAWING CERTIFICATE
ADDENDUM3
NOTICE ISSUER FAILS TO MEET ISSUING BANK REQUIREMENTS
To: LJ
as Issuing Bank
[The address]
[DATE]
This is Notice to Issuing Bank under Irrevocable Letter of Credit No. [ ] of
[name oflssuing Bank], dated [ ] (the "Letter of Credit"). Capitalized terms used herein, and
not otherwise defined herein, shall have the meanings assigned to such terms in the Letter of
Credit. Issuer is hereby notified that Issuer no longer meets the requirements for an issuing bank
in accordance with the Agreement for Payment of Costs between Applicant and Beneficiary, and
Applicant has failed to timely replace Issuer. The amount of this drawing is the Stated Amount
under the Letter of Credit.
BENEFICIARY
Public Service Company of Colorado
By: ---------------Name:
Title:
DRAWING CERTIFICATE
ADDENDUM4
NOTICE OF APPLICANT'S FAILURE TO TIMELY RESTORE STATED AMOUNT
To: [_J
as Issuing Bank
[The address]
[DATE]
This is Notice to Issuing Bank under Irrevocable Letter of Credit No. [ ] of
[name of Issuing Bank], dated [ ] (the "Letter of Credit"). Capitalized terms used herein, and
not otherwise defined herein, shall have the meanings assigned to such terms in the Letter of
Credit. Issuer is hereby notified that Applicant has failed to timely restore the Letter of Credit to
its Stated Amount.
BENEFICIARY
Public Service Company of Colorado
By: --------------
Name:
Title:
EXHIBITC
FORM OF PRESENTATION (FOR SECURITY)
FORM OF SIGHT DRAFT
[DATE]
To: [_J
as Issuing Bank
[Address]
Re: [Irrevocable Letter of Credit No. ( J of [Name of Issuing Bank],
dated ( -------] (the "Letter of Credit") OR (Line of Credit Security Identified
as of (Name of Issuing Bank], dated ( l (the
"Security").]
On Sight
Pay to Public Service Company of Colorado, a Colorado corporation (the "Beneficiary") in
immediately available funds~---~ U.S. Dollars($ ___ ~ by 2:00 p.m., [New York
City/Boulder Colorado l time, on the date hereof, if this Sight Draft is presented prior to 10:00 a.m.,
[New York City/Boulder Colorado] time, pursuant to the [Letter of Credit/Security], and otherwise
by 2:00 p.m., [New York City/Boulder Colorado] time, on the first Business Day (as defined in
the [Letter of Credit/Security] after the date hereof.••
BENEFICIARY
Public Service Company of Colorado
By: ---------------
Name:
Title:
•• If the Sight Draft is presented on the Letter of Credit/Security Expiration Date, the bracketed words shall be
replaced by the following words: "on the second Business Day (as defined in the Letter of Credit/Security)
after the date hereof, if this Sight Draft is presented prior to 10:00 a.m., [New York City/Boulder Colorado]
time, pursuant to the Letter of Credit/Security, and otherwise by 2:00 p.m., [New York City/Boulder Colorado]
time, on the third Business Day after the date hereof, if this Sight Draft is presented after 10:00 a.m., [New
York City/Boulder Colorado] time, pursuant to the Letter of Credit/Security.
4502862.1
FORM OF DRAWING CERTIFICATE
(Exhibit Includes modifications for use in connection with non-letter of credit security)
To: [_]
as Issuing Bank
[Address]
[DATE]
This is a Drawing Certificate under [Irrevocable Letter of Credit No. [ ] of [Name of
Issuing Bank], dated ~----(the "Letter of Credit")] OR [Line of Credit Security
Identified as ______ of [Name of Issuing Bank], dated _______ (the
"Security").] Capitalized terms used herein, and not otherwise defined herein, shall have the
meanings assigned to such terms in the Agreement for Payment of Costs, dated as of [_, 2018]
(as amended, supplemented and otherwise modified and in effect from time to time, the
"Agreement") between the City of Boulder, a Colorado home rule city (the "City" or "Applicant"),
and Public Service Company of Colorado, a Colorado corporation, its successors and assigns
("PSCo" or the "Beneficiary") or the [Letter of Credit/Security], as applicable.
