Boulder one step closer to power vote

BOULDER – Boulder residents are one step away from being able to decide whether the city should form its own municipal electric utility.

City Council voted unanimously late on Aug. 2 to approve the second reading of ballot measures that, if approved by voters Nov. 1, would give City Council the power to create the utility.

Boulder has been studying municipalization since last summer, when the City Council declined to renew a 20-year franchise agreement with Xcel Energy Inc.

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A final council vote is scheduled for the Aug. 16 City Council meeting, although the heavy lifting on crafting ballot language and resolving lingering questions about how the potential utility would be governed were settled during the nearly seven-hour meeting.

Council members spent about an hour trying to write ballot language that would let voters know there will be conditions that have to be met, such as reliability standards and rate comparability, before the city forms a utility.

But because certain variables remain unknown, most significantly the cost of acquiring the system from Xcel Energy and whether it would be owed money for stranded costs and giving up a going business concern, including the conditions in the ballot question proved challenging.

“I had tried to get something in here that was fairly specific, but that’s just not possible, and we have to accept that,” council member Matt Appelbaum said.

Council decided to form a nine-member advisory board to help oversee the utility. City Council members would appoint all the board members. Council decided to retain the power to set rates and utility policies.

The decision was preceded by a lengthy debate about whether it would be possible to have a depoliticized board. The Boulder Chamber recommended the city manager appoint about half the board’s members in the belief the manager would be less influenced by politics.

Some council members supported the chamber’s proposal and saw it as an attempt to ease fears expressed by some in the business community.

“Part of the reason this was discussed was to eliminate a bit of trepidation of parts of the voting public,” council member George Karakehian said.

Others felt having the appointments made by City Council would offer greater transparency and protect the utility from politics.

“Those who have a political agenda only have one person to convince, instead of nine,” council member Macon Cowles said.

Council also decided to move forward with a proposal to increase the utility occupation tax to raise the $1 million per year the city projects it will need to pay for further legal and engineering costs.

The city expects the occupation tax to collect $1.9 million per year. It will sunset at the end of 2017 unless the city decides before then to abandon municipalization or if the utility has been formed and is operational.

Boulder voters created the tax last November to replace the franchise fee Xcel Energy had paid. Xcel Energy passes the tax on to ratepayers, and about 80 percent of it is paid by commercial customers.

After hours spent on the details, council members finished the meeting discussing the big picture and the likely political and legal fights with Xcel Energy.

Boulder will not get any additional information on what it will cost to form the utility or what rates will be until it has the power to form a utility, Appelbaum said.

“The key pieces that we don’t know are only knowable by proceeding,” Appelbaum said.

“We’re going to have to spend a little bit of money to find out the answers.”

“It concerns me that we are picking a fight with the big guy on the block,” Karakehian said. “They have very deep pockets, and that concerns me. I don’t think our pockets are that deep.”