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Court affirms Delta's right to compete with DMEA

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The Colorado Court of Appeals has upheld a district court decision, affirming the City of Delta's right to provide electrical services in territory previously served by Delta-Montrose Electric Association.

The issue arose in September 2012, when Maverik contacted DMEA about plans to build a convenience store at the corner of Highway 50 and Highway 92. A service station and convenience store had previously been located on that site, with electrical service provided by DMEA, although the 21-acre parcel had been annexed into the city in 2006.

Maverik paid a $150 deposit to DMEA, but a short time later notified DMEA that it had decided to obtain service from the city instead.

According to court documents, DMEA filed action seeking damages and declaratory relief. DMEA claims, in part, that it is owed compensation under state statute.

The city filed a motion to dismiss DMEA's claims, asserting that a municipality operating its own electric utility has a right to compete with a cooperative for service to customers in annexed territories. The district court agreed, and DMEA appealed.

The appeals court cited case law which makes it clear that a municipality may compete with a public utility for "new" customers without having to compensate the utility.

DMEA responded with the following comment, emailed to the DCI Tuesday morning:

"DMEA respectfully disagrees with and is disappointed by the recent Colorado Court of Appeals decision in DMEA v. City of Delta. We are working with our attorneys at Holland & Hart to assess our options and next steps. We believe that longstanding Colorado law requires compensation to electric cooperatives like DMEA in precisely situations such as what exists with the City of Delta."

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