BEFORE THE PUBLIC UTILITIES COMMISSION

OF THE STATE OF COLORADO

* * * * *

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

)

)

)

)

)

)

)

)

PROCEEDING NO. 15A-0589E

THE CITY OF BOULDER’S REPLY TO STAFF’S RESPONSE IN SUPPORT OF

PUBLIC SERVICE COMPANY OF COLORADO’S MOTION TO DISMISS

September 10, 2015

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TABLE OF CONTENTS

I. EXECUTIVE SUMMARY ................................................................................................... 1

II. ARGUMENT ....................................................................................................................... 5

A. THE DETERMINATIONS OF LAW SOUGHT BY STAFF ARE

CONTRARY TO COLORADO LAW AND TO THE COMMISSION’S

DECISIONS. ...................................................................................................... 5

1. The City’s Proposed Joint Use of Facilities Through Its Distribution Wheeling

Arrangement Is Consistent with the Commission’s Decisions, Honors the

Doctrine of Regulated Monopoly and Is Commonplace. .................................. 6

2. The City’s Proposed Joint Use of Facilities Through Its Distribution Wheeling

Arrangement Does Not Obstruct PSCo’s Customer Relationships. .................. 8

B. THE COMMISSION CAN AND SHOULD STRIKE A HARMONIOUS

BALANCE BETWEEN THE COMMISSION’S OVERSIGHT OVER

PUBLIC UTILITY SERVICE IN COLORADO AND BOULDER’S

CONSTITUTIONAL HOME RULE AUTHORITY. ..................................... 10

1. The Commission Can Continue to Ensure the Delivery of Safe and Reliable

Service at Just and Reasonable Rates. ............................................................. 10

2. Regardless of Staff’s View of Boulder’s Proposed Distribution Wheeling

Arrangement, the Entire Application Should Not Be Dismissed. ................... 11

C. STAFF’S RESPONSE SHOULD BE CONSTRUED AS A MOTION FOR A

DETERMINATION OF A QUESTION OF LAW AND SHOULD BE

STRICKEN. ..................................................................................................... 12

D. STAFF’S RESPONSE IS DEFICIENT. .......................................................... 13

1. Staff Fails to Identify a Viable Reason for a Determination of Incompleteness.

.......................................................................................................................... 13

2. Staff’s Response Constitutes a de facto Rulemaking. ..................................... 15

3. The Arguments in Trial Staff’s Response More Properly Belong in Motions in

Limine or in Its Answer Testimony ................................................................. 16

III. CONCLUSION ................................................................................................................. 17

1

The City of Boulder, Colorado (“Boulder” or the “City”), pursuant to Rule 1400 of

the Colorado Public Utilities Commission’s (“Commission”) Rules of Practice and

Procedure, hereby submits its Reply to Staff’s Response (“Response”) in Support of Public

Service Company of Colorado’s (“PSCo” or the “Company”) Motion to Dismiss the

Application (“Motion” or “Motion to Dismiss”), filed with the Commission on August 28,

2015. The City respectfully requests that the Motion to Dismiss be denied for all the reasons

provided below and in Boulder’s previously filed Response in Opposition to PSCo’s Motion

to Dismiss.1

I. EXECUTIVE SUMMARY

Both PSCo’s Motion to Dismiss and the additional relief sought for the first time in

Staff’s Response should be denied. Rule 1303(c) was never intended to be used as the basis

for a motion to dismiss. It is an administrative task assigned to Staff. Staff is required to

make a determination of completeness, not of the law or the merits of the case. In fact, Rule

1303(c) states explicitly that a determination of completeness is not a decision on the merits

of the application.

The determinations of questions of law sought by Staff are contrary to Colorado law

and to Commission Decision Nos. C13-1350 and C13-1550 issued in Proceeding No. 13D-

0498E (the “Commission’s Decisions”). Staff’s Response turns on the assumption that the

City’s Application constitutes a plan to serve out of City customers in a manner that would

deprive PSCo of its certificated right to serve and the Commission of its right to regulate. In

fact, the Application provides a detailed plan to serve only customers within the City in a

safe, reliable, and cost-effective manner by sharing out of City distribution resources with

PSCo and proposes two additional proceedings before the Commission. The City’s proposal

1 Boulder incorporates the arguments presented in its Response to PSCo’s Motion to Dismiss, which the City

filed on August 28, 2015, by reference herein.

2

is consistent with the Commission’s Decisions, honors the doctrine of regulated monopoly

and is consistent with common practice in Colorado.

Pursuant to C.R.S. § 40-4-101(1), the Commission has broad authority over the

“practices, equipment, facilities, or service of any public utility…and may fix the same by its

order, rule, or regulation.”2 Further, the joint use statute, C.R.S. § 40-4-105, anticipates the

Commission ordering the joint use of equipment and facilities when utilities are unable to

agree on joint use and/or the terms and conditions of the joint use. These statutes, taken

together, argue against Staff’s position that the Commission has no authority to order PSCo

to share facilities with the City if the Commission determines that joint use is appropriate.

