BOULDER - The Colorado Public Utilities Commission said on Wednesday morning that it will hear a petition filed by Xcel Energy Inc. that requests the PUC to rule that the city of Boulder doesn't have the right to include about 5,800 utility customers who live outside the city limits in its municipal utility service.

Xcel filed the petition with the PUC last month as Boulder explores whether to cut ties with Xcel and create its own municipal utility.

Wednesday's decision makes no ruling in the matter. It simply cleared the way for the PUC to set a timeline for hearing the dispute.

According to Xcel spokeswoman Michelle Aguayo, the PUC set a 14-day timeline for the city and others to file responses and then another seven days for Xcel to file answers. At that point, the PUC will set a hearing date for the matter.

Boulder had filed an objection last week, asking that the PUC deny hearing the petition at all.

"City staff attended this morning's discussion and respects the commission's decision to open a docket on this matter," city of Boulder spokeswoman Sarah Huntley said in an email. "Boulder welcomes the opportunity to fully discuss these issues with the PUC."

In November 2011, Boulder voters approved a pair of measures that authorized the city to create a municipal utility and also allocated $1.9 million per year to study municipalization. The city's proposals for creating a utility include assuming control of the six Xcel substations that service the Boulder city limits. Because some of those substations also serve county residents who live outside the city limits, Boulder is proposing that it take over service for those customers as well.

Xcel has stated that it is not willing to sell its assets to the city. City council is scheduled to vote in August whether to move forward with condemnation proceedings.

It is in condemnation court that the city of Boulder contends the issue of whether the city should be allowed to take over service of the 5,800 customers outside its city limits should be decided, not in front of the PUC.