Energy, Utilities & Water  June 8, 2016

Boulder, Xcel seeking settlement in municipalization dispute

BOULDER — Representatives from the city of Boulder and Xcel Energy say they are engaged in negotiations about a possible settlement to the ongoing litigation over the city’s efforts to acquire the Xcel property needed to operate its own electric utility.

The announcement was issued jointly Wednesday afternoon by the city and the utility. According to the joint statement, a settlement, if reached, apparently would scrap Boulder’s voter-approved plan for municipalization, allowing Xcel to continue to provide electric service to customers within Boulder city limits.

“We’re very excited,” said John Tayer, president and chief executive of the Boulder Chamber, in an interview with BizWest late Wednesday. “This is an opportunity for the community to achieve its climate-action goals while at the same time maintaining the price and reliability goals that are so important to business success.”

Chamber representatives participated in previous talks between the city and Xcel, Tayer said, “and it was clear that the parties were just too far apart. We’re excited to see that they’ve seized the opportunity to come together, and we’re going to do everything we can to encourage a positive outcome to those discussions. In our capacity representing business interests, we have always supported this type of dialogue.”

The negotiations include ways the city and Xcel could partner to support each other’s shared objectives and plans for reducing greenhouse gas emissions, increasing renewable energy, increasing electric customer choice and program offerings, and supporting local pilot projects that would test innovative solutions associated with electricity generation, delivery and management. According to the statement, the city also is interested in having a greater voice in investments made to the Xcel infrastructure that serves Boulder.

The talks will continue over the next several weeks, the joint statement said.

Any franchise agreement between the city and Xcel would have to be approved by voters, according to the city’s charter. If the parties agree to formally present a proposed settlement to the Boulder City Council before late July, the question could be put on the November ballot. If the settlement came later, the issue could be referred either to a special election or to the November 2017 ballot.

Boulder voters first authorized the city council to pursue municipalization in 2011 if a city-owned utility could meet certain criteria. They then reaffirmed their support for a city-run electric utility in 2013 by approving one measure while rejecting an Xcel counter-proposal.

“While settlement negotiations are typically confidential and sensitive in nature, Boulder and Xcel Energy have decided to publicly acknowledge this ongoing process in an effort to be as transparent and open as possible,” the joint statement said. “This being said, the nature and extent of the discussions will remain confidential unless and until a conceptual agreement is reached, at which time it will be shared with the community and impacted stakeholders.  The settlement would require Colorado Public Utilities Commission review and approval.”

The ongoing talks won’t stop the city or Xcel from pursuing legal options, the statement said. Boulder also will keep working on its application to the state Public Utilities Commission to acquire the Xcel facilities needed to create its own electric utility.

Xcel had filed a motion last August to dismiss the city’s application, a motion that was backed by PUC staff on grounds that the application was incomplete and didn’t comply with past decisions by the PUC.

However, in September the PUC delayed making a decision, instead asking both sides for narrowly focused briefs regarding whether the city’s plan violates the doctrine of regulated monopoly.

“Both Boulder and Xcel Energy share numerous objectives and goals,” said David Eves, president of Xcel Energy in Colorado, in a prepared statement on Wednesday. “We believe working together we can take advantage of each other’s strengths and plans to significantly reduce greenhouse-gas emissions, increase renewable energy and provide more customer choice and programs, which could serve as a road map for other communities in Colorado and the nation. The city of Boulder has been a longtime driver of change, and I hope to work with the city to continue providing excellent service to our electric customers, driving groundbreaking energy policy in Colorado and making a positive difference.”

Added Boulder city manager Jane Brautigam, “While we are continuing to evaluate the company’s proposals as they are filed with the Public Utilities Commission, we respect the recent steps Xcel Energy has taken to increase renewable-energy sources in its new plan and revisit some of the regulatory limitations that make this challenging in Colorado. This makes good environmental and economic sense.

“Engaging in sincere dialogue with Xcel Energy is consistent with the city’s commitment to consider all options for achieving our community’s energy goals,” she said. “I am excited that we have come together to once again explore the possibility of a meaningful partnership.”

Leslie Glustrom, a member of the steering committee of Empower Our Future, said her group “is both very supportive of municipalization as well as being supportive of exploring options of building the relationship with Xcel.

“We don’t see this announcement as scrapping muni at all,” she said. “We just see it as a parallel path. Our goal is to ultimately get the best deal for Boulder, the best deal for other communities served by Xcel and the best deal given that our planet is in crisis.”

Citing studies from the Boulder-based National Snow and Ice Data Center, Glustrom said “we’re turning up the heat and breaking the air conditioner in a planet we can’t leave. That’s the situation. The climate situation is a crisis that’s playing out every day around the world — driven in large part by carbon dioxide emissions from utilities.

“I’m thrilled to see Xcel and the city work together,” she said. “What we aren’t sure of is whether Xcel can move as fast as we want them to move to address the situation we’re in. However, my sense of both the city staff and city council is that neither is anywhere near willing to accept an agreement for an agreement’s sake. If it’s really solid — and it’ll go through incredible scrutiny — they’ll make sure an agreement is the real deal. I’m also pretty confident that the city is competent to develop a separation plan from Xcel that the commission wants to see.

“For us, municipalization is a strategy, not a goal.”

Dallas Heltzell
With BizWest since 2012 and in Colorado since 1979, Dallas worked at the Longmont Times-Call, Colorado Springs Gazette, Denver Post and Public News Service. A Missouri native and Mizzou School of Journalism grad, Dallas started as a sports writer and outdoor columnist at the St. Charles (Mo.) Banner-News, then went to the St. Louis Post-Dispatch before fleeing the heat and humidity for the Rockies. He especially loves covering our mountain communities.
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