Utilities in Colorado routinely enter into joint use arrangements. They also routinely

enter into contracts for services, such as that contemplated by Boulder’s Application. After

reviewing the evidence presented in this proceeding, the Commission will determine the

appropriate degree of joint use. In future proceedings, the Commission will determine

appropriate distribution wheeling rates and the appropriate terms and conditions by which the

City, acting as PSCo’s agent, will provide various contracted services to PSCo.

In the course of this proceeding, the Commission can and should strike a harmonious

balance between the Commission’s oversight of public utility service in Colorado and

Boulder’s constitutional authority to condemn facilities both inside and outside the City that

are necessary for the safe, reliable and cost-effective operation of a municipal electric

distribution system.

Whether the Commission ultimately approves Boulder’s Application as proposed,

there is no reason to dismiss Boulder’s Application. A substantial portion of the assets

proposed for transfer are used exclusively to serve customers entirely within the City limits.

Further, while the City proposed the plan that it has found to be the safest, most reliable, and

2 C.R.S. § 40-4-101(1).

3

most cost-effective, it recognizes that there are a host of alternative arrangements that may be

offered by intervenors for the Commission’s consideration during the course of the

proceeding. The fact of disagreement on the best, most efficient, cost-effective approach for

transferring PSCo’s assets to Boulder and establishing interconnection points is not reason to

dismiss the Application as incomplete or deficient. It is precisely the reason why a

proceeding on the merits of Boulder’s Application is necessary. Finally, the power supply

issue, included in the Application, can be decided by the Commission independent of the

proposed transfer of assets and interconnection plan. There is simply no basis to dismiss the

Application in its entirety. Rather than prejudge the outcome, the Commission should reject

Staff’s Response, deny PSCo’s Motion, and consider Boulder’s Application on its merits so

as to harmoniously balance the City’s constitutional home rule authority and the

Commission’s oversight over public utility service in Colorado.

Having addressed the substantive issues raised in Staff’s Response, Boulder requests

that Staff’s Response be stricken to the extent that it requests determinations of questions of

law. Staff’s requested determinations of questions of law, which are allowed pursuant to

Colorado Rules of Civil Procedure, Rule 56(h), are properly filed after the last required

pleading and may only be granted if there are no genuine issues of material fact. In seeking

such determinations from the Commission, Staff’s Response is distinguishable from a motion

to dismiss. The Commission should strike those portions of Staff’s Response that go beyond

simply supporting PSCo’s Motion to Dismiss.

Staff, like PSCo, has failed to identify a viable reason for the Commission to

determine the Application is incomplete. Boulder’s Application meets all of the requirements

necessary to be deemed complete under Rule 1303(c), as was discussed in the City’s

Response in Opposition to PSCo’s Motion to Dismiss. The Application seeks Commission

approval of the transfer of assets under Rule 3104, and provides the information required by

4

that rule. The Application is consistent with, and in fact honors the Commission’s Decisions.

The Application presents issues that are within the Commission’s jurisdiction to consider and

allows the Commission to strike a balance between the City’s home rule power3 and the

Commission’s need to protect substantially adequate utility service throughout the state.4

Nothing in the Application interferes with the Commission’s duty or ability to ensure the

provision of safe and reliable service. On the contrary, Boulder presents a proposal for doing

just that.

Staff’s response also constitutes an impermissible de facto rulemaking by offering a

new interpretation of Commission Rule 1303(c) that would permit intervenors to move to

dismiss applications as incomplete. By submitting a response in support of PSCo’s Motion

rather than an independent finding on the completeness of Boulder’s Application, Staff

impermissibly cedes its role as the exclusive advisor to the Commission regarding an

application’s completeness to PSCo and any and all future intervenors in application

proceedings. This would disrupt the Commission’s practice and impermissibly modify the

Commission’s rules outside the context of a rulemaking proceeding.

The great irony here is that while Staff believes that the Commission may dictate the

facilities Boulder may seek to condemn, and how and the extent to which the City may use

PSCo’s facilities notwithstanding the Commission’s limited authority over municipal utilities

and the City’s independent Constitutional authority, Staff apparently also believes the

Commission’s statutory authority to dictate to PSCo what it must do with its facilities is

limited by the doctrine of regulated monopoly. Staff is wrong. The Commission’s clear

statutory authority to determine the just, reasonable, safe, proper, adequate, or sufficient

3 COLO. CONST. ART. XX, §§ 1 and 6; City of Ft. Morgan v. Colo. Pub. Utils. Comm'n, 159 P.3d 87, 95 (Colo.

2007) (The “constitutional and statutory provisions strive to ensure that public utility service is substantially

adequate across Colorado, while not disturbing home rule power any more than necessary to accommodate the

state interest expressed in the constitution and statutes.”). 4 COLO. CONST. ART. V, § 35; COLO. CONST. ART. XXV; §§ 40-5-101, -102, C.R.S.

