Opinion: An electric utility for the 21st century


Voting yes on Ballot Issues 2B and 2C will allow Boulder to take the necessary steps to determine if it should become Colorado’s 30th municipal electric utility. 2C authorizes the City to form the utility, but only if stringent financial, reliability and environmental safeguards are met. 2B, which only costs the average household about $1/month, provides funds to complete engineering plans and obtain the legal decisions necessary to finalize costs.
If an independent third party expert determines that rates at start-up will not exceed Xcel’s, and all other conditions are met, Boulder could form a municipal utility, with local control, competitive rates, long term price stability, increased renewable energy, and a 50 percent or higher reduction in CO2 output. Profits that now go to Xcel become savings to Boulder ratepayers. Our energy dollars stay at home. We can remove the restrictive rules on solar installations, promote local innovation, and attract hi-tech businesses. Or Xcel might finally come to the table with a comprehensive clean energy plan (not some wind deal where Xcel determines the numbers and Boulder takes the risks.)
Circumstances are very favorable now. Interest rates are low, so bonds to buy the distribution system will be cheaper than paying Xcel’s high cost of capital to “rent” it. Gas prices are down and surplus gas generation exists, so energy costs will be low. Xcel is rebuilding and repowering many of its power plants, so it can accommodate Boulder’s departure with minimal financial impact.
Sticking with Xcel’s coal plants would be a huge mistake. Coal prices are increasing, and coal plants can’t be easily turned up and down. So when the amount of wind power plus coal power exceeds demand, the wind gets shut down. As Xcel tries to add more wind, these costs will increase dramatically, even at Xcel’s relatively low level of renewable energy. In spite of all the hype about Xcel’s meeting Colorado’s 2020 30 percent Renewable Energy Standard (the real number is actually more than 26 percent because most in-state renewables are counted 1.25 times) we need to achieve multiple times this level if we are to have any impact on global warming.
Xcel can’t seem to manage innovative projects. Xcel’s SmartGridCity project has not provided any obvious value to us customers, and the PUC failed to provide the needed oversight. But in a fit of undeserved generosity with our money, the PUC awarded Xcel two-thirds of its $44-plus million investment, about three times Xcel’s original estimate.
Cities can run electric utilities. There are 29 municipal electric utilities in Colorado — Fort Collins, Colorado Springs, Longmont, Aspen, etc. Nationwide there are over 2,000 munis, including Los Angeles, Sacramento, Austin, Cleveland, etc. Winter Park, Fla. became a muni just a few years ago. Nebraska doesn’t even allow for-profit investor owned utilities.
Boulder, like most Colorado cities, runs its own water utility, and so has related experience. But we don’t have to run a “muni” ourselves; there are real expert professionals lining up to help us run it and deliver cleaner power to us. Boulder also has experience been visionary in its utility management. We looked at the impacts of global warming far in advance of any other city (that I know of anyway) with the 1987 Raw Water Master Plan, which led to the purchase of Barker Reservoir and the Boulder Canyon hydro to help insulate us from the politics of the Colorado River Basin.
2C provides excellent safeguards. Its non-discrimination rate rules, financial restrictions, and the limits on transfers to the General Fund, along with our ability to communicate with council members or vote them out, provide far more protection than with Xcel, where the only option is being frustrated by (or being tossed out of) the PUC “old boys club.”
All utilities, whether public or private, face the same restrictions on bonds — underwriters have to be willing to sell them and investors have to be willing to buy them. These market forces automatically limit how much can be issued. In addition, the Charter language in 2C language requires Boulder to maintain a 125 percent bond coverage ratio. This means that whatever the cost to pay the bonds off, Boulder needs 25 percent extra. And Boulder’s AAA bond rating keeps our interest rates low.
Xcel and its surrogates are spending enormous sums of money trying to convince Boulder voters that creating a municipal utility is risky and uncertain. But the real risk is sticking with Xcel and the status quo. Decisions about our future are being made in corporate boardrooms based on what makes Xcel money, rather than on what serves us best. We would be better off keeping those profits at home, making our own decisions, and doing our part for the planet’s future.


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