Boulder recruiting group to steer utility

BOULDER – It’s time for business leaders to have a say about what a new city-owned, city-run electric company could look like.

Boulder city officials are creating a “governance group,” which is expected to include three people who own companies in Boulder but don’t live there, according to Sarah Huntley, a city spokeswoman.

Boulder residents – possibly ones who didn’t get to vote on the November 2011 ballot questions about whether or not to create a city-owned, city-run utility – also may be asked to join the group, Huntley said. The group may have nine members altogether, she said.

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No deadline had been set by the Boulder County Business Report’s press deadline for when the new group would be formed or would meet. However, city officials expect to discuss input from the group in July, Huntley said. People who serve on the group may someday serve as an advisory group to a city-run utility, she said.

Plans for the new group come about a month after the city decided to form a “working group” that includes representatives named by the city and representatives from Xcel Energy Inc. to discuss how the two sides could work together.

“Frankly, the idea of customers having a voice is really central to creating a municipal utility. It’s one of the core reasons why we have embarked on this project,” Huntley said of the new group.

Since 70 percent to 80 percent of Boulder’s power use comes from companies, it makes sense to involve company representatives in any future decision-making, said Michelle Aguayo, an Xcel Energy spokeswoman.

The new “governance group” is the latest turn of events as city staffers, elected city officials and Xcel representatives jockey for position about how the possible city-owned, city-run electric company may work and how much it would cost.

As part of a schedule put together by the city, staffers are expected to prepare for condemnation proceedings against Xcel, the current electricity provider, to acquire the utility’s infrastructure that delivers energy to Boulder’s residents and businesses. Boulder City Council members plan to make a decision in August about condemnation proceedings.

The city, Xcel and a group of residents that wants to put a bond question on the ballot appear to be ratcheting up the pressure on the utility issue as the August deadline looms.

Meanwhile, more financial information has been released – mainly about how much the electricity infrastructure in Boulder is worth, as well as whether or not the city would have to pay Xcel for “stranded costs.”

Boulder filed a petition with the Federal Energy Regulatory Commission on Friday, May 17, asking for confirmation that it would not have to pay “stranded costs” related to power it may continue to acquire from Xcel in the future. “Stranded costs” is the term used to describe the amount a utility invested to produce electricity that might not be paid back if a customer such as the city of Boulder leaves. Federal law requires customers who leave a utility to pay such costs under certain circumstances.

Xcel has said the city would owe $255 million if it leaves the system in 2017. According to Xcel, the money would cover Boulder’s share of debt for coal plants and other generation assets the company has.

Separately, Boulder staffers hired North Carolina-based PowerServices Inc. on Friday, May 17, to independently review and verify if the city’s models meet its charter requirements on establishing a new electric utility. The city said it plans to decide how much to pay PowerServices after staffers determine the details of the review.

In terms of funding, a 2011 Xcel report estimating that Boulder’s electricity infrastructure assets are worth $150 million – a number being used in city models of how the new utility would work, Huntley said. City staffers believe the figure overstates asset value, but they don’t want to give more specific financial details because of potential future negotiations on the assets, she said.

For its part, Xcel doesn’t want to use the electricity infrastructure amount either, because more potential assets now may be on the table, Aguayo said.

“We’re not for sale. We don’t want to sell,” Aguayo said. “This will go to litigation and the courts have to decide.”

A group calling itself Voters Approval of Debt Limits filed a petition to ask voters in November about debt-limitation provisions related to a possible new city electric utility. The petition also would seek to restrict the service area of a city electric utility.

While ballot initiatives must be limited to a single subject and there were other legal questions about the petition, the group has 90 days to gather about 6,000 signatures – or 5 percent of all registered voters.

Recent city of Boulder analyses show that a city-owned, city-run electric utility could use renewable sources of energy such as wind, solar and hydro for more than 50 percent of its supply and significantly decrease greenhouse gas emissions while maintaining similar or lower rates and reliability than those offered by Xcel.