A local power financial analysis finds that lower renewable electricity prices, lower bond rates and increasing electrification of transportation and buildings means that citizens of Boulder, Colo., can expect that a locally owned utility would at least breakeven financially within five to 10 years of startup.
The analysis was released on Oct. 14 by a coalition called Empower Our Future, a group that opposes approval of a ballot initiative (City Initiative 2C) that is on the Nov. 3 ballot in Boulder. Boulder ballot initiative 2C is opposed by Empower Our Future in part based on the Local Power Financial Analysis, the coalition noted.
If passed, the ballot initiative calls for the city to enter into a new, 20-year franchise with Xcel Energy and end the city’s efforts to create a local, city-run electric utility.
The franchise agreement is a part of a comprehensive settlement agreement with Xcel Energy. The comprehensive settlement agreement would only go into effect if the franchise is approved by voters in the Nov. 3 election.
Empower Our Future “believes that we are experiencing a paradigm shift in world energy markets, largely driven by the imperative to stop and reverse climate change,” the coalition said in the financial analysis.
“Further, we believe that remaining flexible relative to options for sourcing 100% renewable electricity and open to new technologies and policies that make it possible to share electricity more equitably, reliably, and affordably, is critical,” the coalition said.
“We offer this analysis of one option-that of implementing a locally owned electric utility-to demonstrate that we have at least one viable option at our disposal today. All indications are that even more options will be available in the near future, which strengthens our conclusion that entering into a twenty-year franchise agreement with Xcel is both ill-conceived and poorly timed.”
Empower our Future said the report independently evaluates several alternative scenarios using the City of Boulder’s Financial Forecasting Tool, current data, and reasoned projections for the near future to independently determine the financial viability of a locally owned electric utility.
The combination of lower renewable electricity prices, lower bond rates, and increasing electrification of transportation and buildings “has resulted in a situation in which Boulder citizens can, with confidence, expect that a locally owned utility would at least breakeven financially within 5 to 10 years of startup, relative to continuing to source more carbon-intensive electricity from Xcel,” the analysis found.
In addition, the financial scenarios included in the analysis predict that enough savings and cash flow would be created to offer Boulder customers lower electric rates for 100% renewable electricity, and to make investments in the modernization of Boulder’s electric system for the benefit of all.
The analysis also found that the switch to 100% renewable electricity by 2030 would nearly eliminate the City of Boulder’s greenhouse gas emissions from electricity production in contrast to the 80% reduction mandated by the state of Colorado for Xcel.
The report shows that entering into a franchise agreement with Xcel Energy “at this critical time, with the currently proposed terms, is not in the best financial interest of Boulder or its citizens,” the coalition said.
“Rather, Boulder should stay the course, keep our options open, and take the lead in establishing an equitable, clean, modern electricity system for now and generations to come. In our estimation, Boulder can accelerate the electrification of our buildings and transportation systems and enjoy the full environmental benefits of 100% renewably-sourced electricity while capturing the financial benefits of a locally owned electric utility for the welfare of our community.”