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Showing posts from November, 2012

Opinion: Electric rates 101

The Boulder City Council recently voted to approve the “metrics.” These will measure whether the city has met the minimum standards specified in the charter for authorization to create a municipal electric utility, or “muni.” Even if these requirements are met, the council will still need to decide if the muni’s “value added” is sufficient; that decision is further down the road. One metric requirement has to do with the rates that the muni can charge. The charter says, “The City Council shall establish a light and power utility only if it can demonstrate, with verification by a third-party independent expert, that the utility  can…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 percent) of the debt payments.” Determining rates is generally done in two steps — first, figuring o...

Opinion: Forecasting and decision- making

Some years ago I read Robert Rubin’s book, “In An Uncertain World.” Rubin focused on the process of decision-making when the results of that decision are anything but guaranteed. Many times we have to make choices based on very uncertain forecasts; the key is to do the analysis in the proper context, to give it the appropriate “frame.” Last Thursday evening, the Boulder City Council was discussing the planning process for the Civic Center area that runs along Boulder Creek in downtown. The council is faced with some real issues here — many of the city’s buildings are already in the flood prone area, and climate change will almost certainly increase the frequency and severity of flood events. But how much more is not predictable with any level of certainty, at least not yet. So what is the council to do? The council needs to take the perspective of looking back from 25 or 50 years in the future. Just as some are already asking about past decisions, we do not want our successors to...