Boulder’s exploration of a city-run electric utility may make a major change of course, depending on how negotiations between the city and Xcel Energy play out this summer.
In a Tuesday joint news release from the city and private power provider Xcel about public officials’ years-long interest in forming a municipal electric service, the company and Boulder announced they have started to look at new pathways to reach the city’s energy future goals.
That includes alternatives to a municipally managed, community-owned electric utility, the release said.
“When the city started this journey toward its own electric utility, the community had a clear vision to increase local renewable energy, eliminate carbon emissions from its electricity system, improve disaster resilience and provide greater democratic influence in energy decision-making processes,” Mayor Sam Weaver stated in the release.
Work on the process to create a municipal utility will continue through the negotiations, the release said, but the city and Xcel are hopeful the discussions will be productive. Both parties recognize there is a significant community and customer interest in coming to an agreement and a path forward, the release said.
“We believe our efforts over the past decade have contributed to Xcel Energy’s emission-reduction commitments,” Weaver added. “While our specific targets don’t yet totally align, I am hopeful we can work together to bridge the remaining gaps. I am cautiously optimistic that negotiations could be successful and feel that, no matter the ultimate outcome of municipalization, our community’s investment in the project has paid dividends locally and across the country.”
Weaver said the city expects online and possibly in-person public engagement, depending on the course of the coronavirus pandemic, about potential a settlement between the company and Boulder throughout the summer. Any agreement would require a public hearing before City Council, and Boulder’s charter mandates voter approval of any franchise agreement with a power utility.
“We are optimistic that we can work with Boulder officials to help the city achieve its unique energy goals, just as we’re successfully helping other communities across Colorado to achieve their own energy goals,” Alice Jackson, president of Xcel Energy-Colorado, stated in the release. “We are proud to lead the nation’s clean energy transition as the first energy company with a vision to deliver 100% carbon-free electricity to customers by 2050 and are well positioned to assist Boulder in reaching its own energy priorities. We look forward to an engaging conversation on what we can achieve together.”
The city is appealing a District Court decision to dismiss a condemnation process for local Xcel assets started last year. A judge earlier this year paused a second condemnation action filed by the city after the earlier dismissal, ruling the later case should pause while the appeal of the dismissal of the first attempt plays out in court. Litigation has been required for the city to achieve municipal utility ownership, since the city’s purchase offers outside court have so far failed to ink a deal with Xcel.
The condemnation proceedings have been the city’s tool to force a purchase price to be produced through court, which would then be included in a ballot question for Boulder voters to make a final decision on severing from Xcel and moving forward with a public electric service. While the goal was to hold a vote this year, the initial dismissal of the case filed by the city last year set back an election to 2021.
Weaver said neither the coronavirus pandemic, nor last week’s sound defeat of a Pueblo ballot measure that sought to create a city-owned electric utility to exit from service by Black Hills Energy, sparked Boulder and Xcel’s decision to come back to the table. Talks between Boulder and Xcel were renewed concerning a franchise agreement in part because of a change in leadership at the company since a new deal was discussed three years ago, Weaver said, with Jackson taking over its Colorado operations in May 2018 per a LinkedIn profile.
Also contributing was the possibility the city could be involved in the modernization of the electric grid, such as through the creation of microgrids, or areas of the system that are self-sustaining through local power sources, without connection to large-scale transmission, Weaver said.
“Boulder Chamber has always felt that the city could reach its climate goals and sustainable energy goals through conversations and partnership with Xcel, and we’re excited to see these discussions moving forward and will encourage a positive outcome for both parties,” John Tayer, head of the local chamber of commerce, said.
Boulder Mayor Pro Tem Bob Yates and Weaver were in talks with Xcel as far back as January, before the coronavirus largely shut down the United States, and they met again in mid-April, Weaver said. Xcel is also expecting significant declines, up to 6% this year, in commercial and industrial energy use on its Colorado system as a partial result of the pandemic and the widespread business closures it has necessitated.
“The COVID-19 pandemic is having far reaching impacts on individuals and businesses and we are no exception,” Xcel spokesperson Michelle Aguayo said in an email last week on a matter unrelated to the city’s lengthy project.
Pueblo this month saw 77% of electors turn out to shoot down a municipal utility idea, a reversal from a March municipal survey that found 70% of Pueblo residents in favor a public power utility to replace Black Hills, according to Colorado-based writer Allen Best. He argued in a mountaintownnews.net piece published Friday the coronavirus pandemic, with the uncertainty it has brought to many aspects of global economies as well as government financial viability, played a hand in the measure’s defeat.
An organization called Pueblo CARES reported $1.5 million in campaign donations, and it did not disclose the source of the bulk of its donations, claiming it was an educational committee, meaning informational, and did not oppose the municipal utility idea, the outlet reported.
“For those who saw (the municipalization) as risky, the virus probably did enhance their perception of this being a brash and injudicious move,” said David Cockrell, co-founder of a Pueblo advocacy group in favor of a municipal utility, according to the outlet.
The Boulder and Xcel release did not set a target for when an election on a franchise agreement could take place, if their talks are successful, but City Manager Jane Brautigam suggested this fall may be the goal. Ballot questions for November elections must be approved by City Council around August, and “by the end of July, we need to know where we’re going,” Brautigam said. “The community engagement piece will have a quick timeline to it.”
Yates and Weaver, whose views on starting a municipal utility have been at opposite ends of the spectrum with the former strongly opposed, will continue to lead the discussions with Xcel, with city lawyers periodically preparing confidential memos to other Council members on the status of settlement talks, with plans to reveal details on proposals to the public when legally permissible.
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