5

rules, regulations, practices, equipment, facilities, services, or methods to be observed,

furnished, constructed, enforced, or employed by public utilities like PSCo is not constrained

by the doctrine of regulated monopoly. Ultimately, Staff’s arguments lack legal support,

collaterally attacks the Commission’s Decisions, and defies common practice. Staff’s

arguments must be rejected.

II. ARGUMENT

A. THE DETERMINATIONS OF LAW SOUGHT BY STAFF ARE

CONTRARY TO COLORADO LAW AND TO THE COMMISSION’S

DECISIONS.

In its Response, Staff misapprehends and drastically overextends the doctrine of

regulated monopoly and, in so doing, seeks determinations from this Commission that are

contrary to Colorado law and to the Commission’s Decisions. These legal determinations

would materially limit the Commission’s statutory authority over the facilities and services of

public utilities and are contrary to both C.R.S. § 40-4-101(1) and § 40-4-105. If anything, the

requests underscore the importance of a robust evidentiary record in this proceeding, and

argue against dismissing the Application.

At its heart, Staff’s Response requests that this Commission adopt, as a matter of law,

Staff’s unsupported interpretation of what it means to provide service. As Staff sees it, any

intrusion whatsoever into the ownership or operation of facilities used in providing service to

customers is impermissible. Staff’s approach allows no room for the joint use of facilities,

the contracting of services, or even a home rule city’s ability to exercise its constitutional

rights. Indeed, this approach ignores the law, the Commission’s Decisions, common practice

in Colorado (including PSCo’s), and even offends the foundational underpinnings of the

doctrine of regulated monopoly.

6

1. The City’s Proposed Joint Use of Facilities Through Its Distribution

Wheeling Arrangement Is Consistent with the Commission’s

Decisions, Honors the Doctrine of Regulated Monopoly and Is

Commonplace.

The Commission has the authority to determine the just, reasonable, safe, proper,

adequate, or sufficient rules, regulations, practices, equipment, facilities, services, or methods

to be observed, furnished, constructed, enforced, or employed and to fix the same by order,

rule or regulation.5 Further, the Commission has the authority to order that one utility may

use the equipment and facilities of another utility, especially if the public utilities are unable

to agree on the terms and conditions of such use.6 The statute governing joint use, C.R.S. §

40-4-105 reads in pertinent part:

(1) Whenever the commission, after a hearing upon its own

motion or upon complaint of a public utility affected, finds that

the public convenience and necessity require the use by one

public utility of the conduits…wires, poles… other equipment,

or any part thereof on, over, or under any street or highway that

belongs to another public utility…and that such use will not

result in irreparable injury to the owners or other users of such

conduits…wires, poles… or other equipment…or in any

substantial detriment to the service, and that such public

utilities have failed to agree upon such use or the terms and

conditions or compensation for the same, the commission by

order may direct that such use be permitted and prescribed

reasonable compensation and reasonable terms and conditions

for the joint use.

The statute grants the Commission authority to order PSCo to share facilities with the

City of Boulder if the Commission were to determine that such an arrangement was just and

reasonable. When taken together, C.R.S. §§ 40-4-101(1) and 40-4-105 argue against Staff’s

position that the Commission has no authority to order PSCo to share facilities with the City

if the Commission determines that joint use is appropriate. The Commission should not

restrict its own authority in this case or going forward in the manner suggested by Staff.

Furthermore, Staff’s assessment entirely ignores that the Commission’s Decisions

5 C.R.S. § 40-4-101(1).

6 C.R.S. § 40-4-105(1).

7

specify the need for the Commission “to investigate and determine how the facilities should

be assigned, divided, or jointly used to protect the system’s effectiveness, reliability, and

safety[.]”7 That is, the Commission specifically contemplated the City’s acquisition or joint

use of PSCo’s facilities outside of the city. Staff’s proposal would strip the Commission of

the authority to do exactly what it said it would do in its prior rulings.

Utilities in Colorado, including PSCo, routinely enter into joint use arrangements.

Colorado utilities also routinely contract with third parties to provide generation,

transmission, and distribution services, such as vegetation management and the installation of

distribution lines. This is arguably why the Commission’s Decisions specifically

contemplate a joint use arrangement between the City and PSCo. To assert that joint use is

categorically prohibited is not only contrary to Colorado statutory law, but could also be

interpreted as an improper collateral attack on the Commission’s Decisions.

