The Colorado Supreme Court has revived Xcel Energy Inc.’s legal challenge to Boulder’s plans to establish its own municipal power utility.

The court Tuesday overruled decisions by a Boulder district judge and the Colorado Court of Appeals in saying the 2014 Xcel suit should be heard in district court, the Boulder Daily Camera reports.

Xcel currently supplies power to Boulder, but the city’s voters agreed in 2011 to let officials explore the creation of a municipal power utility that would serve what are now Xcel’s customers. Officials touted the utility as a way to promote clean energy and reduce carbon emissions.

Xcel objected to that proposal; its suit alleged that an ordinance establishing the utility violates the city’s charter, and it asked the district court for a declaratory judgment ruling the ordinance null and void.

After the district court dismissed Xcel’s complaint, the appeals court vacated the lower court’s ruling but nevertheless said Xcel’s complaint was premature because Boulder had not finalized its plans for creating the utility.

But in Tuesday’s ruling, the Supreme Court sent the matter back to district court.

“We conclude that the district court had jurisdiction to hear Xcel’s declaratory judgment claim challenging the (Boulder) Utility Ordinance, and we remand this case to allow that claim to proceed,” the justices said.

The ruling comes as Boulder and the power company negotiate the terms of the city exiting Xcel’s service area, the Camera says.