By Sean Maher,
You know the story.
Boulder is a global leader in green tech, green policies and green living. However, more than half the electrons flowing into our homes come from burning coal and that is not very green. Coal power does not fit our values or our brand.
Some in Boulder passionately believe that dumping Xcel Energy is the only way to make sure our energy supply becomes as green as the rest of our community. These people do not trust the company that built those coal plants and nothing will change their minds. The city needs to get in the business of supplying green energy to its citizens, period.
There are others in Boulder who say managing a utility that supplies energy to 44,000 households and more than 6,000 businesses is complicated and we should leave it to the experts. Xcel is not as green as we would like, but they are better than most utilities and improving steadily. Add the complexity and volatility of energy markets to the equation and these folks believe the city would be insane to make this huge investment and take on the accompanying risk.
City staff spent the last year analyzing and modeling what a municipal utility could offer customers in terms of rates and reliability. They concluded they can meet or beat Xcel's rates and still offer a much greener energy supply. They also believe they have a winning case to condemn and purchase Xcel's distribution system in Boulder for a reasonable market value that makes economic sense for the city.
For its part, Xcel is skeptical of the city's modeling and believes the optimistic outcomes are based on fuzzy math. And Xcel lawyers say they have a strong case to resist the condemnation or at least extract a much higher price for local poles and wires as well as for the "stranded cost" of generation capacity that was built to supply power to Boulder.
So we are at a standoff and time is running out. One thing both sides agree on is that litigation will be extremely expensive, distracting and will drag on for years. The battle could start as early as this summer when City Council votes on whether to start the condemnation process.
However, the choice does not have to be this extreme. There is a hybrid approach where energy functions are split between local government and a utility company. It is called Community Choice Aggregation (CCA) and it is working in states as diverse as Ohio and California.
Under this model, the utility (Xcel in our case) maintains ownership of the poles and wires and continues to provide customer service. However, Boulder could purchase energy from other sources and pay Xcel for distribution and billing.
The city would almost certainly continue to purchase power from Xcel, but could add other suppliers and dramatically boost renewables as a share of our energy mix.
CCA allows Xcel to keep its distribution assets, charge Boulder to use them and continue to sell us power. It allows Boulder to purchase more renewables without the huge cost of buying an aging distribution system. Google "Marin Clean Energy" to see how the model is working in Marin County, Calif.
Xcel does not love this idea and I don't blame them. It requires giving up their monopoly on selling power to cities like Boulder and that is a big deal.
However, keeping their assets and related revenues has to be more attractive than the risk of losing Boulder completely. If their lawyers are wrong and the municipal effort does succeed here, it will certainly cause other cities to consider the same path. That is also a big deal.
Perhaps there is a way to structure CCA in Colorado to make it more attractive for utilities like Xcel? Whatever a Colorado version of CCA might look like, it will require changes to state law and will not happen this year.
But it has a shot at passing in the Legislature next year and should at least be part of the conversation here in Boulder. Any middle ground that might help us avoid a long, distracting and hugely expensive legal battle is worth considering.
You know the story.
Boulder is a global leader in green tech, green policies and green living. However, more than half the electrons flowing into our homes come from burning coal and that is not very green. Coal power does not fit our values or our brand.
Some in Boulder passionately believe that dumping Xcel Energy is the only way to make sure our energy supply becomes as green as the rest of our community. These people do not trust the company that built those coal plants and nothing will change their minds. The city needs to get in the business of supplying green energy to its citizens, period.
There are others in Boulder who say managing a utility that supplies energy to 44,000 households and more than 6,000 businesses is complicated and we should leave it to the experts. Xcel is not as green as we would like, but they are better than most utilities and improving steadily. Add the complexity and volatility of energy markets to the equation and these folks believe the city would be insane to make this huge investment and take on the accompanying risk.
City staff spent the last year analyzing and modeling what a municipal utility could offer customers in terms of rates and reliability. They concluded they can meet or beat Xcel's rates and still offer a much greener energy supply. They also believe they have a winning case to condemn and purchase Xcel's distribution system in Boulder for a reasonable market value that makes economic sense for the city.
For its part, Xcel is skeptical of the city's modeling and believes the optimistic outcomes are based on fuzzy math. And Xcel lawyers say they have a strong case to resist the condemnation or at least extract a much higher price for local poles and wires as well as for the "stranded cost" of generation capacity that was built to supply power to Boulder.
So we are at a standoff and time is running out. One thing both sides agree on is that litigation will be extremely expensive, distracting and will drag on for years. The battle could start as early as this summer when City Council votes on whether to start the condemnation process.
However, the choice does not have to be this extreme. There is a hybrid approach where energy functions are split between local government and a utility company. It is called Community Choice Aggregation (CCA) and it is working in states as diverse as Ohio and California.
Under this model, the utility (Xcel in our case) maintains ownership of the poles and wires and continues to provide customer service. However, Boulder could purchase energy from other sources and pay Xcel for distribution and billing.
The city would almost certainly continue to purchase power from Xcel, but could add other suppliers and dramatically boost renewables as a share of our energy mix.
CCA allows Xcel to keep its distribution assets, charge Boulder to use them and continue to sell us power. It allows Boulder to purchase more renewables without the huge cost of buying an aging distribution system. Google "Marin Clean Energy" to see how the model is working in Marin County, Calif.
Xcel does not love this idea and I don't blame them. It requires giving up their monopoly on selling power to cities like Boulder and that is a big deal.
However, keeping their assets and related revenues has to be more attractive than the risk of losing Boulder completely. If their lawyers are wrong and the municipal effort does succeed here, it will certainly cause other cities to consider the same path. That is also a big deal.
Perhaps there is a way to structure CCA in Colorado to make it more attractive for utilities like Xcel? Whatever a Colorado version of CCA might look like, it will require changes to state law and will not happen this year.
But it has a shot at passing in the Legislature next year and should at least be part of the conversation here in Boulder. Any middle ground that might help us avoid a long, distracting and hugely expensive legal battle is worth considering.
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