I,-------~ an authorized representative of the Beneficiary, do hereby certify that:
[This Drawing Certificate, as executed, must contain one, but only one, of the three
alternative paragraphs (a) set forth below and shall in all cases contain paragraph (b) set
forth below.]
Alternative I:
(a) Beneficiary has determined, and provided Notice to the Issuer in the format attached
as Addendum I, that Applicant has failed to timely pay a Payment Request as prescribed in the
Agreement.
Alternative 2:
(a) Beneficiary has determined, and provided Notice to the Issuer in the format attached
as Addendum 2, that Applicant has failed to timely renew or extend the [Letter of Credit/Security]
at least thirty (30) days prior to its expiration date. The amount of this drawing is the Stated
Amount under the [Letter of Credit/Security].
Alternative 3:
(a) Beneficiary has determined, and provided notice to the Issuer in the format attached as
Addendum 3, that the Issuer no longer meets the requirements for an issuing bank in accordance
with the Agreement and Applicant has failed to timely replace Issuer. The amount of this drawing
is the Stated Amount under the [Letter of Credit/Security].
Alternative 4:
(a) Beneficiary has detennined, and provided Notice to the Issuer in the fonnat attached
as Addendum 4, that Applicant has failed to make timely payment to restore the Stated Amount
balance.
(b) Beneficiary, pursuant to the tenns of the [Letter of Credit/Security] hereby demands
payment in the amount of~---~ U.S. Dollars($~---~), such amount to be paid to
Beneficiary by wire transfer in immediately available funds to: [Account Infonnation].
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Drawing
Certificate this [_] day of [ ], [_J.
BENEFICIARY
Public Service Company of Colorado
By: ---------------
Name:
Title:
DRAWING CERTIFICATE
ADDENDUM I
NOTICE OF APPLICANT'S FAILURE TO TIMELY PAY
To: [_)
as Issuing Bank
[Address]
[DATE)
This is Notice to Issuing Bank under [Irrevocable Letter of Credit No. [ ) of [name of Issuing
Bank], dated [ ) (the "Letter of Credit")) OR [Line of Credit Security Identified as
of [Name of Issuing Bank], dated ~-----~ (the "Security").].
Capitalized terms used herein, and not otherwise defined herein, shall have the meanings assigned
to such terms in the [Letter of Credit/Security). Issuer is hereby notified that Applicant has failed
to timely pay under the terms of the Agreement for Payment, of Costs between Applicant and
Beneficiary.
BENEFICIARY
Public Service Company of Colorado
By:
Name:
Title:
DRAWING CERTIFICATE
ADDENDUM2
NOTICE OF APPLICANT'S FAILURE TO TIMELY EXTEND OR RENEW
To: [_J
as Issuing Bank
[Address]
[DATE]
This is Notice to Issuing Bank under [Irrevocable Letter of Credit No. [ ] of [name oflssuing
Bank], dated [ ] (the "Letter of Credit")] OR [Line of Credit Security Identified as
______ of [Name of Issuing Bank], dated ------~ (the "Security").].
Capitalized terms used herein, and not otherwise defined herein, shall have the meanings assigned
to such terms in the [Letter of Credit/Security]. Issuer is hereby notified that Applicant has failed
to timely renew or extend the [Letter of Credit/Security] at least thirty (30) days prior to its
expiration date. The amount of this drawing is the Stated Amount under the [Letter of
Credit/Security].
BENEFICIARY
Public Service Company of Colorado
By: --------------
Name:
Title:
ORA WING CERTIFICATE
AOOENOUM3
NOTICE ISSUER FAILS TO MEET ISSUING BANK REQUIREMENTS
To: [_J
as Issuing Bank
[Address]
[OATE]
This is Notice to Issuing Bank under [Irrevocable Letter of Credit No. [ ] of [name of Issuing
Bank], dated [ ] (the "Letter of Credit")] OR [Line of Credit Security Identified as
______ of [Name of Issuing Bank], dated _______ (the "Security").]
Capitalized terms used herein, and not otherwise defined herein, shall have the meanings assigned
to such terms in the [Letter of Credit/Security]. Issuer is hereby notified that Issuer no longer meets
the requirements for an issuing bank in accordance with the Agreement for Payment of Costs
between Applicant and Beneficiary, dated ____ (as amended, supplemented and otherwise
modified and in effect from time to time) and that Applicant has failed to timely replace Issuer.
