[bouldercouncilhotline] Hotline: Re: CML Policy Committee Approves Protecting Local Govt Authority to Create Municipally Owned Utilities

[cmosupport at bouldercolorado.gov]

Sender: Cowles, Macon

My congratulations to Zan and Matt and the others that worked on this important policy issue at CML.









Macon Cowles
Boulder City Council Member





PO Box 4623








Boulder, Colorado 80306
CowlesM at bouldercolorado.gov
Cell (303) 638-6884








On May 10, 2013, at 2:58 PM, "Jones, Suzanne" <JonesS at bouldercolorado.gov> wrote:



Good news from the Colorado Municipal League!



This morning, Boulder's CML representatives (me and Matt), armed with a great memo by Carl Castillo (see below) and back-up staffing from Jonathan Koehn, successfully convinced the CML Policy Committee to adopt Boulder's
 suggested amendments to CML policy to protect local governments' authority to create municipally owned utilities and serve utility customers. Colorado municipalities currently have both of these powers, but we wanted CML policy to explicitly state that it
 would oppose any state or federal efforts to restrict those powers.  


We had a good discussion with the Policy Committee in which statutory cities wanted to be sure their powers were protected as well, and in which some representatives suggest that CML be more pro-active and even consider
 improving upon these existing powers. The fact that other municipalities serve outside their city limits was an argument that resonated (e.g., Estes Park city limits are 4 square miles, but their electric utility serves a 400 square mile area).


The vote was unanimous--which was a pleasant surprise and refreshing to say the least! These amendments will now go to the full CML membership for
 approval in June.


Cheers,
Suzanne


  
  
  
  
  
  
 
     


Colorado home rule cities have the authority to create municipally owned utilities and to serve customers outside of their jurisdictional boundaries. According to the Colorado Constitution,

[A Home Rule city] 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. (Colorado Const. Art. XX, § 1, emphasis added)
Several Colorado municipalities have either used, contemplated using, or would like to retain the ability to use this authority. Recognizing that some investor-owned utilities may be threatened by the use of this authority, and in anticipation
 of potential legislative threats to diminish its use, the City of Boulder proposes adding the following language (in bold text) to the CML Policy Statement’s
Electric and Natural Gas Services Section:
<p class="MsoNormal" style="margin-top:0in;margin-right:.5in;margin-bottom:10.0pt;
margin-left:.5in">
The League . . .

Opposes federal or state restrictions that would limit local jurisdictions’ legal ability to create new municipally owned utilities.
   
Opposes efforts to prevent municipalities from extending utility services to newly annexed areas, or providing utility services to customers in unincorporated county properties adjacent to the municipality.
The proposed language is entirely consistent with CML’s existing policy statement, with principles of local control, and with existing Colorado regulations regarding the creation of municipally owned utilities.
 It declares CML opposition to legislative efforts to diminish this existing municipal authority.
Municipal boundaries are not necessarily the optimal place from an engineering standpoint to separate a new municipal utility from an investor-owned utility. Loveland ran into this issue when it became a municipal
 utility in 1926 and acquired property from the investor-owned utility. The Supreme Court upheld the right of Loveland (while it was still a statutory city) to condemn and operate facilities outside the city boundaries. Separating precisely at city boundaries
 usually requires significantly more interconnectors which decreases reliability, increases separation costs, and increases operation and maintenance costs for the lifetime of the utility.
It is important to note that when a municipality decides to create its own utilities and to separate from an investor-owned utility, any customers of the municipal utility that are outside the boundaries of the
 municipality are protected by the PUC (C.R.S. 40-3.5-102) from the municipal utility charging higher rates outside the municipality.