The Application, like the Commission’s Decisions, fully honors the doctrine of

regulated monopoly, as well as its foundational roots of avoiding the unnecessary duplication

of facilities. Those decisions focused on the City’s plan, at that time, to acquire the

certificate of public convenience and necessity to serve customers outside its jurisdictional

boundaries. The City is no longer seeking to acquire the CPCN to serve customers outside

the City nor does it propose having a service relationship with retail customers outside the

City. Staff, too, recognizes that from the interests of efficiency and cost, “[a]voiding the

needless duplication of utility facilities is generally understood to be one of the reasons

behind the doctrine of regulated monopoly.”8

Indeed, the City’s proposed distribution wheeling arrangement presents Boulder’s

7 Decision No. C13-1350 at ¶ 28 (emphasis added); see also, Decision No. C13-1550 at ¶ 19, which provides,

“Performance of the Commission’s duty to ensure the ability 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.”

(Emphasis added). 8 Staff’s Response, pp. 6-7.

8

proposal for an efficient and logical use of the distribution facilities and interconnection,

designed to comply with the Commission’s Decisions and to enable PSCo’s continued

provision of retail service to PSCo’s customers in PSCo’s service territory.

In this proceeding, one of many questions before the Commission will be the

appropriate degree of joint use. The Commission should deem the Application complete,

permit the parties to develop a robust evidentiary record, and apply the facts of the case to the

prevailing legal standard to reach a determination on the merits of Boulder’s Application.

2. The City’s Proposed Joint Use of Facilities Through Its Distribution

Wheeling Arrangement Does Not Obstruct PSCo’s Customer

Relationships.

Boulder’s proposed distribution wheeling arrangement was designed in large measure

to enable PSCo’s continued ability to serve its retail customers within its service territory. If

Boulder’s Application is approved by the Commission, Boulder will strive to work with

PSCo to develop a transition plan that permits Boulder Light & Power to begin operations in

a manner that is seamless and transparent to customers. In the course of developing the

transition plan, Boulder would anticipate developing a contract with PSCo by which it would

provide certain services to PSCo. Those services would include regular maintenance and

repair of the facilities owned by Boulder over which PSCo would wheel power to its retail

customers. Contrary to Staff’s assertions,9 the City’s ownership of limited distribution assets

outside the City and contractual arrangement with PSCo to provide certain aspects of

operating and maintaining the distribution assets does not constitution serving PSCo’s retail

customers.

Staff’s position, that this contractual relationship somehow obstructs PSCo’s

customer relationships, is wrongheaded. It relies on the assumption that because Boulder will

be responsible pursuant to a Commission-approved and fully regulated contract or tariff for

9 Staff’s Response, p. 5.

9

facilities maintenance, vegetation management, outage restoration and the like, PSCo will

lack control whatsoever on what Boulder does or does not do in carrying out its

responsibilities. PSCo entering into a Commission-approved and fully regulated contract

with the City for these services does nothing to deny PSCo its rights. Consider the fact that

PSCo regularly outsources responsibility for these tasks to independent contractors under

contracts that are not Commission-regulated. No one would assert that if PSCo entered into a

contract with a vegetation management company that it wasn’t serving its customers. No one

would assert that if PSCo purchased generation or transmission from a third party that it

wasn’t serving its customers. No one would assert that if PSCo relied on a fringe service

agreement to use another utility’s distribution network in times of outages or emergencies it

wasn’t serving its customers. Under those circumstances, the third party merely acts as

PSCo’s agent. Under the proposed arrangement included in the Application, PSCo will still

be the serving utility, will still supply all electricity, will still send the customer bills, will still

receive payments, will still be directly responsible for the vast majority of the facilities used

that serve that customer, will still make available demand side management programs for

those customers and will still be responsible for managing the third-party contractors,

including the City of Boulder, that PSCo relies upon to ensure that reasonable electric service

is delivered. If the Commission were to adopt Staff’s position on the doctrine of regulated

monopoly as a matter of law, there could no longer be a place for the contracting out of

services.

In this proceeding, one question before the Commission will be the appropriate degree

to which PSCo and Boulder should contract for services. This requires a factual debate.

What cannot be disputed, as a matter of law, is that the mere fact that some portion of the

utility service is proposed to be provided via a third-party contract does not cause a public

utility to no longer “serve” its customer. Further, there can be no dispute of the

10

Commission’s own authority under Colorado law to “determine the just, reasonable, safe,

proper, adequate, or sufficient rules, regulations, practices, equipment, facilities, services, or

methods to be observed, furnished, constructed, enforced, or employed” by public utilities

like PSCo.10

B. THE COMMISSION CAN AND SHOULD STRIKE A HARMONIOUS

BALANCE BETWEEN THE COMMISSION’S OVERSIGHT OVER

PUBLIC UTILITY SERVICE IN COLORADO AND BOULDER’S

CONSTITUTIONAL HOME RULE AUTHORITY.

1. The Commission Can Continue to Ensure the Delivery of Safe and

Reliable Service at Just and Reasonable Rates.

