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024 PSCo Reply in Support of Motion to Dismiss for Lack of Subject Matter Jurisdiction 1 US.124388638.11 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 REPLY IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED PETITION IN CONDEMNATION FOR LACK OF SUBJECT MATTER JURISDICTION PURSUANT TO COLO. R. CIV. P. 12(b)(1) I. INTRODUCTION Judge LaBuda’s Final Opinion—discussed in the Motion to Dismiss (“Motion”)—holds: The PUC has the authority to regulate public utilities and the 2 US.124388638.11 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. …. 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. Ex. 1 (Final Opinion) at 12. Contrary to the City’s argument, the Final Opinion did not limit the PUC’s jurisdiction to issues regarding service of outside-the-City customers. Instead, the Final Opinion required the City to commence proceedings so that the PUC can “determine the allocation and transfer of assets … which provide service within the City of Boulder as well as unincorporated Boulder … prior to the City’s condemnation.” Id. The Court should reject the City’s arguments and dismiss this lawsuit for the following reasons: First, issue preclusion based on two prior orders of the Boulder County District Court bars Boulder’s condemnation lawsuit. Despite the City’s characterization, the Final Opinion’s holding is clear: Boulder cannot move forward with condemnation until the PUC has approved assets for transfer. That has not happened. Moreover, Boulder cannot re-litigate the issue or otherwise use this condemnation action as an end run to seek reconsideration or appeal of final decisions in other proceedings. Moreover, Boulder fails to address Judge LaBuda’s other order dismissing the City’s earlier condemnation action (the “Dismissal Order”), which also bars this lawsuit. Second, the City’s argument that the PUC lost jurisdiction in 2016 (when the City finally decided to drop its effort to serve out-of-City customers), is belied by its own participation in the 3 US.124388638.11 PUC proceedings over the last three years, including its claimed payment of nearly $1 million in expenses ordered as part of those proceedings. Third, the City does not address PSCo’s second basis for dismissal: binding Supreme Court authority that requires the Court to dismiss this lawsuit until the PUC completes its proceedings. Finally, dismissal for lack of subject matter jurisdiction is mandatory. There is nothing unprecedented or extraordinary about this result and parallel proceedings are not legally an option II. FACTUAL AND PROCEDURAL CLARIFICATION Boulder’s Response requires clarification of several factual and procedural issues. On August 8, 2019, the PUC moved to intervene and dismiss this action on jurisdictional grounds, making clear that the PUC disagrees with the City’s interpretation of the PUC’s prior decisions. Like PSCo’s Motion, the PUC’s motion to dismiss recognizes that the “Boulder District Court has already considered the agency and court roles in this matter and resolved it is the PUC’s responsibility to determine how Public Service’s facilities should be assigned, divided, or jointly used…. Until the PUC makes this determination, there is no ‘property’ for the Court to consider for condemnation.… Once the PUC has issued a final decision approving the designation of assets for transfer, Boulder my re-file a petition ….” PUC Mot. to Dismiss at 2–3. Additionally, in its Response, the City either does not address or does not dispute any of the following facts raised by the Motion: • The City commenced the PUC Proceedings to satisfy the Final Opinion’s requirement that the PUC “determine the allocation and transfer of assets prior to the City’s condemnation.” • The City seeks to acquire facilities both within and outside the City limits that are currently used at least in part to serve out-of-City customers. See Resp. at 15 n. 16. • The PUC Proceedings continue to this day. See, e.g., Response at 2 4 US.124388638.11 n.3 (“The City has requested that the PUC make a final decision on all pending issues ….”), 12, 17, 18 (describing “the ongoing proceedings before the PUC”); see also PUC Motion to Dismiss at 7–11 (describing some of the outstanding issues); Aug. 16, 2019, Cross Pet. of Int’l Bus. Mach. Corp. ¶¶ 4, 8 (describing ongoing PUC proceedings, including proceedings related to the substation that provides service to IBM’s Boulder campus which “houses servers that store and process data for some of the world’s most critical public and private institutions”). • The Cost Agreement that addresses the payment to PSCo of approximately $110 million in costs that would otherwise be pursued as damages in this case, see Aug. 29, 2019, Resp. to Mot. to Intervene at 8–9, requires issuance of a final PUC order approving its terms without modification before it becomes effective. • The PUC has not issued an