At the end of 2010, Xcel Energy’s franchise agreement with the city of Boulder ended. Xcel no longer charged electricity users a franchise fee which had gone to the city’s general fund. Instead, the voters in 2010 agreed to pay an equivalent utility occupation tax (UOT) to go into the city’s general fund. In 2011 the voters agreed to pay a bit extra from 2012 through 2017, with the extra UOT going to fund the costs of setting up a municipal electric utility.
Municipalization litigation and regulation costs – including engineering study and design costs for Public Utility Commission proceedings – have exceeded the amount collected by the extra UOT. Money from the city’s reserve fund has been used to cover the deficit spending. The extra UOT expires at the end of this year; the city wants to continue collecting the extra UOT for five years and collect additional taxes on top of the extra UOT in 2018 ($4M) and 2019 ($3M).
The city estimated the additional tax on an average residential bill that residents will pay compared to 2017:
2018 = $2.37/mth or $28.44/yr
2019 = $1.78/mth or $21.36/yr
2020-2022 = same as 2017
If 2L doesn’t pass, then the average consumer would not pay the $2.37/mth nor the current extra UOT which is about $1.10 (my estimate) so an average 2018 electricity bill would go down about $3.47/mth or about $42/yr.
The city anticipates needing all five years of extra UOT revenue (about $17M) over the next three years. Money from the reserve fund would cover the costs in the short term with the reserve fund getting replenished with the last two years of extra UOT funds. Passage of 2O does not guarantee success of the city’s municipalization efforts.
See Ballot Question 2O for more information about the cost of municipalization.
Recommendation: leaning
This ballot measure is seen by many as a referendum on the entire municipalization process. Who gets elected to city council this fall will be another indication of the electorate’s mood on municipalization. If 2L doesn’t pass, the city council could continue to fund municipalization efforts using general fund money.
If the following are most important to you, then vote for the 2L tax.
1) Meet Boulder’s climate goal of 100% renewable electricity energy by 2030 or at least sooner than Xcel would get to the goal.
2) A customer-owned utility -- profits returned to customers and no regulatory barriers to energy innovations.
3) Providing a role model of a new municipal electric utility for other cities.
If the following are most important to you, then vote against the 2L tax.
1) Not borrowing from the city’s reserves to pay muni costs in the near future.
2) Having a clear path toward the municipalization goal at the time of this election.
3) Having a long-term, fixed-price energy contract rather than depending on variable spot prices on the wholesale electricity market for electricity needs.
Regardless of which way you vote, we should work to change clean-energy regulations at the state, federal and global levels. For instance, the city of Boulder currently sells wholesale electricity from its Boulder Canyon Hydro plant to other customers, rather than using it directly for municipal residents or the government.
Boulder is still clarifying its municipalization vision. The Public Utilities Commission (PUC) “dismissed” an earlier application for Boulder to acquire Xcel facilities which only served customers outside of the city limits. Under the current plan, Boulder’s customers would be limited to city residents and businesses. However, two city-owned parcels – the Boulder Reservoir and the Open Space and Mountain Parks Department at Cherryvale Road and South Boulder Road – would continue to be Xcel customers.
Boulder planned to acquire Xcel’s facilities or, at a minimum, co-locate Boulder’s facilities in six of Xcel’s substations. The PUC found it “premature” to authorize the transfer of assets within the substations; Xcel will continue to service customers from four of those substations. The PUC also refused to compel Xcel to allow joint use of utility poles, although Xcel and Boulder could come to such an agreement. Boulder plans to argue that federal law requires Xcel to allow open access to any utility, such as a municipal utility, under “just and reasonable” terms.
IBM is located in the city limits and is the sole customer of one of the substations. IBM asked the PUC to give it special treatment and let it continue as an Xcel customer for at least 5 years after the Cut-Over Date, when the municipal utility starts distributing electricity. The PUC denied IBM’s request for the time being, but IBM is allowed to bring additional evidence to the PUC in the future.
