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City Offers Xcel Energy Nearly $94 Million for Assets Necessary for Local Electric Utility

Offer is double Xcel’s original cost less depreciation

The City of Boulder offered to purchase certain portions of Xcel Energy electric infrastructure for $93.96 million in a Nov. 20 letter to the Minneapolis-based utility.

The city’s offer comes after an Oct. 28 Colorado Public Utilities Commission ruling that approved transfer of Xcel Energy assets outside substations to the city.

The appraised value of the assets outside substations is $62.3 million. The basis for the city’s offer is the value Xcel reports for financial filings; the offer is double the original cost of the assets, less depreciation.

“We’ve made an offer that we hope Xcel will seriously consider,” said City Attorney Tom Carr.

The offer is the first step in the city’s acquisition process that will result in a key variable: the cost to purchase some of the electric system from Xcel Energy. The city anticipates that the acquisition process, which may involve a condemnation proceeding, will continue through next year.

If Xcel accepts the offer or makes a counter-offer, the city and Xcel will enter into negotiations setting the terms of agreement.

If Xcel does not accept the city’s offer, the city will proceed to re-file condemnation in District Court before the end of the year. The city expects that the District Court will hold a valuation trial in nine to15 months to determine this cost. The city will not take ownership of the assets or pay the cost determined by the court unless:

  • Voters approve moving forward with the creation of the utility after the condemnation amount and other key project variables are publicized; and
  • Construction of Boulder’s separate electric system is complete.

Acquisition Background

In December 2018, City Council authorized the city to move forward with the acquisition process, including authorization to condemn Xcel’s assets if the parties did not reach agreement.

Earlier this year, the city originally offered $68.5 million based on the appraisal including assets inside substations. In June, the city increased its final offer to $82 million. Xcel did not respond to the city’s offers.

Prior 2019 Condemnation Petition

In June, the city filed a petition in District Court to condemn Xcel Energy assets. This case was dismissed by the District Court in September. The District Court granted Xcel’s motion to dismiss, citing that the PUC process was incomplete. The PUC issued a final ruling Oct. 28.

Appeal of District Court’s Dismissal

In October, the city filed a notice of appeal of the condemnation dismissal. If the city files another condemnation petition at District Court, this appeal will continue in parallel to the condemnation petition.

Litigation to recover attorney’s fees

In October, Xcel filed a motion in district court seeking repayment of approximately $210,000 in attorney’s fees incurred in filing their Aug. 5 motion to dismiss the city’s condemnation case. Under the law, Xcel is entitled to recover only the reasonable amount of attorney’s fees for filing the Motion to Dismiss. Xcel is not entitled to reimbursement for fees incurred in filing other documents or working with other parties to the case. The city responded to this motion Nov. 20.

About Local Power

Local Power is the city's effort to bring clean, local, affordable and reliable electricity to the community by developing a community-owned local electric utility. The project is a key component of the city's Energy Future strategy, as well as the city's Climate Commitment. The city seeks to build an energy future that is clean, local, reliable, secure and provides value.

For the latest Local Power news, including information on litigation, visit www.BoulderColorado.gov/Local-Power/latest

Published: Nov. 22, 2019  

Media Contacts: 

Emily Sandoval, Local Power, 303-441-1927