The amount of this drawing is the Stated Amount under the [Letter of Credit/Security].
BENEFICIARY
Public Service Company of Colorado
By: ---------------Name:
Title:
DRAWING CERTIFICATE
ADDENDUM4
NOTICE OF APPLICANT'S FAILURE TO TIMELY RESTORE STATED AMOUNT
To: [_]
as Issuing Bank
[Address]
[DATE]
This is Notice to Issuing Bank under [Irrevocable Letter of Credit No. [ ] of [name of Issuing
Bank], dated [ ] (the "Letter of Credit")] OR [Line of Credit Security Identified as
of [Name of Issuing Bank], dated .__ _____ _, (the "Security").]
Capitalized terms used herein, and not otherwise defined herein, shall have the meanings assigned
to such terms in the [Letter of Credit/Security]. Issuer is hereby notified that Applicant has failed
to timely restore the [Letter of Credit/Security] to its Stated Amount.
BENEFICIARY
Public Service Company of Colorado
By: --------------
Name:
Title:
EXHIBITD
INSURANCE REQUIREMENTS
(a) Limits: Each Party shall procure and maintain in force during the term of this
Agreement, at its own cost, the following minimum coverages:
(I) Workers' Compensation and Employers' Liability:
State of Colorado:
(2) General Liability:
(i)
(ii)
General Aggregate Limit:
Each Occurrence Limit:
(3) Automobile Liability:
Bodily Injury & Property Damage Combined Single Limit:
(b) Coverage: Insurance required by this Agreement shall:
(I) Be primary coverage;
Statutory
$2,000,000
$1,000,000
$1,000,000
(2) Include the City its officials and employees as additional insureds as their interest
may appear (except for Worker's Compensation and Professional Liability).
Additional insured endorsement should be at least as broad as ISO form CG20 I 0
for General Liability coverage and similar forms for auto liability;
(3) Include a waiver of subrogation for General Liability coverage;
( 4) Be issued from a company allowed to do business in Colorado having an AM
Best rating of at least A-VI; and
(5) Be procured and maintained in full force and effect for duration of work.
(c) Certificates: Certificates oflnsurance shall be forwarded to the other Party's Purchasing
department.
( d) Cancelation: Within seven days after receiving insurer's notice of cancellation or
reduction in coverage, the Party that receives such notice, or its insurance broker, shall notify the
other Party. In either such case, the Party receiving such notice shall promptly obtain and submit
proof of substitute insurance complying with these insurance requirements.
4511223.1
EXHIBIT 6
TO
MOTION TO DISMISS FIRST AMENDED PETITION IN CONDEMNATION FOR
LACK OF SUBJECT MATTER JURISDICTION PURSUANT TO COLO. R. CIV. P.
12(B)(1)
Decision No. C19-0151-I
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO
PROCEEDING NO. 15A-0589E
IN THE MATTER OF THE APPLICATION OF THE CITY OF BOULDER, COLORADO FOR
APPROVAL OF THE PROPOSED TRANSFER OF ASSETS FROM PUBLIC SERVICE
COMPANY OF COLORADO TO THE CITY AND ASSOCIATED AUTHORIZATIONS AND
RELIEF.
INTERIM DECISION STAYING
PROCEEDING AND REQUIRING FILINGS
Mailed Date: February 8, 2019
Adopted Date: February 6, 2019
I. BY THE COMMISSION
A. Statement
1. By this Decision, we grant, with modifications, the Joint Unopposed Motion to
Stay Commission Action on Pending Matters for Two Weeks and for Waiver of Response Time
(Joint Motion to Stay) filed by the City of Boulder (Boulder) and Public Service Company of
Colorado (Public Service) on February 1, 2019.
2. Action on all pending matters in this Proceeding is stayed until further order.
Consistent with the discussion below, Boulder may file responses to certain pleadings to be filed
by Public Service on February 15, 2019. In addition, we direct Boulder to file, no later than
February 15, 2019, any court filings or related written documentation exchanged with Public
Service regarding the commencement of condemnation proceedings. We also direct Boulder to
confer with the parties to develop and to file a proposal for addressing and resolving all
outstanding issues and pleadings. Colorado PUC E-Filings System
Before the Public Utilities Commission of the State of Colorado
Decision No. C19-0151-I PROCEEDING NO. 15A-0589E
2
3. By staying all pending matters in this Proceeding, we rescind the referral of
matters to an Administrative Law Judge (ALJ), pursuant to Ordering Paragraph 3 of Decision
No. C17-0750, issued on September 14, 2017. We will address that referral when we lift the stay
ordered herein.