As proposed in Boulder’s Application, the Commission would continue to “exercise

its constitutional duty to ensure safe and reliable service and to safeguard the integrity of the

statewide system.”11

Boulder is specifically seeking this Commission’s directive, through a

ruling on the City’s prayer for relief, regarding the best approach to ensuring a safe, reliable,

efficient, and cost-effective means for transferring assets, providing for interconnection, and

enabling the City and PSCo to serve their respective customers. The City’s request and

proposal falls squarely within the Commission’s jurisdiction and exercise of its regulatory

duties.

Boulder has proposed that it would return to the Commission for its review and

approval of the distribution wheeling rate. The Commission’s decision in that future

proceeding, based on costs necessary to provide distribution wheeling service, would be the

rate Boulder would be permitted to charge PSCo.

Boulder has also proposed that it return to the Commission for its review and

approval of a transition plan to enable a seamless transition of service. The details of the

transition plan, as well as distribution wheeling rate, will only be worked through once the

Commission makes its determination with regard to the assets Boulder has proposed be

10

C.R.S. § 40-4-101(1). 11

Staff’s Response, p. 9.

11

transferred to the City, as well as the manner in which the PSCo system and the Boulder

Light & Power system are interconnected. Boulder appreciates Staff’s concern that the

Commission’s role in determining safe and reliable service and to safeguard the integrity of

the statewide system be maintained. The Application, as well as Boulder’s proposal for

future proceedings before the Commission, does just that.

In addition to its role regulating Colorado’s electric utilities, the Commission has

another role to play in this proceeding: ensuring that Boulder’s constitutional right to

condemn facilities as part of its home rule authority is given due weight. It is incumbent

upon the Commission to strike a balance between these Constitution-based authorizations.12

That balance cannot be struck if the case is dismissed.

2. Regardless of Staff’s View of Boulder’s Proposed Distribution

Wheeling Arrangement, the Entire Application Should Not Be

Dismissed.

Despite Staff’s concern with Boulder’s distribution wheeling proposal, Boulder’s

Application clearly seeks relief that the Commission is authorized to consider and grant.

There is no reason to dismiss the Application in its entirety.

First, a substantial portion of the assets proposed to be transferred13

are used primarily

to serve customers who are within the City limits. Neither PSCo nor Staff has raised any

arguments against the Commission’s proceeding forward to examine whether these assets

may be transferred.

Further, if the Commission correctly concludes that it has the authority to order PSCo

and the City to share facilities, there are a host of alternative arrangements that may be

offered by intervenors for the Commission’s consideration during the course of the

12

City of Ft. Morgan v. Colo. Pub. Utils. Comm'n, 159 P.3d 87, 95 (Colo. 2007) (The “constitutional and

statutory provisions strive to ensure that public utility service is substantially adequate across Colorado, while

not disturbing home rule power any more than necessary to accommodate the state interest expressed in the

constitution and statutes.”). 13

Direct Testimony of Thomas A. Ghidossi, Attachment TAG–8.

12

proceeding. The Commission could evaluate the different feeders, transformers, and

substations and decide that some should be owned by the City with PSCo paying to wheel

power to their customers and some should be owned by PSCo with the City paying to wheel

power. The Commission could determine that additional points of interconnection and

separation should be established or that less sharing of facilities is appropriate. The City

believes that the evidence will show that all of these options are inferior to the City’s

recommended approach, but understands that the Application does not present the

Commission with a binary decision of granting the relief sought in its entirety or rejecting it

in its entirety.

Finally, the City’s requested relief regarding the power supply issue has nothing to do

with the issue of the proposed distribution wheeling arrangement and neither PSCo nor the

Staff raised any arguments in support of dismissing that portion of the Application.

In short, there is simply is no basis to dismiss the Application in its entirety regardless

of how the Commission feels about the proposed distribution wheeling arrangement. Having

responded to the substantive issues raised in Staff’s Response, Boulder will address the

procedural problems with Staff’s Response.

C. STAFF’S RESPONSE SHOULD BE CONSTRUED AS A MOTION FOR A

DETERMINATION OF A QUESTION OF LAW AND SHOULD BE

STRICKEN.

Staff has not simply responded to PSCo’s Motion to Dismiss. Rather, Staff has

requested that the Commission make four determinations of law.14

Determinations of law are

made pursuant to Rule 56(h) of the Colorado Rules of Civil Procedure. Unlike motions for

14

Staff requests that the Commission find as a matter of law: (1) the City’s proposed provision of distribution

wheeling services to PSCo for PSCo to serve PSCo’s customers in PSCo’s service territory, constitutes

Boulder’s proposed provision of electric utility services to customers in unincorporated Boulder County, Staff’s

Response, p. 2;.(2) Boulder’s performance of certain activities over City-owned distribution facilities –

including maintenance, upgrades, and vegetation management – renders the City “a provider of utility services

for [customers in unincorporated Boulder County]…”, Staff’s Response, p. 5; (3) the doctrine of regulated

monopoly applies to a utility’s relationship with its customers, Trial Staff’s Response, pp. 3-6; and (4) Boulder’s

ownership and control over distribution assets used to deliver electricity to PSCo’s customers constitutes the

provision of “service” to these customer under the doctrine of regulated monopoly, Staff’s Response, pp. 4-5.

