Opinion: Safeguards in Boulder’s “muni” ballot items


Many Boulder citizens I’ve recently met are intensely interested in the opportunity a municipal electric utility represents to have more economic, reliable, and cleaner power. I have spent hours discussing what would happen if 2B and 2C pass, and how Boulder’s residences and businesses are protected during the process. Here are the major points.
First – Ballot Issues 2B and 2C do not create the municipal utility (or “muni.”) 2C authorizes the city council to create a muni, but only under very stringent financial and other constraints. 2B creates a source of funding to achieve certainty on costs, including the acquisition of the distribution system (poles, wires, transformers, substations, etc.) and of possible compensation to Xcel for stranded assets (facilities that wouldn’t have a market if Boulder leaves Xcel.) If costs are so high that Boulder cannot match Xcel’s rates at the time of anticipated startup, then the process will be halted, and the muni will not be formed.

Second – 2C also grants bonding authority to the utility to cover startup and other costs. Because these revenue bonds (paid for by revenues the utility collects from its customers) must be sold to investors, the bonded amount is automatically limited by the market and the tolerance of ratepayers, just as with Boulder’s water utility (or Xcel for that matter.) In addition, the ballot issue sets stringent revenue requirements that also will limit bond issuance.

Third – 2C’s charter amendments restrict the amount of money the city’s General Fund can receive from the utility to approximately what was received from Xcel through the franchise fee and taxes. Thus the utility cannot become a “cash cow.” And there is no opportunity for “empire building;” Boulder cannot annex much more land (because of the limits in the Boulder Valley Comprehensive Plan) and state law limits munis to serving only within the city limits.

Fourth – The charter amendments also put in place rules for setting electric rates that approximate those that Xcel followed under the now-expired franchise; these protect businesses, institutions and residential customers from discriminatory treatment. All the money the utility collects will go to benefit us Boulder customers, other than the limited amount that will go to replace previously paid fees or taxes.

Fifth – Boulder can start up the utility by hiring expert professionals to run it. For example, the head of ENCO Utility Services, a company that runs munis for various cities, has been to Boulder a number of times to evaluate our distribution system. Former muni directors are interested in helping Boulder, and at least one local firm is very experienced in power purchase arrangements. Boulder also has access to the expertise of a number of nearby Colorado municipal utilities – Longmont, Fort Collins, Loveland, Colorado Springs, etc. And both Boulder’s city manager and city attorney come from cities with munis.

Sixth – We always have direct access to our fellow citizens who are members of the to-be-created utility advisory board, or the city council. This is vastly superior to what happens at the Public Utilities Commission, where you need to hire an attorney (or learn the Byzantine process yourself).

I realize some Boulderites are concerned about turning over the management of the electric system to their own City Council, whose every action is visible to all. But I think this is “familiarity breeds contempt” for the most part. Any mistakes that Boulder councils have made are nothing when compared to the scale of blunders and gross ineptitude exhibited by Xcel and the PUC — from building the unnecessary, billion-dollar-plus Comanche 3 coal plant near Pueblo right in the face of global warming, to the cost overruns on SmartGridCity, three times the original estimate and now up to almost $45 million, for something which has provided Boulder with almost no visible value.


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