B. Background
4. On September 14, 2017, the Commission issued Decision No. C17-0750, granting
in part and with conditions, and denying in part, Boulder’s Third Supplemental Verified
Application for Approval of the Proposed Transfer of Assets from Public Service Company of
Colorado filed May 12, 2017. Decision No. C17-0750 satisfied the requirements of the Boulder
District Court in Order Re: Judicial Review of the Colorado Public Utilities Commission
Decision, City of Boulder v. Pub. Utils. Comm’n, Case No. 14CV30047 (Boulder District Court,
January 14, 2015) by determining, to the extent necessary as of the date of the order, how Public
Service’s facilities should be assigned, divided, or jointly used to protect Public Service’s electric
distribution system’s effectiveness, reliability, and safety.
5. Decision No. C17-0750 assigned three conditions to the approval for transfer
of certain assets from Public Service to Boulder. Boulder was directed to: (1) file an agreement
reached between Boulder and Public Service that provides Public Service permanent
non-exclusive easements and other necessary real property rights for the location of its electric
facilities within Boulder’s city limits that are necessary for Public Service to provide service to
its customers after separation; (2) correct the errors and omissions from the list of assets for
transfer outside of the substations and resubmit the revised list of assets for final approval; and
(3) file an agreement (or multiple agreements) between Boulder and Public Service that
address(es) the payment by Boulder to Public Service of the costs incurred by Public Service to
Before the Public Utilities Commission of the State of Colorado
Decision No. C19-0151-I PROCEEDING NO. 15A-0589E
3
effectuate municipalization and the separation of Public Service’s system into two separate
systems.
6. Public Service was directed to assist Boulder in good faith in order to satisfy the
conditions of Decision No. C17-0750.
7. Boulder requested and received four extensions to make the required filings.1
Additionally, a status conference was held on June 29, 20182 at which Boulder and Public
Service appeared and answered questions regarding the negotiation process for the agreements
and the corrected asset list.
8. On October 26, 2018, Boulder and Public Service filed the Joint Notice of Filing
of Permanent Easement Agreement, Cost Agreements, and Corrected List of Assets Outside
Substations (Joint Notice), providing three filings required by Decision No. C17-0750:
1) An agreement between Boulder and Public Service through which Public
Service would receive permanent non-exclusive easements and other real
property rights for the location of Public Service’s electric facilities within
Boulder’s city limits that are necessary for Public Service to provide
service to its customers after the separation of Boulder from the system;
2) A corrected list of assets for transfer outside of substations;
3) An agreement(s) between Boulder and Public Service addressing the
payment by Boulder to Public Service for costs incurred to separate the
systems.
9. In the Joint Notice, Boulder and Public Service noted that Paragraph 156 of
Decision No. C17-0750 requires identification of instances where Public Service’s gas or
transmission facilities share an easement with the electric distribution facilities and that Public
Service identify the portion of any such easement necessary for provision of gas or transmission
1 Decision No. C17-1065-I, issued on December 22, 2017; Decision No. C18-0181-I, issued on March 14,
2018; Decision No. C18-0557-I, issued on July 16, 2018; Decision No. C18-0742-I, issued on August 31, 2018.
2 The status conference was ordered by Decision No. C18-0492-I, issued on June 20, 2018.
Before the Public Utilities Commission of the State of Colorado
Decision No. C19-0151-I PROCEEDING NO. 15A-0589E
4
services. Boulder and Public Service stated that it would be time-consuming and expensive to
identify the large number of easements that Public Service must retain in order to provide gas or
transmission service. Therefore, they determined that if they negotiated an easement sharing
agreement, identification of the portions of each easement required for gas and transmission
facilities would not be necessary. An easement sharing agreement would protect Public Service’s
ability to provide gas and transmission services while not shifting costs to gas and transmission
customers. The agreement would also allow Boulder to use the easements for the existing
electric distribution facilities it acquires.