order approving either the Cost Agreement or Easement Sharing Agreement (or any other agreement submitted by the parties). • The PUC has not issued an order confirming satisfaction of the conditions it set for designation of certain assets outside substations for potential transfer. • The Third Application Order denied the City’s request to designate assets within substations for potential transfer. • No subsequent order authorizing assets within substations for potential transfer has ever issued. See also PUC Motion to Dismiss at 6 (“The PUC has not issued a final decision approving the designation of assets for transfer.”). • The PUC believes it must grant the City final approval before condemnation proceedings can commence. See id. (“Once the PUC makes this determination [regarding the assignment, division, and joint use of facilities], jurisdiction vests in the Boulder District Court to adjudicate the condemnation and pricing of assets.”). These facts alone are dispositive.1 Per the Final Opinion, the PUC’s Motion to Dismiss, and 1 The City’s Response also contains several false allegations that are irrelevant to this Motion. For example, the City states (without proof) that “[o]n June 28, 2019, the City filed the property list known as Exhibit 5A when Xcel advised it had no changes to the version filed on October 26, 2018.” But PSCo has explained to both the PUC and the City that the exhibit is still “In Process,” has been changed since it was originally filed, and continues to contain inaccurate information and facilities inside substations that the PUC has not approved for transfer. See Aug. 19, 2019, Public 5 US.124388638.11 Colorado case law, this Court lacks jurisdiction and must dismiss this case. III. ARGUMENT The Court lacks jurisdiction over this condemnation lawsuit that the City commenced before obtaining the necessary approvals from the PUC. I. Issue Preclusion Bars this Lawsuit. A. The Prior Orders. The City argues that the Final Opinion only applies—and PUC jurisdiction over the assets subject to potential transfer only arises—if the City’s utility seeks to serve out-of-city Customers. Resp. at 4. The City then argues that because it dropped earlier plans to serve out-of-City customers, the Final Opinion no longer provides a basis for issue preclusion. Id. As the Final Opinion’s holding (quoted above) emphasizes, PUC authority extends to the facilities “which provide service within the City of Boulder as well as unincorporated Boulder.” Final Opinion at 12. The holding continues: “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.” Id. These rulings are not limited to Boulder’s improper attempt to serve out-of-city customers. The Final Opinion’s reasoning and justification for acknowledging the PUC’s exclusive jurisdiction is based upon the fact that Boulder’s municipalization efforts—even within the City limits—will have impacts on out-of-City customers Service Company of Colorado’s Responses to Commission Decision, etc., Exhibit 1–Status of Required Documentation (Proceeding No. 15A-0589E). A true and correct copy of this Exhibit 1 (highlighting added), is attached hereto as Exhibit 8. On August 30th, the parties filed with the PUC a new version of this Exhibit, but the parties still disagree about whether certain assets should be included. See City of Boulder’s “Notice of Filing of … Corrected List of Assets Outside Substations…” (Proceeding No. 15A-0589E). PSCo disagrees with some of the City’s characterizations in the Notice and will be filing a Response with the Commission. 6 US.124388638.11 and the larger integrated electric system. These impacts arise regardless of whether the City serves out-of-City customers. For example, the Motion cites the following passage of the Final Opinion: 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…. Final Opinion at 9 (emphasis added). Thus, the Court made it clear that the PUC’s role and jurisdiction do not turn upon whether Boulder serves out-of-City customers. This is not the only passage in the Final Opinion making it clear the PUC’s jurisdiction does not end at Boulder’s City limits, as Boulder claims. As another paragraph emphasizes: “The property the City desires to condemn provides service outside of the municipality and the PUC has the authority under the Colorado Constitution … to govern the provision of utilities to extraterritorial customers and state interests. Boulder … 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.” Id. at 11.2 Once again, the lynchpin is whether the facilities the City proposes to take currently help serve customers outside the City or otherwise impact the larger system, not whether Boulder will be serving out-of-City customers with its utility. The City does not address this portion of the Final Opinion. 2 Article XXV of Colorado’s Constitution states that “all power to regulate … [electric utility] facilities … is hereby vested in … [the PUC].” 