Boulder City Council OKs sending Xcel settlement to voters

BOULDER — Boulder voters will have the opportunity in November to put to rest a decade-long dispute between the city and electrical utility Xcel Energy Inc. (NYSE: XEL).

On a 6-2 vote, Boulder City Council members gave their blessing Thursday to a measure that would put forth a ballot measure for a settlement that would, temporarily at least, put an end to Boulder’s attempt to form a municipal power utility and allow the city to enter into a new franchise agreement with Xcel.

The deal, should it pass, assures the city that Xcel will achieve 80% greenhouse gas reduction by 2030 and support programs such as electrification of city buses through an energy partnership agreement.

It also provides $33 million for the purpose of moving electric lines below ground

The proposed settlement allows the city to resume municipalization efforts at the five-, 10- or 15-year anniversaries for any reason, and in 2023, 2025, and 2028 if Xcel Energy fails to meet specified emission targets.

While the settlement doesn’t provide the level of local control that city-run utility would, “this is a radically different deal than what we’ve looked at before” that helps Boulder get closer to its long-term goals, Mayor Sam Weaver said.

Speakers during Thursday’s public hearing, which featured more than 80 participants, mainly fell into two camps: those who want to provide voters with an opportunity to make a decision on the settlement in November, and those who believe voters still don’t have all of the information they need — namely, exactly how much it could cost the city to move forward with municipalization — to make an educated decision.

“Boulder citizens — the taxpayers — can evaluate this decision,” said Marion Thurnauer, a supporter of putting the question on November’s ballot. 

The anti-ballot camp’s argument was buttressed this week when Boulder released a summary Wednesday of bids it has received as part of its earlier efforts to form a city-run utility. 

“The city received two bids that could fulfill all the power supply requirements of a local electric utility that would achieve the city’s 100% renewable electricity by 2030 target,” a Boulder news release said. “The city also received additional bids for individual solar, wind and battery storage projects that could supply a municipal electric utility or could be developed in partnership with Xcel Energy.”

Full responses to the city’s requests for proposal have not been released, so elected officials and residents are unable to factor these bids into their decisions.

“We don’t yet have enough information to make a final analysis,” public hearing speaker Conor May said. 

Supporters of the settlement included a pair of state officials: Colorado Energy Office executive director Will Toor and Colorado Department of Public Health and Environment environmental programs director John Putnam.

“We’re excited about the value this agreement could bring” to help the state reach climate goals, Toor said. A ballot measure has a “high likelihood of success” if both the city and Xcel act in good faith.

Should the city and Xcel ultimately sign a franchise agreement, it would bring to an end a legal saga that went all the way to the state’s highest court. 

In June 2019, the Boulder City Council voted to repeal a 2014 ordinance that provided a pathway for the city to establish a municipal electric utility, a decision that allowed a lawsuit settlement with Xcel to move forward.

Xcel, through affiliate Public Service Co. of Colorado, sued the city over the formation of that utility, which was never actually used, arguing that the city council overstepped its authority based on limitations of an amendment to the city’s charter in 2011. The amendment gave the city council authority to create a utility only if it first satisfied requirements showing the utility’s financial viability and service reliability.

A Boulder District Court judge dismissed Xcel’s suit in 2015, a decision that was reversed by the Colorado Court of Appeals the following year. The Colorado Supreme Court then overturned both of those decisions, sending the case back to a lower court.

This May, city officials announced negotiations with Xcel to end the municipalization push.

It remains to be seen whether all of these negotiations will matter, as it is the voters who are the ultimate arbiters of whether the deal will move forward.

“This is Boulder’s civil war,” Councilman Bob Yates said. “We’re split right down the middle.” 

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