10. On November 16, 2018, Boulder and Public Service filed a Motion for
Modification of Certain Provisions of Paragraphs 155 and 156 of Decision No. C17-0750
(Motion for Modification) that included an Easement Sharing Agreement.
11. Also on November 16, 2018, Boulder filed a Motion for Final Approval of
Designation of Assets Outside Substations for Transfer (Motion for Final Approval). In the
Motion for Final Approval, Boulder stated that it was authorized to state that Public Service did
not oppose the Motion for Final Approval.
12. The 30-day period, established by Decision No. C17-0750, during which Parties
could request a hearing on the cost agreements, easement agreements, and corrected asset list
began on November 16, 2018.3
13. On December 17, 2018, IBM Corp. (IBM) timely filed a Response, Request for
Hearing, Request for Clarification, and Request for Status Conference; Tri-State Generation and
Transmission Association Inc. (Tri-State) timely filed a Response, Request for Clarification, and
3 Decision No. C19-0004, issued on January 3, 2019
Before the Public Utilities Commission of the State of Colorado
Decision No. C19-0151-I PROCEEDING NO. 15A-0589E
5
Request for Status Conference; and Staff of the Commission (Staff) timely filed a Request for
Hearing. In accordance with Ordering Paragraph 3 of Decision No. C17-0750, the filings made
by IBM, Tri-State, and Staff were referred to an ALJ.
14. The assigned ALJ held a pre-hearing conference on January 15, 2019 and set a
hearing for February 25 and 26, 2019.4
15. On January 18, 2019, Public Service filed a Notice of Withdrawal from the Joint
Motion for Modification; Notice of the Company’s Objections to the List of Assets; or
Alternatively, Motion for Leave to File Out of Time Objections to the Asset List and Request for
Hearing (Notice of Withdrawal). In the Notice of Withdrawal, Public Service states that it
withdraws its support for the Joint Motion for Modification and objects to Boulder’s Motion for
Final Approval.
16. On January 25, 2019, Public Service filed a Petition for Declaratory Orders with
Regard to the Portion of Commission Decision C17-0750 Concerning Public Service Assets
(Real and Personal) Inside Substations (Petition for Declaratory Orders). In this filing, Public
Service requests that the Commission issue an order stating that Boulder may not commence
condemnation proceedings unless and until Boulder and Public Service reach mutual agreement
on the transfer of assets inside existing substations and an application requesting the designation
of assets inside substations has been granted.
17. On January 29, 2019, IBM filed a Notice of Support and Joinder of Relief Sought
in Petition for Declaratory Order. IBM states that it supports the Petition for Declaratory Orders
and requests that the Commission declare that Boulder may not commence condemnation
4 Decision No. R19-0075-I issued on January 18, 2019
Before the Public Utilities Commission of the State of Colorado
Decision No. C19-0151-I PROCEEDING NO. 15A-0589E
6
proceedings to acquire any Public Service assets inside substations unless and until Boulder and
Public Service have reached an agreement on the transfer of assets inside the substations, and an
application requesting the designation of assets inside substations is filed and granted.
18. On January 29, 2019, Staff filed a Notice Concerning Public Service Company’s
Petition for a Declaratory Order. In this filing, Staff recommends that the Commission issue a
declaratory order as provided for in Rule 1304(i)(II) of the Rules of Practice and Procedure,
4 Code of Colorado Regulations 723-1. Staff states that if the Commission does not issue a
declaratory order, the municipalization process may stall and “become little more than an
exercise in complex legal gymnastics.”5
19. On January 30, 2019, Tri-State filed a Notice Regarding Public Service
Company’s Petition for Declaratory Orders, noting that Tri-State has concerns similar to Public
Service with regard to its assets and property rights associated with Substation F. Tri-State states
that it has been working with Boulder and Public Service to obtain information regarding
Substation F, but that there are questions regarding the accuracy of the lists of assets and property
rights outside and inside substations and plans for separation of the electric distribution systems.
For these reasons, Tri-State states that it supports the Petition for Declaratory Orders, as it relates
to the process for identification of assets and timing of the acquisition of assets.