7 US.124388638.11 While the City argues that “[t]he primary theme running though Judge LaBuda’s decision is that the PUC’s jurisdiction depended on the City’s plan to serve out of city customers,” Response at 14, the Final Opinion assumes the opposite: “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” otherwise. Id. at 9 (emphasis added). In the very next paragraph, the Final Opinion states that the PUC “is best suited to exercise jurisdiction … [to] determin[e] the best method of separation in order to avoid negatively impacting the statewide energy grid.” Id. Ultimately, the Court “AFFIRM[ED] the October 29, 2013 Decision No. C13-1350 and the December 11, 2013 Decision No. C13-1550, both issued by the PUC.” Id. at 12 (emphasis in original). The Court’s affirmation is complete, with no portion of the underlying PUC rulings denied, overruled, or remanded. Like the Final Opinion, those two declaratory rulings3 do not tie PUC jurisdiction to service of county customers; they tie PUC jurisdiction to (1) facilities used to serve out-of-City customers and (2) the integrity of the interconnected statewide system: 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 …. 3 The Motion refers to the two PUC declaratory rulings as the “Declaratory Decision” (Exhibit 3 to the Motion) and the “RRR” (Exhibit 4 to the Motion). See Mot. 4–5. 8 US.124388638.11 Declaratory Decision at ¶ 28. Regulatory oversight of the assets, plant, and facilities used to provide electricity outside Boulder’s territorial boundaries advances important public interests.… 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. RRR ¶ 19. The Response does not discuss these rulings. Instead, the City emphasizes two passages within the Final Opinion to argue that the PUC has no jurisdiction if the City seeks to condemn assets to serve in-City customers: 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. Accordingl y, if Boulder were seeking to create a municipal utility to serve City of Boulder residents only, it could do so without any PUC involvement. * * * 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. Final Opinion at 2, 6 (cited in Resp. at 3–4). However, the City is not merely “seeking to create a municipal utility to serve City of Boulder residents only” nor “operat[ing] a utility solely within its boundaries.” These hypothetical issues were not before either the PUC or the Court. Rather than simply building and operating a utility from the ground up, the City is proposing to divide an existing integrated system and take for itself assets that PSCo currently relies upon to provide service to customers that it will continue to serve after separation. See id. at 9 (“[T]he power system is intertwined with the system that provides service to extraterritorial customers and the statewide 9 US.124388638.11 energy grid.”). For all the reasons cited above, that activity—breaking the current system into two in a way that will impact out-of-city customers and the larger grid—triggers the jurisdiction of the PUC, which must “determine how facilities should be assigned, divided, or jointly used to protect the system’s effectiveness, reliability, and safety … prior to the City’s condemnation of property for utility municipalization.” Id. at 12. B. The issue this Court faces is the same as that addressed by Judge LaBuda. Issue preclusion applies where a party demonstrates: “(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). The City only challe nges the first of these four elements. Resp. at 4, 15 (question “is whether the issues presented are identical.”). The relevant “issue” here is “whether the City can commence a condemnation action before completing PUC proceedings.” Mot. at 12. The PUC and the Court both held multiple times that the City cannot. See, e.g., Final Opinion at 12. These decisions have long been final and cannot be challenged in this condemnation action. The fact that the City no longer seeks to serve customers outside of the City does not undermine the Final Opinion or the PUC’s jurisdiction, nor does it have any relevance to whether the first prong of the issue preclusion analysis has been satisfied. The Court issued the Final Opinion and dismissed the City’s earlier condemnation action because the City had not conducted 10 US.124388638.11 the necessary PUC proceedings, not because the City sought to serve out-of-City customers. Final Opinion at 12 (ordering that the PUC’s “determination must be made prior to the City’s condemnation of property for utility municipalization”); Dismissal Order at 1 (“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.”). The issue here—whether the City can commence a condemnation action before completing the requisite PUC proceedings—is identical to the issue decided by the Court in both the Final Opinion and Dismissal Order and has already been decided against Boulder. The City’s argument that it has unilaterally satisfied the three