The bottom line is that Boulder will be working with Xcel for a long time, even if Boulder succeeds in its quest for municipalization. One of PUC’s three conditions for Boulder is to write up a plan for giving Xcel a permanent easement and other property rights. Because the municipal boundaries and the substations’ customer boundaries are not aligned, the separation process is particularly difficult. The other two conditions require that Xcel work “in good faith” with Boulder to correct the list of assets to acquire in the muni process and to file agreements between Xcel and Boulder regarding Boulder’s payments to Xcel.
The “good faith” phrase was an acknowledgment by the PUC that Xcel is putting up roadblocks. Meanwhile, Boulder made some extravagant demands, asking the PUC to make Xcel pay for Boulder’s municipalization construction costs until the Cut-Over Date – a bit reminiscent of “We’re going to build a wall and Mexico is going to pay for it.” PUC not only said that Boulder has to pay for all the construction costs for its new facilities, but Boulder has to pay for any of Xcel’s construction costs related to the separation plan so that non-Boulder customers don’t finance any of Boulder’s muni.
More will be known after Boulder and Xcel return to the PUC in the 90-day window. Unfortunately for those voters who want more information, the November election occurs before the 90-day PUC deadline.
You may also see Xcel called by its utility subsidiary’s name, Public Service Company of Colorado.
Website for the Yes side (Empower Our Future)
http://empowerourfuture.org/election-2017-muni-related-ballot-measures/
City of Boulder Climate and Energy Goals
https://bouldercolorado.gov/climate
Facebook Page for the No side (No on 2L)
https://www.facebook.com/Noon2L/
Xcel Energy says that they will not participate in this campaign, but “would prefer that Boulder ultimately opt not to pursue the path of forming a municipal utility.” Below is a link to their recently released Colorado Energy Plan with 55% renewables by 2026.
https://www.xcelenergy.com/company/rates_and_regulations/resource_plans/colorado_energy_plan
Approved Ballot Language
BALLOT ISSUE 2L CITY OF BOULDER UTILITY OCCUPATION TAX INCREASE AND EXTENSION
SHALL CITY OF BOULDER TAXES BE INCREASED $4,000,000 ANNUALLY (IN THE FIRST YEAR) THROUGH AN INCREASE OF UP TO THAT AMOUNT IN THE CURRENT UTILITY OCCUPATION TAX IN THE YEAR 2018; AND $3,000,000 IN THE YEAR 2019; AND SHALL THE PORTION OF THE CITY'S UTILITY OCCUPATION TAX APPROVED BY VOTERS ON NOVEMBER 1, 2011, WHICH IN 2017 WAS IN THE AMOUNT OF $2,015,710, BE EXTENDED FROM ITS CURRENT EXPIRATION DATE OF DECEMBER 31, 2017 THROUGH DECEMBER 31, 2022; AND SHALL THE EXTENSION AND THE ANNUAL INCREASE IN THE TAX BE USED TO FUND COSTS ASSOCIATED WITH A MUNICIPAL ELECTRIC UTILITY THAT WILL SUPPORT BOULDER'S CLEAN ENERGY GOALS AND THE COMMUNITY'S COMMITMENT TO THE PARIS CLIMATE AGREEMENT, IMPROVE SYSTEM RELIABILITY, AND CREATE ENERGY-RELATED BUSINESS OPPORTUNITIES, PROVIDED THAT IF THE CITY OF BOULDER DECIDES NOT TO PROCEED WITH A MUNICIPAL ELECTRIC UTILITY, THE TAX SHALL EXPIRE AFTER COSTS ASSOCIATED WITH THE MUNICIPAL UTILITY EFFORT ARE PAID; AND SHALL THE INCREASED AND EXTENDED PORTION OF THE TAX BE SUBJECT TO THE SAME TERMS AND CONDITIONS AS THE ORIGINAL TAX AND ALL EARNINGS THEREON (REGARDLESS OF AMOUNT) CONSTITUTE A VOTER APPROVED REVENUE CHANGE, AND AN EXCEPTION TO THE REVENUE AND SPENDING LIMITS OF ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION?