13

summary judgment, which may be filed after 21 days from the commencement of the action,

motions for determination of a question of law are allowed after the last required pleading

and may only be granted if there are no genuine issues of material fact.15

In seeking such

determinations from the Commission, Staff’s Response is distinguishable from a motion to

dismiss.16

The Commission should strike those portions of Staff’s Response that go beyond

simply supporting PSCo’s Motion to Dismiss.

D. STAFF’S RESPONSE IS DEFICIENT.

Like PSCo’s Motion to Dismiss, Staff’s Response suffers from several defects.

1. Staff Fails to Identify a Viable Reason for a Determination of

Incompleteness.

First, Rule 1303(c) was never intended to be used as the basis for a motion to dismiss.

It is an administrative task assigned to Staff. Staff is required to make a determination of

completeness, not of the law or the merits of the case. In fact, Rule 1303(c) states explicitly

that a determination of completeness is not a decision on the merits of the application.

Second, like PSCo, Staff errs in neglecting to cite any Commission rules that Boulder

has not met or required information that Boulder has not provided. To the contrary, the

City’s Application is complete and fully compliant with the Commission’s rules and

decisions. Rule 1303 sets forth the test for whether an application is complete. Specifically,

to be deemed complete an application “must state the relief requested, identify all applicable

requirements of Commission rule and decision(s), and address each of those respective

requirements.”17

Boulder has fully complied with these requirements. In its Application and

supporting testimony and exhibits, the City provided its prayer for relief, identified pertinent

15

C.R.C.P. Rule 56(h). 16

Boulder maintains that PSCo did not file a proper motion to dismiss pursuant to the requirements of Rule

12(b). PSCo filed its Motion, not pursuant to Rule 12(b) (e.g., failure to state a claim), but instead based on the

Commission rule that dictates the process by which Commission staff determines whether an application is

complete. 17

4 C.C.R. 723-1-1303(b).

14

statutes and rules, including §§ 40-5-101(b) and 40-5-105, C.R.S., and Commission Rule

3104, governing applications for the transfer of assets,18

and addressed those requirements

throughout its filing. Staff does not argue that the City failed to meet the requirements of

Rule 3104 or address each of the respective requirements of Rule 3104. Instead, like PSCo,

Staff distorts the “requirements” of the Commission’s Decisions. There is nothing in the

Commission’s Decisions that creates an additional requirement for completeness based on the

common law doctrine of regulated monopoly. Perhaps more to the point, the Commission’s

Decisions did not provide that certain methods of assigning, dividing or jointly using

facilities were prohibited by the doctrine. To the contrary, the Commission’s Decisions

specifically contemplate the Commission’s “ability to investigate and determine how the

facilities should be assigned, divided, or jointly used to protect the system’s effectiveness,

reliability, and safety[.]”19

That is precisely what the City has proposed. Staff’s argument

overlooks the clear language of the Commission’s Decisions and could be seen as an

impermissible collateral attack on those Decisions.

If the Commission treats Staff’s Response as a Rule 12(b) motion to dismiss, to

prevail, Staff must bear a very heavy burden (i.e., the Commission must accept all assertions

of material facts made by the City as true, and the Commission must deny a motion to

dismiss unless it appears beyond doubt that the Applicant cannot prove facts in support of the

Application that would entitle Applicant to relief).20

Neither Staff nor PSCo address this

standard. For Staff’s part, by framing its concerns about Boulder’s proposal as a

18

4 C.C.R. 723-3-3104. 19

Decision No. C13-1350 at ¶ 28 (emphasis added); see also, Decision No. C13-1550 at ¶ 19, which provides,

“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.” (Emphasis added.) 20

In Re Eady, 04A-007CP, 2004 WL 729310 (Mar. 12, 2004) (para. 12) (Emphasis added) (citations omitted),

citing Dorman v. Petrol Aspen, Inc., 914 P.2d 909, 911 (Colo. 1996).

15

completeness issue, Staff deprives Boulder of the benefit and protections afforded to the City

by the Commission’s rules.21

Because Staff ignores critical language from the Commission’s Decisions, the Staff’s

support for dismissal on the basis of completeness is baseless and should be rejected. The

Commission should deem Boulder’s Application complete and defer consideration on its

substantive merit until parties can develop their positions through discovery and the

Commission has before it the evidentiary record it needs to rule on Boulder’s prayer for

relief.

2. Staff’s Response Constitutes a de facto Rulemaking.

While piggybacking on PSCo’s claim of incompleteness under Commission Rule

1303(c), Staff voluntarily and improperly cedes Staff’s authority as the exclusive advisor to

the Commission of completeness to PSCo and any other party in any future proceeding

before the Commission.

