2011 – Boulder voters OK’d pursuit of municipalization

BOULDER — As 2011 came to a close, the city of Boulder and Xcel Energy Inc. were trying to determine the way forward following Boulder voters’ decision in November to approve two measures that could lead to the creation of a city-owned electric utility.

The election’s outcome set the stage for lengthy negotiations, possible litigation and hearings with federal regulators; although Boulder officials said they still held some hope Xcel Energy would be amenable to a deal that will avoid that.

Xcel Energy emphasized that the vote was merely the start of a long process. It also raised the possibility Boulder might not be able to meet the rate-parity provisions included in the ballot language. Rate parity is among the conditions the city must meet before forming a utility, according to the measure.

The municipalization debate began as a way to help Boulder meet its residents’ environmental goals, but evolved since the summer of 2010, when the city council decided not to renew a 20-year franchise agreement with Xcel Energy.

Xcel believed municipalization costs had been significantly understated by the city, and remained skeptical that Boulder would be able to meet the terms of the initiative, match Xcel’s rates or match the level of renewables it provided.

Xcel Energy said repeatedly that it does not want to sell its Boulder assets.

If Boulder wanted to proceed without Xcel Energy’s consent, it would have to condemn the company’s assets through the eminent-domain process, city attorney Tom Carr said.

Because of the scale and complexity of what Boulder might acquire, negotiations or litigation would be difficult no matter what course Xcel Energy and the city decided to follow.

“This is probably one of the bigger ones (eminent domain condemnations) in Colorado history,” Carr said. “It’s not going to be easy.”