For the Measure ____
Against the Measure ____
See Ordinance No. 8189 to put Issue 2L to the voters
https://bouldercolorado.gov/central-records/document-archive then click on Browse City Council Records > Ordinances > 2017 > 8189
Municipalization litigation and regulation costs – including engineering study and design costs for Public Utility Commission proceedings – have exceeded the amount collected by the extra UOT. Money from the city’s reserve fund has been used to cover the deficit spending. The extra UOT expires at the end of this year; the city wants to continue collecting the extra UOT for five years and collect additional taxes on top of the extra UOT in 2018 ($4M) and 2019 ($3M).
The city estimated the additional tax on an average residential bill that residents will pay compared to 2017:
2018 = $2.37/mth or $28.44/yr
2019 = $1.78/mth or $21.36/yr
2020-2022 = same as 2017
If 2L doesn’t pass, then the average consumer would not pay the $2.37/mth nor the current extra UOT which is about $1.10 (my estimate) so an average 2018 electricity bill would go down about $3.47/mth or about $42/yr.
The city anticipates needing all five years of extra UOT revenue (about $17M) over the next three years. Money from the reserve fund would cover the costs in the short term with the reserve fund getting replenished with the last two years of extra UOT funds. Passage of 2O does not guarantee success of the city’s municipalization efforts.
See Ballot Question 2O for more information about the cost of municipalization.
Recommendation: leaning
This ballot measure is seen by many as a referendum on the entire municipalization process. Who gets elected to city council this fall will be another indication of the electorate’s mood on municipalization. If 2L doesn’t pass, the city council could continue to fund municipalization efforts using general fund money.
If the following are most important to you, then vote for the 2L tax.
1) Meet Boulder’s climate goal of 100% renewable electricity energy by 2030 or at least sooner than Xcel would get to the goal.
2) A customer-owned utility -- profits returned to customers and no regulatory barriers to energy innovations.
3) Providing a role model of a new municipal electric utility for other cities.
If the following are most important to you, then vote against the 2L tax.
1) Not borrowing from the city’s reserves to pay muni costs in the near future.
2) Having a clear path toward the municipalization goal at the time of this election.
3) Having a long-term, fixed-price energy contract rather than depending on variable spot prices on the wholesale electricity market for electricity needs.
Regardless of which way you vote, we should work to change clean-energy regulations at the state, federal and global levels. For instance, the city of Boulder currently sells wholesale electricity from its Boulder Canyon Hydro plant to other customers, rather than using it directly for municipal residents or the government.
Boulder is still clarifying its municipalization vision. The Public Utilities Commission (PUC) “dismissed” an earlier application for Boulder to acquire Xcel facilities which only served customers outside of the city limits. Under the current plan, Boulder’s customers would be limited to city residents and businesses. However, two city-owned parcels – the Boulder Reservoir and the Open Space and Mountain Parks Department at Cherryvale Road and South Boulder Road – would continue to be Xcel customers.
Boulder planned to acquire Xcel’s facilities or, at a minimum, co-locate Boulder’s facilities in six of Xcel’s substations. The PUC found it “premature” to authorize the transfer of assets within the substations; Xcel will continue to service customers from four of those substations. The PUC also refused to compel Xcel to allow joint use of utility poles, although Xcel and Boulder could come to such an agreement. Boulder plans to argue that federal law requires Xcel to allow open access to any utility, such as a municipal utility, under “just and reasonable” terms.
IBM is located in the city limits and is the sole customer of one of the substations. IBM asked the PUC to give it special treatment and let it continue as an Xcel customer for at least 5 years after the Cut-Over Date, when the municipal utility starts distributing electricity. The PUC denied IBM’s request for the time being, but IBM is allowed to bring additional evidence to the PUC in the future.
The bottom line is that Boulder will be working with Xcel for a long time, even if Boulder succeeds in its quest for municipalization. One of PUC’s three conditions for Boulder is to write up a plan for giving Xcel a permanent easement and other property rights. Because the municipal boundaries and the substations’ customer boundaries are not aligned, the separation process is particularly difficult. The other two conditions require that Xcel work “in good faith” with Boulder to correct the list of assets to acquire in the muni process and to file agreements between Xcel and Boulder regarding Boulder’s payments to Xcel.
