Xcel Energy’s substation near 75th Street and Lookout Road. Christopher Wood / BizWest

Boulder city attorney discusses why the city is considering settling with Xcel

BOULDER — It’s time for the future of Boulder’s electric utility to be put to the people.

That’s the message that the city of Boulder shared Friday, in an announcement that two settlement proposals with Xcel Energy would be put to the City Council next month.

“The council can’t make a decision as an executive session,” said Tom Carr, city attorney. “They wanted to vet it publicly and see if it should be put to ballot. They’re interested in public feedback.”

Both the proposals were made in good faith with Xcel, and had been discussed since January 2016. They were done simultaneously to litigation the city filed to create a municipal electric utility.

Carr said the proposals are being brought to the City Council now because two suitable options have been suggested and because a settlement would have to be reached by April 19 — before an eight-day hearing with Boulder, Xcel and the Colorado Public Utilities Commission starts April 26.

The two proposals are conflicting. One would be a franchise partnership between the city and Xcel, which would prioritize Boulder reaching its goal of 100 percent renewable energy by 2030. That option would give Boulder the chance to leave the partnership after five years if the city feels those goals are not being met. The plan is also to have dedicated representatives from the city and Xcel whose job is to work on the partnership.

The other option would create a municipal electric utility — but through a buyout rather than litigation. Carr said that buyout could be about $900 million — far more than the $214 million acquisition price Boulder has in its charter. That $900 million includes inflation, plus $219 million to purchase Xcel’s assets, $255 million to pay what Xcel believes would be lost business and $100 million to $200 million for construction costs. The buyout doesn’t factor in what rates would be.

Whether that premium is a worthwhile price to pay to have the certainty of a settlement agreement is up to the City Council and the public, Carr said.

“It’s a question the council may ask the voters,” he said. “The value of surety is great. We believe we can come in with a lower number if we go through the litigation process, but that is currently at least five more years. A lot can happen. And that depends on rulings from the Public Utilities Commission and condemnation court going in our favor.”

The City Council will have a study session with presentations on the proposals on April 5 and then will have public testimony April 17. The City Council will have to make a recommendation to put one of the proposals, both of them, or none on the ballot by April 19 for the city to make deadline.

Carr recognizes that the decision is a difficult one.

“I’m lucky I don’t have a vote,” he said, “because I’m not sure what I would do.”

 

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