Rule 1303(c)(II) provides in pertinent part:

Commission staff shall evaluate the application and prepare a

recommendation regarding completeness. Not more than ten days after the

filing of an application, Commission staff may send the applicant and its

attorney written notification concerning any specific deficiencies of the

application regarding its completeness[.]22

This is a clearly an administrative task that is to be performed by Staff. There is no evidence

in the rule that any other entity may participate in this threshold determination.23

By supporting PSCo’s challenge of completeness instead of following the process

contemplated by the rules, Staff is, in effect, voluntarily ceding its unique role and authority

21

It should be noted, too, that it is generally plaintiffs that are afforded the protection of these burdens

applicable to motions to dismiss. Indeed, in the Commission’s rules, the procedures for motions to dismiss

follow the procedures for complaints with no mention of being applicable to applications, as well. 22

4 C.C.R. 723-1-1303(c)(II) (Emphasis added). 23

Notably, Staff did not send Boulder written notification of any alleged deficiencies in the Application. While

such notification is permissive, it is notable that Trial Staff has still not stated in its Response the manner in

which the application is deficient, opting rather to file a motion for determination of law before the proceeding

is at issue.

16

to PSCo, and arguably any other party interested in challenging the completeness of any

future application. In addition to eviscerating Staff’s role, this disrupts the Commission’s

practice, and also impermissibly modifies the Commission’s rules outside the context of a

rulemaking proceeding. Creating or changing Commission rules may only take place in the

context of a rulemaking, and de facto rulemakings cannot be shoehorned into an adjudicated

proceeding.24

3. The Arguments in Trial Staff’s Response More Properly Belong in

Motions in Limine or in Its Answer Testimony

By not directly bringing the concerns about any deficiencies in the Application to

Boulder’s attention, Staff’s Response denies Boulder the opportunity to cure or even consider

modifications to the Application that may satisfy Staff’s concerns as is permitted under Rule

1303. If Staff’s concerns are not with the completeness of the application, but rather, with

the substance of the proposal contained within the City’s Application, those concerns would

generally be addressed within the context of a proceeding, rather than by jettisoning the

proceeding altogether before the merits can be vetted.

The process demanded by Staff, dismissal and refiling, would substantially prejudice

the City. The City has made a good faith effort to comply with the Commission’s Decisions

by presenting its best path forward to enable it and PSCo to serve their respective customers

with electric utility services safely, reliably, and cost-effectively. Whether the Application

and the requested prayer for relief carry the day is a question for the Commission at the

conclusion of this proceeding, but neither PSCo nor Staff have presented any compelling

reason for Boulder to be denied its day in court. Boulder’s proposal should be considered on

its merits.

24

Home Builders Ass’n of Metro. Denver v. Public Util. Comm’n, 720 P.2d 552 (Colo. 1986); see also Colo.

Office of Consumer Counsel v. Mountain States Tel. and Tel. Co., 816 P.2d 278 (In general, agency proceedings

that primarily seek to or in effect determine policies or standards of general applicability are deemed rule-

making proceedings.).

17

III. CONCLUSION

Whether or not the Commission ultimately approves Boulder’s Application as

proposed, there is no reason to dismiss the Application. Staff asks the Commission to decide

important legal issues without the benefit of any evidentiary record. Staff’s support of an

intervenor’s right to challenge completeness is unprecedented and, if allowed, would open up

an entire new area of litigation before the commission. Moreover, staff has not identified a

single requirement of Rule 3104 that the City has failed to include in its Application, nor has

it cited to portions of the Commission’s Decisions that require the City to provide additional

information with its application. Boulder’s Application meets all of the requirements

necessary to be deemed complete under Rule 1303(c). The determinations of questions of

law sought by Staff are contrary to Colorado law and the Commission’s Decisions,

collaterally attack the Commission’s Decisions, and defy common practice. The Commission

should deem Boulder’s Application complete and defer consideration on its substantive merit

until parties can develop their positions through discovery and the Commission has before it

the evidentiary record it needs to rule on Boulder’s prayer for relief.

WHEREFORE, for the reasons set forth above, the City of Boulder, Colorado

respectfully requests that the Commission deny PSCo’s Motion to Dismiss and reject Staff’s

Response in support thereof.

Respectfully submitted this 10th day of September 2015.