The “good faith” phrase was an acknowledgment by the PUC that Xcel is putting up roadblocks. Meanwhile, Boulder made some extravagant demands, asking the PUC to make Xcel pay for Boulder’s municipalization construction costs until the Cut-Over Date – a bit reminiscent of “We’re going to build a wall and Mexico is going to pay for it.” PUC not only said that Boulder has to pay for all the construction costs for its new facilities, but Boulder has to pay for any of Xcel’s construction costs related to the separation plan so that non-Boulder customers don’t finance any of Boulder’s muni.
More will be known after Boulder and Xcel return to the PUC in the 90-day window. Unfortunately for those voters who want more information, the November election occurs before the 90-day PUC deadline.
You may also see Xcel called by its utility subsidiary’s name, Public Service Company of Colorado.
Website for the Yes side (Empower Our Future)
http://empowerourfuture.org/election-2017-muni-related-ballot-measures/
City of Boulder Climate and Energy Goals
https://bouldercolorado.gov/climate
Facebook Page for the No side (No on 2L)
https://www.facebook.com/Noon2L/
Xcel Energy says that they will not participate in this campaign, but “would prefer that Boulder ultimately opt not to pursue the path of forming a municipal utility.” Below is a link to their recently released Colorado Energy Plan with 55% renewables by 2026.
https://www.xcelenergy.com/company/rates_and_regulations/resource_plans/colorado_energy_plan
Approved Ballot Language
BALLOT ISSUE 2L CITY OF BOULDER UTILITY OCCUPATION TAX INCREASE AND EXTENSION
SHALL CITY OF BOULDER TAXES BE INCREASED $4,000,000 ANNUALLY (IN THE FIRST YEAR) THROUGH AN INCREASE OF UP TO THAT AMOUNT IN THE CURRENT UTILITY OCCUPATION TAX IN THE YEAR 2018; AND $3,000,000 IN THE YEAR 2019; AND SHALL THE PORTION OF THE CITY'S UTILITY OCCUPATION TAX APPROVED BY VOTERS ON NOVEMBER 1, 2011, WHICH IN 2017 WAS IN THE AMOUNT OF $2,015,710, BE EXTENDED FROM ITS CURRENT EXPIRATION DATE OF DECEMBER 31, 2017 THROUGH DECEMBER 31, 2022; AND SHALL THE EXTENSION AND THE ANNUAL INCREASE IN THE TAX BE USED TO FUND COSTS ASSOCIATED WITH A MUNICIPAL ELECTRIC UTILITY THAT WILL SUPPORT BOULDER'S CLEAN ENERGY GOALS AND THE COMMUNITY'S COMMITMENT TO THE PARIS CLIMATE AGREEMENT, IMPROVE SYSTEM RELIABILITY, AND CREATE ENERGY-RELATED BUSINESS OPPORTUNITIES, PROVIDED THAT IF THE CITY OF BOULDER DECIDES NOT TO PROCEED WITH A MUNICIPAL ELECTRIC UTILITY, THE TAX SHALL EXPIRE AFTER COSTS ASSOCIATED WITH THE MUNICIPAL UTILITY EFFORT ARE PAID; AND SHALL THE INCREASED AND EXTENDED PORTION OF THE TAX BE SUBJECT TO THE SAME TERMS AND CONDITIONS AS THE ORIGINAL TAX AND ALL EARNINGS THEREON (REGARDLESS OF AMOUNT) CONSTITUTE A VOTER APPROVED REVENUE CHANGE, AND AN EXCEPTION TO THE REVENUE AND SPENDING LIMITS OF ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION?
For the Measure ____
Against the Measure ____
See Ordinance No. 8189 to put Issue 2L to the voters
https://bouldercolorado.gov/central-records/document-archive then click on Browse City Council Records > Ordinances > 2017 > 8189
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