conditions set forth in the Third Application Order for the potential transfer of certain assets outside of substations is undermined by the fact that the Parties are currently litigating whether those conditions have been satisfied and other issues at the PUC as the City admits. E.g., Resp. 2 n. 3 (“On August 21, 2019, the PUC held a status conference during which the Commissioners expressed their intent to expedite completion of the PUC Proceedings. The PUC will discuss outstanding issues on August 28, 2019 too.”);4 17 (alleging “[t]here is no prejudice to the Commission, if the Court proceeds in parallel with the Commission”); 18 (describing “the ongoing proceedings before the PUC”). Moreover, the Response (1) does not dispute that the PUC has not approved the agreements 4 Following the Commission’s August 28 deliberations, it issued an Interim Decision establishing a new deadline for Boulder to submit final versions of the agreements and correct asset list required by Decision No. C17-0750 to address the three conditions to transfer of certain assets outside substations; providing a ten-day period for parties to review and respond to the filing and accepting PSCo’s pending Petition for Declaratory Orders as to assets inside substations. See Decision C19- 0716-I. Thus, the PUC proceedings are clearly not yet complete. 11 US.124388638.11 submitted by the parties, including the Cost Agreement5 which, by its express terms cannot go into effect unless approved without modification; (2) does not dispute that the Third Application Order denied the potential transfer of assets within substations6; and (3) fails to acknowledge that the PUC has moved to intervene and dismiss this condemnation action because proceedings at the PUC are ongoing. Between PSCo, the PUC, and now IBM, only Boulder insists that it can proceed here. The PUC must complete its job of ensuring a safe and reliable separation of the two systems before this Court can assert jurisdiction, requiring dismissal. Cf. Third Application Order at 88–90 (specifying additional PUC approval of assets for possible transfer required). Whether or not the Commission may be getting close to making these necessary final decisions is irrelevant ; unless and until they are actually made, Boulder cannot file a condemnation action. C. The City cannot seek reconsideration of the Final Opinion in this case. On numerous occasions, the City’s Response raises arguments that were previously rejected in the Final Opinion, which the City did not appeal. This Court should not entertain these arguments, especially since it sits as a limited-jurisdiction condemnation Court. See Tegeler v. Schneider, 114 P. 288, 289 (Colo. 1911); see also Silver Eagle Servs. v. Pub. Utils. Comm’n, 768 P.2d 208, 209 (Colo. 1989) (PUC decision reviewable only under § 40–6–115). For example, the City’s brief leads with the argument that it has the “constitutional right to file a petition for eminent domain,” without regard to the PUC’s authority. Resp. 12–13. This was one of the main arguments pressed by the City in the litigation that led to the Final Opinion. See 5 The City’s Amended Petition repeatedly relies upon the Cost Agreement to limit the scope of the condemnation and the City’s just compensation obligations. Am. Pet ¶¶ 38, 43, 85–86. 6 See Third Application Order ¶ 6 (“We find that it is premature to designate any facilities inside the substations for potential transfer to Boulder from Public Service.”). 12 US.124388638.11 Final Opinion at 8 (“The City also maintains the PUC rulings ‘interfere with the City’s constitutional authority to acquire the electric system serving the City.’”). The Final Opinion squarely rejected it: “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.” Id. at 7. The City did not seek Supreme Court review of this determination. Similarly, the City argues that it should not have to complete the PUC proceedings because doing so risks abrogating its constitutional right to eminent domain. Resp. at 16. This again rehashes arguments already pressed and rejected in the Final Opinion litigation. Compare Final Opinion at 8 (“Boulder repeatedly characterize[d] the PUC action as abrogating its constitutional right to eminent domain.” (emphasis in original)), with id. (“The PUC action only delays Boulder’s constitutional right to eminent domain … to provide PUC its constitutional right to investigate and determine how the facilities should be assigned, divided, or jointly used….” (emphasis in original)).7 Boulder cannot use this Court to revisit arguments it has already lost. II. The City’s Own Conduct Belies Its Current Argument. The City’s claim that it was free to move forward with condemnation as soon as it 7 The City spends considerable time discussing the length of the PUC Proceedings, yet does not dispute that its proposed separation represents a monumental undertaking. The City acknowledges, as it must, that “a