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Boulder City Council votes to start process for acquiring local poles, wires from Xcel Energy


From the July 29, 2013 issue of Public Power Daily

Originally published July 29, 2013

By Jeannine Anderson
Editor
At a special evening meeting on July 24 that lasted for four hours, the City Council in Boulder, Colo., voted to begin condemnation proceedings to acquire the local electricity distribution system from investor-owned Xcel Energy. The City Council is expected to take another vote on the matter at its next regular meeting on Aug. 6.

The day before, at a six-hour City Council study session, an  independent evaluator hired by Boulder reported that the city’s models for a municipal electric utility meet the requirements of Boulder’s Home Rule Charter. The independent review, conducted by PowerServices Inc., verified projections made by the city. Among those projections is that if Boulder forms a city-owned electric utility, the municipal utility’s rates would not exceed those charged by Xcel at the time of acquisition.

Boulder has been studying options for a more locally controlled, greener energy future for the last two years. Residents of the Colorado community approved two ballot measures in November 2011 that authorized the city to continue to explore the possibility of purchasing Xcel Energy’s distribution system and forming a city-owned utility. (See the Nov. 3, 2011 Public Power Daily.)

The effort to create a municipal utility in Boulder is driven in large part by a desire for cleaner, more renewable sources of energy. In a 2011 survey, 71 percent of respondents said they support municipalization and said they thought the city would be better than Xcel Energy at offering renewable sources of energy and reducing carbon emissions.

"Boulder's energy supply is one of the most carbon-intensive in the nation," the city says in a section of its website devoted to its energy future. "We're working to change that."

In 2002, Boulder became one of the first cities in the country to pass a resolution in support of the Kyoto Protocol establishing the goal of reducing greenhouse gas emissions to 7 percent below 1990 levels by 2012. In 2006, Boulder voters approved the Climate Action Tax, which the city describes as the nation's first carbon tax.

At the July 23 City Council meeting, Gregory Booth, president of North Carolina-based PowerServices, said his firm assessed the city’s energy models and compared the city's calculations to its own modeling assumptions. The utility modeling conducted by city staff and the Boulder "Energy Future" team was among the most robust that the PowerServices team has reviewed, Booth said.

Booth confirmed that a city of Boulder electric utility could meet all the requirements for forming an energy utility that Boulder has set forth in its charter, namely: that electricity rates not exceed those charged by Xcel at the time Boulder acquires the system; that the rates produce enough revenue to pay operating expenses and debt payments, plus a reserve worth 25 percent of debt payments; that the system be as reliable as Xcel's; and that the city have a plan to reduce greenhouse gas emissions and increase its use of renewable energy.

Booth also said the city "has a strong likelihood of being able to offer rate parity with Xcel over a 20-year period," reported the Boulder Daily Camera.

In a June 17 request to the Federal Energy Regulatory Commission, APPA asked for intervenor status to support Boulder's petition to the commission asking it to issue an order stating that the city would have no stranded cost obligations for the portion of wholesale power it may continue to buy from an Xcel subsidiary, Public Service Co. of Colorado. (See the June 24 Public Power Daily.)

A detailed report issued by the city in late February found that creating a city-owned utility would pay off in the near term and over 20 years. "The opportunity exists for Boulder to transition to a new sustainable, low-carbon emission society, and it is coming much faster than anyone had anticipated just a few years ago," the city said. (See Public Power Daily, March 4.) 

The July 23 and July 24 special City Council meetings were televised by Boulder's Channel 8 and videos of both sessions are posted on the city's video player and archive page.

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