A bid by Xcel Energy to limit Boulder customers' access to renewable energy and energy-efficiency programs has been rejected by the state Public Utilities Commission -- at least for now.

The decision essentially preserves the status quo for Boulder's Xcel customers while the city looks into forming a municipal utility.

In an application filed in February, Xcel had sought to stop Boulder residents from getting up-front payments for smaller solar installations and place a cap on energy-efficiency rebates within the city, based on how much Boulder residents pay in fees toward such programs.

All Xcel customers pay those fees, and any Xcel customer can apply -- but Boulder residents take advantage of the programs at higher rates than other communities in the Denver metro area.

Xcel also wanted permission not to offer the Windsource and solar gardens programs in Boulder.

Xcel argued it needs to protect its non-Boulder ratepayers in the event Boulder withdraws from Xcel and sets up a municipal utility, while city officials said the move amounted to discrimination against Xcel customers in Boulder in the wake of a vote that authorized the city to pursue potential municipalization.

At a pre-hearing conference Wednesday, the commissioners ruled that Xcel's application was premature and denied it.

Xcel Energy spokeswoman Michelle Aguayo said the utility does not consider the decision a setback. Rather, it just moves the discussion about how costs and benefits of renewable energy and energy-efficiency programs are allocated to a future time.

"The reason we brought this application was to protect our non-Boulder customers in case Boulder decides to municipalize," she said. "We'll just continue to watch what Boulder does, and if they take more definitive steps, we'll go back to the PUC."

Boulder officials said they fully expect to have a conversation with Xcel and state regulators about what compensation, if any, is due to the utility company if Boulder decides to set up its own municipal utility.

"I believe that ultimately this is just moving the discussion down the road," Senior Assistant City Attorney Debra Kalish said.

City officials said Thursday that the PUC's decision validated Boulder's position that it's too early to have those discussions and protects Boulder customers while the city continues to research its options.

"We're pleased that the commission kind of finalized this discussion as they did," said Jonathan Koehn, the city's regional sustainability coordinator. "From the customers' perspective, it's a very positive outcome because it maintains their access to programs."

The decision also allows the city to focus on researching the costs and feasibility of creating a municipal utility without also having to fight Xcel to maintain existing programs, Koehn said.

"Our position was that it wasn't time to have this dialogue," Koehn said. "There were a lot of unknowns. This gives us time to do the appropriate analysis and have that discussion at an appropriate time."

The commissioners plan to keep the Xcel-Boulder docket open for the time being.

Terry Bote, a spokesman for the PUC, said a written order should be filed soon. That order will include a number of questions for the city and Xcel about timing and what actions in the municipalization process would trigger an appropriate filing at the PUC.