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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 Feb. 21.
The 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.
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A large team of city planners and lawyers, as well as technical and legal advisers hired by the city, have 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.
Rates and reliability have emerged as the major concerns being voiced by large companies.
Ball Aerospace & Technologies Corp. is based in Boulder and has satellite assembly and testing facilities in the city. Ball’s operations require a lot of power, and a loss of power could damage equipment that is being tested or built.
Ball has been watching the debate and reviewed the recent report, according to an emailed statement from Ball Aerospace spokeswoman Roz Brown.
“Ball is following the electric-utility municipalization issue closely. As one of the larger energy users in Boulder, we are concerned how municipalization could impact our costs. Additionally, we have unique reliability needs. Based on what we’ve read in the staff report so far, we agree that the municipalization seems possible, but we’re still waiting to be convinced that the gains outweigh the risks,” the statement said.
The University of Colorado-Boulder also has watched developments closely. CU Boulder officials have met with the city and discussed what’s going on, said Frances Draper, vice chancellor for strategic relations.
A concrete proposal could be years away, she said, so the university has not taken a position on whether or not Boulder should form a utility.
“There are a lot of people working on it. I don’t think we’ll know what it looks like for a long time to come,” Draper said.
CU and Boulder share a commitment to energy efficiency and sustainability, but the university can’t risk losing power, so reliability is the first concern, she said. The campus essentially is a city within the city, providing housing for thousands of students. As at Ball, CU researchers conduct experiments that would not be able to survive a loss of electricity.
“We could lose years worth of work,” Draper said.
Cost matters, too, and a big increase in rates could lead to less money for other uses or even higher tuition or student fees, Draper said.
The campus already is taking steps to mitigate its electric bill, including restarting its cogeneration facility. That could make CU less dependent on any utility, but it will not generate enough power to make CU self-sufficient or give it the ability to “decouple” from a utility, Draper said.
CU-Boulder is not investigating whether it could remain an Xcel Energy customer even if the city municipalized.
“Whoever’s running the system, we’re attached to them,” Draper said.
Businesses in Boulder that are much smaller than Ball or CU also have concerns. One of them is simply staying knowledgeable about what’s going on, Boulder Chamber public affairs director Angelique Espinoza said.
Only a few businesses have staff with the expertise or time to follow the issue as closely as Ball. Because of that, the chamber wanted the city to release the report well before the city council took up the issue in a study session.
Businesses would like to understand how the city reached its findings and what the impact could be.
The short amount of time between the report’s release and the council study session “makes it really hard for anyone to say anything intelligent about the report,” Espinoza said.
The city will host an open conference call from noon to 1 p.m., Tuesday, March 12, that will focus on feedback from the business community. Information about joining the call is on the city website.
Boulder staff presented its findings to the council Feb. 26 during a study session that occurred after the Business Report went to press.
The report models six options for the council to consider that are based on 20-year projections. It can be found online at www.BouldersEnergyFuture.com.
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 the 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.
Xcel Energy also is taking its time before it knows when or if it will release a detailed response.
“The city’s put a lot of thought into its plan, and we’d like to put a lot of thought into our response,” spokeswoman Michelle Aguayo said the day the report was released.
The city council is scheduled to tell the city staff whether to continue down the road to municipalization on April 16.