delay, in and of itself, does not abrogate …[the] constitutional right of eminent domain,” Resp. at 16, and that material issues remain pending at the PUC concerning the scope of the proposed condemnation and the very property at issue. See Resp. at 17–18 (asserting that factual questions remain in the PUC Proceedings regarding “the status of the separation, the nature of the separation, [and] the plan for substations”). Finally, the City’s Response fails to acknowledge its own responsibility for the length of the PUC Proceedings. But it is not necessary or appropriate for this Court to consider or rule upon any of these issues or to second-guess the PUC’s management of its docket in the complicated proceedings before it. Ultimately, the City’s timing complaints are irrelevant to the question of whether this Court can assert subject matter jurisdiction before the PUC proceedings are complete. 13 US.124388638.11 abandoned its attempt to acquire county customers is not only legally wrong, it is also belied by its own conduct. According to the City, “Judge LaBuda concluded that the Commission had jurisdiction only because the City was planning to serve customers outside of the City.” Resp. at 4 (emphasis added). Under this theory, the PUC divested itself of jurisdiction as early as December 30, 2015, when it “dismiss[ed] the portion of the City of Boulder’s (Boulder’s) Verified Application (Application) requesting acquisition of facilities used exclusively to serve Public Service customers outside of the Boulder city limits.” Dec. 30, 2015, Interim Decision, etc. at 15, ¶ 2; see also Sept. 28, 2016, Second Supplemental Verified Application (Proceeding No. 15A- 0589E) (“Boulder is not seeking to serve any customers located outside Boulder’s jurisdictional boundaries (the ‘City Limits’) in unincorporated Boulder County.”). However, the City continues to this day to participate in the PUC Proceedings and has done so despite claiming that such proceedings threaten to abrogate its constitutional power to condemn. If the City truly believed that the PUC’s jurisdiction depended upon serving out-of-City customers, then it would have taken steps long ago to terminate the PUC Proceedings. III. Undisputed Colorado Supreme Court Authority Mandates Dismissal. Even if issue preclusion were not dispositive, binding Supreme Court authority requires dismissal. Courts recognize that the PUC has considerable expertise concerning utilities within the state and thus disfavor judicial action undermining the PUC’s authority. 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). The Colorado Supreme Court has explained, in no uncertain terms, that when the PUC has jurisdiction over the property at issue, a condemnation court lacks jurisdiction to proceed. Colorado & S. Ry. Co. v. Dist. Ct. in and for Tenth Jud. Dist., 493 P.2d 14 US.124388638.11 657, 659 (Colo. 1972) (“Southern Railway”). Boulder fails to address this alternative basis for dismissing the lawsuit. It does not even discuss Southern Railway, let alone try to distinguish it. Accordingly, and for the reasons set forth in the Motion at pp. 14–18, the Court should dismiss this lawsuit for this additional reason. IV. Dismissal Is Required; not Unprecedented or Extraordinary. The City argues that the PUC’s exercise of jurisdiction is unprecedented, see, e.g., Resp. at ¶¶ 7, 8, that dismissal would be extraordinary, id. at 2, and thus the Court should instead proceed on a parallel path with the PUC. Id. at 17. These arguments lack both factual and legal support. First, this is not the proper forum for the City to challenge this Court’s or the PUC’s earlier decisions. Second, dismissal would not be unprecedented. Judge LaBuda already dismissed an identical lawsuit for identical reasons. And there are numerous examples of courts dismissing condemnation cases on jurisdictional and other grounds. See, e.g., Southern Railway, 493 P.2d at 659–60. Third, the Civil Rules and binding caselaw mandate that the only action the Court can take when it lacks jurisdiction—a threshold issue, which must be addressed before all others—is to dismiss a lawsuit. In the absence of jurisdiction, the Court can do nothing else. See Mot. at 10 (citing C.R.C.P. 12(h)(3) and numerous cases). Boulder’s reliance on Miller v. Public Service Company of Colorado, 272 P.2d 283 (1954) and Public Service Company of Colorado v. Shaklee, 784 P.2d 314 (Colo. 1989) to claim otherwise ignores the Southern Railway case and Judge LaBuda’s Final Opinion, rejecting this argument in the situation where the property sought to be condemned is public utility assets. Southern Railway at 166–67; Final Opinion at 10–11. Under both opinions, it is the PUC, and not the City, that decides how Public Service’s public utility assets “should be assigned, divided, or jointly used to protect the system’s effectiveness, reliability, 15 US.124388638.11 and safety.” Final Opinion at 12. Until