20. On February 1, 2019, Boulder and Public Service filed the Joint Motion to Stay.
In the Joint Motion to Stay, Boulder and Public Service state that they are engaging in
negotiations regarding a number of disputed matters, including Public Service’s Notice of
5 Staff Notice at p. 3.
Before the Public Utilities Commission of the State of Colorado
Decision No. C19-0151-I PROCEEDING NO. 15A-0589E
7
Withdrawal and Petition for Declaratory Orders. Boulder and Public Service state that they wish
to confer over the next two weeks in an attempt to resolve issues raised in those filings.6
21. Specifically, Boulder and Public Service request that the Commission stay action
on the Notice of Withdrawal and the Petition for Declaratory Orders for two weeks. Any
response to those filings would then be due on February 15, 2019.
C. Findings and Conclusions
22. We agree with the relief sought by Boulder and Public Service regarding a stay of
the Notice of Withdrawal and the Petition for Declaratory Orders. However, we find good cause
to stay all deadlines and actions on all pending matters in this Proceeding until we lift that stay
by separate decision. We therefore grant, in part, the unopposed Joint Motion to Stay.
23. Boulder is authorized to file responses to the Notice of Withdrawal and to the
Petition for Declaratory Orders as proposed on February 15, 2019. We decline to establish
February 15, 2019 as a deadline for such responses, because Boulder has requested to extend
filing deadlines multiple times in this Proceeding for various reasons.7 Boulder has demonstrated
interest in moving this Proceeding to final resolution given the filing of its Motion for Final
Approval on November 16, 2019.
24. In order to better understand where Boulder is in its process of acquiring assets by
agreement with Public Service or through condemnation, we require Boulder to file, no later than
6 On February 1, 2019, Boulder and Public Service filed a Motion to Modify Interim Decision R19-0075-I,
to Toll Proceeding for Two Weeks. (Decision No. R19-0075-I, issued January 18, 2019, established a procedural
schedule for a hearing on issues raised with regard to the compliance filings made by Boulder as required by
Decision No. C17-0750.) On February 4, 2019, the ALJ issued Decision No. R19-0136-I granting the Motion to
Modify Interim Decision No. R19-0075-I.
7 If Boulder does not file Responses to the Notice of Withdrawal and to the Petition for Declaratory Orders
by February 15, 2019, it does not need to file a request for extension to file.
Before the Public Utilities Commission of the State of Colorado
Decision No. C19-0151-I PROCEEDING NO. 15A-0589E
8
February 15, 2019, any court filings or related documentation exchanged with Public Service
regarding the commencement of condemnation proceedings.
25. Furthermore, in order to move this proceeding toward resolution, we direct
Boulder to confer with the parties to this Proceeding to develop and to file a proposal for
addressing and resolving all outstanding issues and pleadings, including Public Service’s Notice
of Withdrawal and Petition for Declaratory Orders. That proposal shall be filed concurrently
with Boulder’s response to the Notice of Withdrawal and Petition for Declaratory Orders.
26. Parties shall have seven days to file responses to the filings made by Boulder
pursuant to this Decision.
27. As a result of the stay on all deadlines and actions on all pending matters in this
Proceeding that we order here, including the procedural schedule and hearing established by the
ALJ through Decision No. R19-0075-I, issued January 18, 2019 for a hearing on issues raised
with regard to the compliance filings made by Boulder as required by Decision No. C17-0750.),
we find it necessary to rescind our referral of matters to the ALJ, pursuant to Ordering Paragraph
No. 3. of Decision No. C17-0750. At such time that we lift the stay in this proceeding, we
anticipate that we will reinstate that referral.
II. ORDER
A. It Is Ordered That:
1. The Joint Unopposed Motion to Stay Commission Action on Pending Matters for
Two Weeks and for Waiver of Response Time filed by the City of Boulder (Boulder) and Public
Service Company of Colorado (Public Service) on February 1, 2019 is granted, in part,
consistent with the discussion above. Response time to the motion is waived.
Before the Public Utilities Commission of the State of Colorado
Decision No. C19-0151-I PROCEEDING NO. 15A-0589E
9
2. All procedural deadlines and Commission action on all pending matters in this
Proceeding are stayed, consistent with the discussion above.
