BOULDER – Boulder’s team of energy advisers and legal experts believe the city should be able to create a municipal “utility of the future,” according to a report released Thursday.
The 38-page report was prepared for the Boulder City Council and lays out strategies for the city, including ones that could lead to a legal fight between Boulder and Xcel Energy Inc.
A large team of city planners and lawyers, as well as technical and legal advisers hired by the city, has been studying for months whether Boulder could form a utility. Its studies sought to find out if the utility could be as reliable as Xcel Energy, with lower carbon emissions and more energy from renewable sources. The utility also would have to charge lower rates.
Boulder voters in November 2011 narrowly approved measures giving city council the authority to study the issue and create the utility. The measures also established criteria the utility must exceed.
“Based on the current analyses, the answer to whether it is possible to municipalize is yes, and the findings to date are promising in terms of the potential value a local electric utility could bring when compared to other alternatives,” the memo said.
Xcel Energy is the investor-owned utility that owns and operates the system that serves Boulder and has said it does not want to give up its system.
The report does not recommend whether Boulder should municipalize. One of the scenarios it models is based on the status quo arrangement with Xcel Energy. However, five of the six scenarios it modeled would require some form of municipalization.
The report sets an Aug. 6 target date for when the city’s legal staff wants the authorization to begin acquisition negotiations with Xcel Energy, should city council opt to go forward with municipalization. That could lead to eminent domain litigation if the two sides do not agree on a price.
The report models six options for the council to consider, and the models are based on 20-year projections. It can be found online at www.BouldersEnergyFuture.com.
Thursday afternoon, Xcel Energy said it does not plan to release an immediate response to the proposals, spokeswoman Michelle Aguayo said.
“We’ll see it the same time as everybody else. It’s going to take us some time to digest it,” Aguayo said.
The company doesn’t think a “knee-jerk reaction” would be appropriate, she said.
“The city’s put a lot of thought into its plan, and we’d like to put a lot of thought into our response.”
Staff will present its findings Tuesday at a city council study session. The meeting is open to the public, and it will include time for public testimony.
Under the current timeline, the city would take public comments, including feedback from the business community. City council is scheduled to tell staff whether to continue down the road to municipalization on April 16.
If the council says yes, city staff would begin meeting with credit rating agencies, establish vendor lists and pricing and prepare for necessary legal action, the memo said.
The city would consider a partnership with Xcel Energy that would be somewhere between the status quo and full municipalization, the report said. In December, both parties said they would discuss possibilities, but conversations between the sides have not proceeded very far.
A Boulder-Xcel hybrid was not modeled “because the city does not have sufficient information from Xcel about the type of agreement – from among those proposed by the city in December 2012 or new ideas the company might have – Xcel would be interested in pursuing,” the report said.
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