Boulder considering new proposals that could end litigation with Xcel Energy

BOULDER — Two proposals offered by Xcel Energy could end the litigation in Boulder’s effort to create a municipal electric utility.

In a city of Boulder news release, the two proposals are laid out.

• One would be a new partnership between the city and Xcel, which would create a city and Xcel Energy working board that would work to reach Boulder’s goal of achieving 100 percent renewable energy by 2030. The partnership would require a franchise, which Boulder could terminate if it is unhappy with the partnership in five years.
• The second proposal is an option for the city to buy Xcel’s system outright at a price and under conditions set by Xcel Energy.

In a memo to city council, only preliminary costs are included. The franchise option requires Xcel to provide an amount equal to 1 percent of gross electric revenues to be used for undergrounding electric facilities. It would also include half of a percent of gross electric revenues for the first five years. If the city doesn’t cancel the franchise in year five, the undergrounding payment will grow slightly.

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If the city chooses the franchise option, Xcel agreed to pay about $7 million for undergrounding to cover funds lost during the six years the city has been out of the franchise.

Xcel estimates the city’s total cost — if it took the buyout option — to be between $550 million and $750 million, before inflation.  That includes asset purchase and business lost. There is uncertainty to the cost of construction to separate the systems, which could be between $100 million and $200 million.

The news comes the day after the city filed its rebuttal testimony with the Public Utilities Commission, which included significant modifications to its separation plan: most notably the decision to have Xcel control its own system during separation, rather than have the city take it over and lease it back to Xcel while the city separates.

The City Council will hold two meetings regarding the new Xcel proposals: a study session on April 5 and a meeting for public testimony on April 17.

The council will decide if it should inform the Public Utilities Commission that it wishes to pause the municipalization proceedings so the proposals can be put on a November ballot.