the PUC makes its final decisions, this Court has no jurisdiction to conduct any “concurrent” proceedings. V. There is no need for a hearing on the Motion to Dismiss. The City requests a hearing but has not identified any factual disputes relevant to this Motion (see Factual Clarification section supra at 3-4). Instead, the “wide range of factual questions” the City identifies — such as “the status of the separation, the nature of the separation, the plan for substations and the ongoing proceedings before the PUC”—Resp. at 17–18, are issues to be addressed by the PUC. Indeed, this Court cannot conduct condemnation proceedings to determine the amount of just compensation owed where “the nature of the separation … [and] the plan for substations”—the very property to be taken—is unknown. See Southern Railway, 493 P.2d at 659; Final Opinion at 10, 12. Right now only the PUC should be conducting hearings. Because there are no factual disputes relating to the issues to be decided by this Court a hearing is unnecessary. See Rush Creek Solns. Inc. v. Ute Mountain Ute Tribe, 107 P.3d 402, 406 (fact finding on Motion to Dismiss not required when material facts undisputed). The Court should deny Boulder’s hearing request8 and grant the Motion. IV. CONCLUSION Because this Court cannot assert subject matter jurisdiction before the PUC completes its required proceedings, this lawsuit must be dismissed. 8 In both the Final Opinion litigation and the earlier condemnation action, the Court denied requests for oral argument and decided the cases on the papers. Sept. 3, 2014, Order (Case No. 14CV30047); Dec. 8, 2014, Order (Case No. 14CV30890). 16 US.124388638.11 DATED this 3rd day of September, 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 17 US.124388638.11 CERTIFICATE OF SERVICE The undersigned certifies that on September 3, 2019, a copy of the foregoing REPLY IN SUPPORT OF 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 8 TO REPLY IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED PETITION IN CONDEMNATION FOR LACK OF SUBJECT MATTER JURISDICTION PURSUANT TO COLO. R. CIV. P. 12(b)(1) EXHIBIT 1 – Status of Required Documentation 4603285.1 Assets Outside of Substations Documentation the Commission needs to review and approve Status Notes Agreement for Payment of Costs Ready for Intervenor and Commission review While this document is ready for review with respect to the payment of costs relating to assets outside substations, an amendment may be proposed at a later time with respect to payment of costs relating to assets inside substations. Interim Cost Agreement Ready for Intervenor and Commission review Agreement Concerning Permanent, Non- Exclusive Easements and Other Necessary Real Property Rights Ready for Intervenor and Commission review Exhibit 5A – Facilities List In Process Public Service needs an executable version of Exhibit 5A and has requested such from the City. The data on many pages of the exhibit is so small that the exhibit is unreadable in PDF. Public Service has asked the city to reformat the spreadsheets for those pages so that the data is readable. Public Service disagrees that the Exhibit 5A filed by the City on June 28, 2019, is correct. The Note Boulder added on June 28, 2019, in the header on pages 1 and 2 to the exhibit is inaccurate; changes were made to the exhibit which were not previously disclosed and which are not correct (such as customer data for gas only customers being included in the Highly Confidential Lot Centroid Location section); and two exit feeders from Substation F that interconnect with the IBM-owned distribution system are still in Exhibit 5A even though the City does not currently have Commission authorization to acquire any facilities that serve IBM. Exhibit 5B – Real Property Rights List In Process Public Service has resolved the open items on Exhibit 5B, for example proofreading Part Five from the extensive The Exhibit 5B, made up of Parts One through Five, Boulder filed by Notice on August 2, 2019, was sent to Boulder for review, not for filing. There were open items in several parts and the revised exhibit needs some explanation given the significant changes in both content and form since the exhibit was originally Colorado PUC E-Filings System EXHIBIT 1 – Status of Required Documentation supporting documents and making some resulting changes. The finalized Revised Exhibit 5B is ready to send to Boulder for review with information on changes made. Public Service is drafting an explanation of the five parts of Exhibit 5B for filing when the final exhibit is filed. filed on October 26, 2019. Therefore, Public Service does not agree that the Exhibit 5B filed by the City on August 2, 2019, is final. Public Service has not received any comments from the City since the first drafts were sent to the City in June, however, we note that the real property exhibits the City filed with the condemnation case are