Clean-energy advocates question Xcel’s settlement proposals

BOULDER — The Boulder City Council will hear public discussion on Monday evening  as whether Boulder should end municipalization litigation with Xcel Energy and put settlement options on the ballot to consider a franchise agreement or a buyout with the utility company.

But several activists in the community think that both settlement options are a bad deal, and Boulder should continue with its hearings with the Public Utilities Commission scheduled for April 26.

“What we want is the best option,” said Alison Burchell, a geologist and clean-energy advocate. “The community consistently says to stay the course, and that’s what we want. Now is not the time to take Xcel’s pause. It’s a premature offramp.”

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After years of working toward creating its own municipal utility, the process is finally drawing to a head. On April 26, the PUC will have an eight-day hearing regarding Boulder’s application to create its own utility and soon after make its recommendation. The council must decide by April 19 — the deadline to tell the PUC whether Boulder and Xcel will go forward with the hearing — whether it will put to ballot an option to franchise with Xcel and/or an option to not go forward with litigation but rather buy Xcel’s Boulder assets for $900 million.

Activists have a problem with both settlements options.

The buyout, they say, is too much.

“It’s going to be very difficult to get,” Burchell said, “even if you could get the community to say ‘the world needs us to do this at the greatest cost that we can possibly manage.’ Why should Boulder set the standard for the state, when it obligates future communities and generations to agree to pay Xcel a super premium for clean energy, when clean energy is the right scientific option? Why should Boulder set a standard that obligates a future generation?”

For former city councilmember Steve Pomerance, the numbers don’t add up.

“It’s so ridiculously too expensive,” he said.

The plan had been for Boulder to gradually depart from using Xcel’s service, and based on how Xcel makes its money — by investing in utility and distribution systems — the cost of business lost and assets does not equal the $900 billion Xcel is saying Boulder should pay.

“These exit terms are so onerous for this buyout, no one could conceivably do it,” Pomerance said. “To pay twice for hardware and 25 percent on rates, for doing nothing. No one would invest in it.”

Pomerance doesn’t see the value in taking the other settlement option, the partnership. That deal would be a 20-year franchise agreement that would let Boulder exit after 10 years or 15 years, but also offers a special exit option after year 5.

But Pomerance said there isn’t anything special about a franchise agreement for Boulder: Given state law, any option Xcel offers to Boulder has to be available to any other of Xcel’s franchisees, he said.

“There’s a ‘most favored nation’ clause in these franchise agreements,” he said, “that say if Boulder gets something special, everyone else gets it also.”

Pomerance said he doubts that any promises Xcel makes to Boulder in the partnership option in regards to reaching Boulder’s goals of 100 percent renewable energy would actually happen, given that if Xcel gives something special to Boulder, it has to make it available for all other cities that franchise with the utility. And to get any sort of specialty items, such as a solar garden, Xcel would have to get the PUC to agree to it.

“They haven’t got the PUC on board for any of these promises,” he said. “And it’s not cheap to get Boulder down there to fight for it. So what looked like a deal is now a black hole. The point of that is, Xcel can say anything the want.”

Even if Xcel would be able to make a franchise partnership work with Boulder, Burchell isn’t sure how Xcel is going to help Boulder reach its goal of 100 percent renewable energy.

“How can Council take a vote, when Xcel says it can’t quantify things,” Burchell said.

She added that she’s skeptical. Although Xcel President David Eves said at City Council’s study session he would have more details at the public hearing as to how they can reach 100 percent renewable, Burchell has doubts as to why concrete information hasn’t been presented before.

“They can go to the PUC and are able to present a model to the decimal point on what their energy profile will look like in the future, approximate what it costs and what the return on investment will be,” she said. “Yet when they make this presentation, there’s nothing in the franchise proposals that quantifies ways to these goals or their costs. So where’s the beef?”

Looking ahead, both Pomerance and Burchell said they thought City Council would come to a similar conclusion Boulder’s activists have.

“There are so many unanswered questions,” Burchell said. “It’s a good reason to stay the course with the regulatory process.”

In the meantime, Boulder’s activists plan to rally ahead of Monday’s hearing, gathering outside the Municipal building at 5 p.m.