The city of Boulder announcedFeb. 16that a tentative settlement has been reached in its lawsuit challenging the Colorado Public Utilities Commission's (CoPUC) action to award 100 percent of the renewable energy credits (RECs) from Boulder's hydroelectric projects to Xcel Energy, operating as Public Service Company (PSCo).

Under the settlement, Boulder and PSCo would split the RECs equally through 2017, the remaining term of Boulder's hydropower contract with PSCo. Through 2017, the city's hydroelectric facilities are anticipated to generate close to 450,000 mega-watt hours of renewable electricity, so Boulder will retain the credits for 225,000 mega-watt hours. Boulder's hydroelectric facilities, most of which were built in the 1980s, qualify as renewable resources under Amendment 37.

A REC represents one megawatt hour of energy generated from a renewable source such as wind, solar or hydroelectric, and can be used to meet a renewable energy requirement, such as those set in the city's Climate Action Plan (CAP) or in Colorado's Amendment 37.

"This settlement will play a major role in helping Boulder meet its CAP goals," said Boulder Mayor Mark Ruzzin. "It also adds momentum to achieving the voter's goals outlined in Amendment 37 by increasing the chances that Xcel Energy will need to develop more renewable resources."

Passed by Colorado voters in 2004, Amendment 37 was the first voter-initiated law in the United States to establish a renewable energy requirement for utilities. It requires large, investor-owned public utilities like Xcel Energy to generate a certain portion of their electric energy requirements with power which is generated by wind, solar, small hydroelectric and similar facilities. The utility can also fulfill its requirements by acquiring the RECs. Under Amendment 37, RECs may be bought, sold and traded.

The city brought the lawsuit in 2006 when the CoPUC awarded all of the renewable energy credits created by Amendment 37 from Boulder's energy facilities to PSCo. Boulder sells power from its hydroelectric facilities to PSCo. At the time that Boulder entered into contracts with PSCo, RECs had not yet been created.

"Having control over the renewable energy credits will free CAP tax dollars that would have been required to make up the loss of the RECs and allows us to implement that many more initiatives in supporting our climate action goals," said City Manger Frank Bruno. "A pre-trial settlement made sense given the costs and risks of litigation, as well as the basic fairness of a 50-50 split."

The lawsuit had been filed in Boulder District Court. The settlement will be final upon approval by the Boulder City Council and the CoPUC.