different in significant respects from the revised Ex 5B. The Company does know if this is because the City believes 5B is not accurate and complete or if there is some other reason for that. Easement Sharing Agreement Ready for Intervenor and Commission review The Agreement was written in the context of the Exhibit 5B in existence at the time. A potential Amendment of the Agreement, reflecting the revised Exhibit 5B, needs to be discussed with Boulder. However Public Services does not believe such an Amendment would be material to Intervenor or Commission consideration of the substantive safety and reliability terms of the Agreement Assets Inside Substations Documentation the Commission needs to review and approve Status Notes Application for the designation of assets inside substations for transfer To be drafted upon final agreement being reached on issues within substations as between the City and Public Service Source of material disagreement and subject of Public Service’s Petition for Declaratory Orders. Boulder does not believe the Commission must designate substation assets for transfer prior to commencement of a condemnation action for such assets. Public Service, IBM and Tri-State believe Commission transfer approval is required and is a EXHIBIT 1 – Status of Required Documentation pre-condition to condemnation of assets inside substations The last time the Commission reviewed substation proposals it found “compelling” evidence existed to deny Boulder’s request for transfer approval for assets inside substations. The Commission needs to be satisfied that any substation proposals ultimately agreed-to by the City and the Company, will result in safe, effective and reliable service. Substation “List of Assets” – Both a Facilities List and a Real Property Rights List In Process While Boulder filed a list earlier this summer, that list is not complete and accurate. The final version of the List is dependent upon certain terms being negotiated in the Co-Location Agreements (discussed below) such as ownership of substations and easement rights. The substation list of assets is also where substation exit feeders should be listed (for those existing substations in which Boulder is ultimately authorized to acquire facilities) Co-Location Agreement with respect to Substations B and D, a new Boulder substation adjacent to Substation A, a new Boulder substation inside an addition to Substation C, and a new Boulder substation at its wastewater treatment plant site. In Process The Commission’s decision with respect to its role in reviewing and approving substation proposals will have a material effect on the negotiations that are underway. See the Table filed as Exhibit 2 for more information about the purpose and scope of this agreement. Co-Location Agreement with respect to Substations F Negotiations yet to commence Public Service believes efficiencies will be gained in negotiating this agreement after certain issues are resolved in the other Co-Location Agreement. However, there are unique issues associated with co-location with Substation F that need to be addressed which is why a separate Co-Location Agreement is required. The Company believes Tri-State and IBM should be parties to this agreement. Boulder has objected to IBM being part of this agreement which is a source of EXHIBIT 1 – Status of Required Documentation material disagreement. Tri-State’s work on a Facilities Study, currently underway, may affect its thinking on this Agreement Amendment to Agreement for Payment of Costs to incorporate substation elements Negotiations yet to commence Public Service provided a draft substation Agreement for Payment of Costs on January 31, 2019. The draft addressed all time periods (pre Go/No Go and post Go/No Go1 all the way up to Cut Over). Boulder strongly objected to addressing anything other than Facilities Studies and Detailed Design Drawings and therefore PSCo switched over to negotiating an agreement just on those topics. An agreement was executed and reached that covers just these costs which are the Pre Go/No Go time period costs. An Agreement for Payment of Substation-related Costs for the post Go/No Go time period, perhaps in the form of an Amendment to the Agreement for Payment of Costs for assets outside substations, will be needed. The City prepared an initial proposed draft amendment. The draft amendment was filed as Exhibit 9 to the City’s Notice of Proposed Process filed on June 12, 2019. Negotiations regarding this draft have not commenced. The Company has had to prioritize the work and told Boulder it would work first on the more complex and longer time frame items - Exhibit 5B and substation co-location agreements. 1 As defined in the Agreement for Payment of Costs for assets outside substations, (i) the Go/No Go Decision is 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, and (ii) the “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.