3. Boulder is authorized to respond to the Notice of Withdrawal from the Joint
Motion for Modification; Notice of the Company’s Objections to the List of Assets; or
Alternatively, Motion for Leave to File Out of Time Objections to the Asset List and Request for
Hearing, filed on January 18, 2019 by Public Service, on February 15, 2019, consistent with the
discussion above.
4. Boulder is authorized to respond to the Petition for Declaratory Orders with
Regard to the Portion of Commission Decision C17-0750 Concerning Public Service Assets
(Real and Personal) Inside Substations, filed on January 25, 2019 by Public Service, on
February 15, 2019, consistent with the discussion above.
5. No later than February 15, 2019, Boulder shall file any court filings or related
documentation exchanged with Public Service regarding the commencement of condemnation
proceedings, consistent with the discussion above.
6. Boulder shall confer with parties to this Proceeding and shall file a proposal for
addressing and resolving the outstanding issues in the proceeding, consistent with the discussion
above.
7. Response time to filings made filed by Boulder pursuant to this Decision shall be
seven days.
8. The referral of matters to an Administrative Law Judge, pursuant to Ordering
Paragraph No. 3. of Decision No. C17-0750, issued on September 14, 2017, is rescinded.
9. This Decision is effective upon its Mailed Date.
Before the Public Utilities Commission of the State of Colorado
Decision No. C19-0151-I PROCEEDING NO. 15A-0589E
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B. ADOPTED IN COMMISSIONERS’ WEEKLY MEETING
February 6, 2019.
(S E A L)
ATTEST: A TRUE COPY
Doug Dean,
Director
THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF COLORADO
JEFFREY P. ACKERMANN
________________________________
FRANCES A. KONCILJA
________________________________
JOHN GAVAN
________________________________
Commissioners
EXHIBIT 7
TO
MOTION TO DISMISS FIRST AMENDED PETITION IN CONDEMNATION FOR
LACK OF SUBJECT MATTER JURISDICTION PURSUANT TO COLO. R. CIV. P.
12(B)(1)
1
BEFORE THE PUBLIC UTILITIES COMMISSION
STATE OF COLORADO
PROCEEDING NO. 15A-0589E
IN THE MATTER OF THE APPLICATION OF THE CITY OF BOULDER,
COLORADO FOR APPROVAL OF THE PROPOSED TRANSFER OF ASSETS
FROM PUBLIC SERVICE COMPANY OF COLORADO TO THE CITY AND
ASSOCIATED AUTHORIZATIONS AND RELIEF
STAFF’S RESPONSE TO BOULDER’S NOTICE
Boulder’s recently-filed Notice suggests an ongoing cooperative effort by the
City and Public Service Company of Colorado, designed to satisfy important
milestones necessary for the creation of an operational municipal utility. According
to this Notice, the City’s proposed process to resolve all outstanding issues will
culminate with the filing of: (1) a revised Exhibit 5A; (2) a revised Exhibit 5B; (3) a
list of substation facilities and real property interests; (4) a Facilities Study
Agreement; and (5) other completed substation agreements including, presumably,
all necessary co-location, operations and maintenance Agreements (“COM
Agreements”), as well as an updated Agreement of Payment for Costs.1 Since the
City plans to file all five of these either after receiving them from the Company or
after the City and Company both sign them, the proposed process represents a
viable and comprehensive pathway for the City and the Company to cooperatively
resolve all outstanding issues. This is very good news. Once the City submits these
1 See The City of Boulder’s Notice Regarding Proposed Process to Address and
Resolve Outstanding Issues, Proceeding No. 15A-0589E, June 12, 2019 ¶ 11.
Colorado PUC E-Filings System
2
five filings, the proposed process gives other parties to the proceeding fourteen days
to comment upon them.2 After receiving these five filings, the Commission will be
in a prime position to act in accordance with its August 2017 post-hearing order on
matters concerning lists of assets for transfer and substation-related matters. This
proceeding will then shift to new phases of the municipalization process.