/s/ Debra S. Kalish Debra S. Kalish #18858

Sr. Assistant City Attorney

Thomas A. Carr # 42170

City Attorney

City of Boulder

Box 791

1777 Broadway

Boulder, CO 80306 - 0791

Telephone: 303-441-3020

kalishd@bouldercolorado.gov

carrt@bouldercolorado.gov

18

Robert M. Pomeroy, #7640

Thorvald A. Nelson, #24715

Michelle Brandt King, #35048

Nikolas S. Stoffel, #44815

Holland & Hart LLP

6380 South Fiddlers Green Circle, Suite 500

Greenwood Village, CO 80111

Telephone: 303-290-1600

rpomeroy@hollandhart.com

tnelson@hollandhart.com

mbking@hollandhart.com

nsstoffel@hollandhart.com

ATTORNEYS FOR THE CITY OF

BOULDER

19

BEFORE THE PUBLIC UTILITIES COMMISSION

OF THE STATE OF COLORADO

DOCKET NO. 15A-0589E

CERTIFICATE OF SERVICE

I hereby certify that on this 10th day of September 2015, the foregoing THE CITY

OF BOULDER’S REPLY TO STAFF’S RESPONSE IN SUPPORT OF PUBLIC

SERVICE COMPANY OF COLORADO’S MOTION TO DISMISS, was electronically

filed at the Colorado Public Utilities Commission through the Commission’s e-filing system,

and thereby to be served electronically and automatically on any persons for whom such

automatic electronic filing is provided by the Commission’s e-filing system in this docket on

this date.

**Matthew S. Larson mlarson@wbklaw.com Boulder Chamber of Commerce

**Adam M. Peters apeters@wbklaw.com Boulder Chamber of Commerce

John Tayer john.tayer@boulderchamber.com Boulder Chamber of Commerce

**Richard Fanyo rfanyo@duffordbrown.com CF&I Steel, L.P. /Evraz

**Mark Valentine mvalentine@duffordbrown.com CF&I Steel, L.P. /Evraz

**Cesilie J. Garles cgarles@duffordbrown.com CF&I Steel, L.P. /Evraz

Thomas A. Carr carrt@bouldercolorado.gov City of Boulder

Debra Kalish kalishd@bouldercolorado.gov City of Boulder

David J. Gehr gehrd@bouldercolorado.gov City of Boulder

Kathleen E. Haddock haddockk@bouldercolorado.gov City of Boulder

Sandra M. Llanes llaness@bouldercolorado.gov City of Boulder

Michelle Brandt King mbking@hollandhart.com City of Boulder

Thorvald A. Nelson tnelson@hollandhart.com City of Boulder

Nikolas S. Stoffel nsstoffel@hollandhart.com City of Boulder

**Richard Fanyo rfanyo@duffordbrown.com Climax Molybdenum Company

**Mark Valentine mvalentine@duffordbrown.com Climax Molybdenum Company

**Cesilie J. Garles cgarles@duffordbrown.com Climax Molybdenum Company

**Nancy Schartz nschartz@duffordbrown.com Climax Molybdenum Company

Todd Lundy todd.lundy@state.co.us CPUC/Commission Counsel

**Anne Botterud anne.botterud@state.co.us CPUC/Trial Staff

**Scott Dunbar scott.dunbar@state.co.us CPUC/Trial Staff

Gene Camp gene.camp@state.co.us CPUC/Trial Staff

Sharon Podein sharon.podein@state.co.us CPUC/Trial Staff

Stephen Brown stephen.brown@state.co.us CPUC/Trial Staff

Paul Caldara paul.caldara@state.co.us CPUC/Advisory Staff

Ron Davis ron.davis@state.co.us CPUC/Advisory Staff

Ellie Friedman ellie.friedman@state.co.us CPUC/Advisory Staff

Jacqueline Thaler jthaler@us.ibm.com IBM

Ann C. McEvily amcevily@us.ibm.com IBM

20

**Ray Gifford rgifford@wbklaw.com IBM/Leave BoCo Out

**Caitlin M. Shields cshields@wbklaw.com IBM/Leave BoCo Out

John M. Dorsey Jdorsey6224@msn.com Leave BoCo Out

**Gregory E. Bunker gregory.bunker@state.co.us OCC

**Thomas Dixon thomas.dixon@state.co.us OCC

**Ron Fernandez ron.fernandez@state.co.us OCC

**Tim Villarosa tim.villarosa@state.co.us OCC

**Cindy Schonhaut cindy.schonhaut@state.co.us OCC

Randolph W. Starr randy@starrwestbrook.com PVREA

William Dudley bill.dudley@xcelenergy.com Public Service

Robin Knittel Robin.Kittel@ xcelenergy.com Public Service

Judy Matlock Judith.Matlock@dgslaw.com Public Service

**Thomas J. Dougherty tdougherty@lrrlaw.com Tri-State.

**Karl F. Kumli, III karlk@dietzedavis.com University of Colorado

**Robyn W. Kube rkube@dietzedavis.com University of Colorado

**Mark D. Detsky mdetsky@dietzedavis.com University of Colorado

Gabriella Stockmayer gstockmayer@dietzedavis.com University of Colorado

/s/ Sarah Bennett

** DENOTES PERSONS ELIGIBLE TO RECEIVE CONFIDENTIAL PROPRIETARY INFORMATION PURSUANT TO THE COMMISSION’S RULES ON

CONFIDENTIALITY, 4 CCR 723-1100-1102