City staff recommends parting with Xcel

BOULDER – The city of Boulder’s staff is recommending to the city council to move forward with pursuing a local electric utility, including adopting an ordinance to acquire Xcel Energy Inc.’s distribution system either through negotiations or, if necessary, by condemnation.

The memo was posted on the city’s website Thursday afternoon.

City council will discuss the matter Tuesday, July 23, during a study session. The council will consider a first reading of a condemnation ordinance during a special meeting Wednesday. If the council approves the ordinance Wednesday, a second reading, public input and a final vote of approval would be required on Aug. 6 to move forward with condemnation.

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In the city’s memo, updated modeling scenarios showed that costs of municipalization could be higher than in previous models. But even with the higher costs involved, staff believes the benefits of moving forward still outweigh the risks and that requirements in the city’s charter with regard to municipalization can be met.

Also included in materials released on the city’s website Thursday was a memo outlining the findings of a joint city/Xcel task force. In that summary, Xcel Energy outlined eight products that it is willing to explore with Boulder to “reduce energy demand, increase use of renewable energy and distributed generation, reduce use of coal for generation of electricity, modify retail rates and reduce carbon emissions.”

The eight products are:
1. Conducting research using the SmartGrid installed in Boulder to test the impacts of distributed generation on local distribution systems (and other related research and development using the SmartGridCity infrastructure.)

2. Expanding energy efficiency and demand response programs, with the city contributing funds to augment Xcel Energy funds to create additional energy efficiency and demand response opportunities.

3. Expanding local distributed generation in Boulder by having the city offer incentives in addition to the incentives offered by Xcel Energy to attract more participation.

4. Forming with the city an energy efficiency/distributed generation incubator to encourage local Boulder businesses and investments in new technologies.

5. Unbundling Xcel Energy electric rates to provide better price signals to encourage further adoption of energy efficiency, demand response and distributed generation.

6. Offering a “Green City Rate” that would allow participating communities to help design rates that encourage energy efficiency.

7. Providing an environmental redispatch option where customers and/or communities could pay the incremental cost of Xcel Energy burning gas instead of coal to generate electricity, cutting in half the carbon emissions for the megawatt hours produced.

8. Providing a mechanism for communities to cause more wind and/or solar resources to be added to the Xcel Energy system and dedicated to the participating community.

Those products, however, did not amount to the business partnership the city was looking for in entering the task force that would have given the city more control in investment decisions. City staff, in its memo to city council, contended that the products offered by Xcel likely would result in customers paying increased rates for those products.

Also expected to be released Thursday afternoon or early Friday are materials related to the steps that would be needed for condemnation and well as ballot measures that will be discussed at the July 24 special meeting.