But serious problems lie ahead which could frustrate or even prevent the
cooperative efforts between Boulder and Public Service. The City’s “Combined
Response,”3 submitted on the same day as its recently-filed Notice, paints a much
different picture of the working relationship between the City and the Company
than what comes across from its Notice. The Combined Response suggests that the
two parties still appear willing, albeit grudgingly, to continue working together to
submit the same five items promised by the recently-filed Notice. The City and the
Company do not, however, agree as to the Commission’s proper role in reviewing
and approving these five items. The City appears to view the filings as a means of
keeping the Commission apprised of the City’s progress towards condemnation,
2 The City’s Notice does not specify whether Boulder plans to file these five items all
or one time or to roll them out piece-by-piece. In order to avoid creating a complex
situation that induces multiple response filings from multiple parties, it may prove
helpful to initiate the fourteen-day window only after the Commission receives all
five promised items. That way the Commission will receive just one response filing
per party to the proceeding.
3 See generally The City of Boulder’s Combined Response in Opposition to: (1)
Petition for Declaratory Orders; and (2) Notice of PSCo’s Withdrawal from the Joint
Motion for Modification; Objections to the List of Assets; or in the Alternative,
Motion for Leave to File Out of Time Objections; and Request for Oral Argument,
Proceeding No. 15A-0589E, June 12, 2019.
3
while the Company appears to insist that the Commission must approve all the
filings as a prerequisite for condemnation. Both views cannot be correct.
Fortunately, as first iterated back in January4 and restated here, the
Commission possesses an ideal tool to quickly and decisively resolve this
disagreement: accepting the Company’s petition and issuing a declaratory order
pursuant to its Rule 1304(i)(II) powers that clarifies the Commission’s remaining
expectations for the City and the Company before the City initiates a condemnation
proceeding. What was true in January still holds true five months later, “if the
Commission does not act on the petition, the municipalization process may stall and
become little more than an exercise in complex legal gymnastics.”5 The City’s
Combined Response underscores the differences between the City and the
Company’s interpretation of the Commission’s August 2017 post-hearing order,6
and these differences are highly unlikely to disappear absent Commission action.
Recent action by the Boulder City Council also highlights the immediate need
to resolve, once and for all, the City and the Company’s different interpretations as
to the Commission’s proper role in the municipalization process. On June 4th, the
City Council passed the motion in Attachment 1, which suggests, once again, that
the City strives to initiate a condemnation action in the very near future, perhaps
even before Commission action on the five items submitted by the City at the
culmination of the process outlined in the City’s recently-filed Notice.
4 Staff’s Notice Concerning Public Service Company’s Petition for a Declaratory
Order, Proceeding No. 15A-0589E, Jan. 22, 2018.
5 Id. at 3.
4
Alternatively, the passage of the motion may suggest nothing more than that the
City Council wishes to move quickly, but only after the Commission finishes its
work. Whatever the City Council’s motivation, a declaratory order from the
Commission will enable the City and the Company to confidently proceed in the
same direction as this complex process of creating a new municipal utility
continues.
Hence, the Commission should allow the process proposed by Boulder’s
Notice to move ahead. And while the Commission awaits the City’s five filings, plus
any responsive filings to be submitted within fourteen days by the other parties, it
should seize the opportunity to reduce the rising tension between the City and the
Company by clarifying the intent of its August 2017 post-hearing decision by
issuing an appropriate declaratory order at the appropriate time.
6 Proceeding No. 15A-0589E, Commission Decision No. C17-0750.
5
DATED June 19, 2019.
Respectfully submitted,
PHILIP J. WEISER
Attorney General
/s/ Paul J. Kyed
/s/ Charlotte M. Powers
Anne K. Botterud, 20726*
First Assistant Attorney General
Paul J. Kyed, 37814*
Senior Assistant Attorney General
Charlotte M. Powers, 47909*
Assistant Attorney General
Revenue and Utilities Section
Attorneys for Trial Staff of the
Public Utilities Commission
Ralph L. Carr Colorado Judicial Center
1300 Broadway, 8th Floor
Denver, Colorado 80203
Telephone: (720) 508-6334 (Botterud)
Telephone: (720) 508-6332 (Kyed)
Telephone: (720) 508-6331 (Powers)
Fax: (720) 508-6038
Email: anne.botterud@coag.gov
Email: paul.kyed@coag.gov
Email: charlotte.powers@coag.gov
*Counsel of Record
CERTIFICATE OF SERVICE
This is to certify that on June 19, 2019 I have served the foregoing STAFF’S
RESPONSE TO BOULDER’S NOTICE upon all parties listed in the Commission’s
E-Filing system for this proceeding.
/s/ Kellie M. Anderson