City of Boulder 2C – Light and Power Utility

Ballot issue 2C would add Article XIII to the city’s charter and authorize the city to create a municipal electric utility. Models of the municipalization process created by the city and an independent group currently contain many estimated numbers. Passage of 2C would require the current service provider Xcel Energy’s Public Service Company of Colorado to disclose actual numbers. The actual numbers would help inform a decision whether or not to pursue municipalization.

The city council passed Resolution 906 (the “Kyoto Resolution”) in 2002 to reduce greenhouse gas (GHG) emissions by 2012 to 7% below 1990 levels. The Climate Action Plan was created as a roadmap for meeting the goal. In 2006 voters approved a Climate Action Plan tax added to their electricity bills for any energy that wasn’t part of the Xcel Windsource® program. CAP tax revenues fund projects to help the city reduce its GHG emissions. The city is not very close to reaching its Kyoto goal.

Prior to the expiration of the franchise agreement at the end of 2010, the city and Xcel discussed ways to increase the amount of energy that the city gets from renewable sources, but talks broke down. Earlier this year Xcel and the city discussed several ballot measures for the November ballot. Xcel proposed a franchise renewal with a large amount of wind energy but was only willing to have that option on the ballot if a traditional franchise renewal without the wind energy option was also on the ballot. The city refused. Therefore, only the municipalization option is on the ballot. Most municipal utilities were created decades ago with the goals of increasing reliability and decreasing costs, not meeting a climate goal.

If the city creates a municipal electric utility, the city would need to acquire Xcel’s electricity distribution system. The Federal Energy Regulatory Commission (FERC) would determine these “stranded costs.” Legal battles are anticipated prior to any potential start-up of a municipal utility. In other words, municipalization could be a long, ugly process. Xcel would understandably not like to lose a big customer. The city has set conditions to meet, some of them referenced below. If the city cannot meet those conditions, then the city says it would stop the municipalization process (take an “off-ramp”).

Supporters expect the city to purchase energy on the open market, specifically increasing its purchase of natural gas (a “transition fuel”). Natural gas power-generation plants don’t directly help with reducing GHG emissions but can increase and decrease energy output more rapidly than coal power-generation plants so that the city could quickly switch over to renewable energy when Nature decides that wind and solar are available.

Opponents believe that the costs will be much larger than any public model indicates. (Money does seem to be the big issue. I have heard both sides state that the city could reliably provide energy, despite campaign videos to the contrary.) This ballot issue would require the new utility at start-up to provide electricity at rate parity with Xcel, but the city wouldn’t need to start paying back the principal on enterprise revenue bonds (to buy the infrastructure and pay other operating costs) until 2 years after start-up. Meanwhile once the utility starts up, its revenues must be able to cover operating expenses and normal debt payments, plus take in an amount equal to 25% of the debt payments.

Opponents point out that businesses consume a lot of energy in Boulder, but they don’t get to vote on this issue. To address this concern, the new electric utilities board of 9 members would include at least 3 business community representatives who don’t need to be registered voters in the city. Businesses don’t currently get to vote on the city’s electricity provider, but they can spend money on this campaign. Businesses can also move out of town if they don’t like the municipal utility or the lead-up to it. The city leaders should always keep an eye on the business climate in the city as they make decisions.

Xcel would continue to be Boulder’s natural gas utility. A Boulder electric utility could also buy electric power from Xcel.

As reported in the Camera on Oct 5, this ballot issue is easily the largest campaign in Boulder history, at least in terms of dollars, with the opponents reporting expenditures of almost $500,000 and proponents reporting expenditures of about $40,000.

Recommendation: lean toward for

How you vote on this will probably come down to trust, fear or lack of it, and hope. Do you trust the city or Xcel more? Are you afraid of the long, drawn-out process and, in particular, the amount of money that this process may cost? Do you see municipalization as a source of hope for a better future?

My feeling is that if we don’t try for municipalization, we’ll never know what was possible.

In addition to this ballot issue, you might consider studying the city council candidates. The municipalization process could halt if the voters reject 2C or if an anti-municipalization majority takes charge in city council.


Websites for the Yes side
(Citizens for Boulder’s Clean Energy Future)
http://www.renewablesyes.org/
(Boulder Clean Energy Business Coalition)
http://www.boulderdecides.com/

Websites for the No side
(Boulder Smart Energy Coalition)
http://bouldersec.com/
(Xcel Energy has registered an issue committee in opposition to 2B and 2C.)
http://xcelenergy.com/


City of Boulder Ballot Question No. 2C (Approved Ballot Language)

Light and Power Utility

Shall the City of Boulder have the authority to establish, acquire, erect, maintain, and operate, by any lawful means, a municipal light and power utility with programs and improvements that include without limitation generation plants, renewable energy, energy conservation, and distribution systems, with all necessary powers appurtenant thereto if the city council determines that it can acquire the electrical distribution system in Boulder and charge rates that do not exceed those rates charged by Xcel Energy at the time of acquisition and that such rates will produce revenues sufficient to pay for operating expenses and debt payments, plus an amount equal to twenty‐five percent (25%) of the debt payments; and with the reliability comparable to Xcel Energy and a plan for reduced greenhouse gas emissions and other pollutants and increased renewable energy;

Shall the City amend its Charter by the addition of a new Article XIII, “Light and Power Utility,” as described in Ordinance No. 7804 that provides for utility service standards, the creation of an electric utilities department and electric utilities board, and the general powers and limitations of the utility; and

Shall the City, acting through the utility, issue enterprise revenue bonds payable solely from the net revenues of the utility, to finance the costs of acquiring from Xcel Energy and any affiliate thereof, and constructing, relocating, installing, improving, completing or expanding the equipment, facilities and other assets comprising an existing electric distribution system within or outside the City’s boundaries, and paying all necessary or incidental costs related thereto, and shall the City have the authority to adopt all means necessary or appropriate to carry out the requirements, purpose and intent of this measure?
‐ For the measure
‐ Against the measure


See Ordinance No. 7804 to refer 2C to the voters.
http://www.bouldercolorado.gov/files/Elections/2011/Ordinances/7804.pdf