Julie Zahniser: Proposed Xcel Settlement A Bad Deal for BoulderPublished on: Saturday, April 8, 2017
On April 1, the Daily Camera reported that Xcel had proposed a “settlement” of the municipal utility saga. This proposal is bad for Boulder — it is unfair, overpriced, one-sided and doesn’t meet Boulder’s goals to decarbonize, decentralize, and democratize our electric utility.
After a year and a half of private negotiations, Xcel has finally presented its so called “best and last” offer — but it is neither the best nor likely the last. Xcel’s settlement gives the corporation the power to make all the important decisions but gives Boulder next to nothing.
The proposal asks Boulder to take all of the risk and to pay exorbitant costs, and is reminiscent of Xcel’s misrepresented 2011 wind farm deal which Boulder City Council wisely rejected.
City Council should feel no obligation to suspend the Public Utilities Commission (PUC) application process, which has been authorized numerous times by Boulder voters, to pursue this disadvantageous deal. Boulder citizens’ right to know the outcome of its PUC application should not be dictated by a monopoly utility.
Boulder’s revised separation plan has strengthened its case for a favorable PUC ruling which is scheduled to be issued by the end of June. Now is not the time to interrupt the PUC process. We should finish the effort and find out whether Boulder’s constitutional right to form a municipal utility is a real right or not.
What is wrong with Xcel’s proposal?
It consists of two parts: (a) a proposed “partnership” option, and (b) a “buyout” option. For the reasons below and more, both of these are bad options. Instead, the city should proceed with a third option (c) to reject the Xcel settlement proposal.
(a) The “partnership” is a partnership in name only. The decision-making structure, with board appointees being split with no tie-breaker, would be ineffectual, hardly meeting our democratization goal. Most of what Xcel has offered in its proposal is already available and won’t go anywhere while we finish the PUC process — for example, community solar gardens, Renewable*Connect, and a program for customer purchases of wind power.
Interestingly, the Xcel-operated wind programs charge a premium for renewable power which is available much more cheaply from independent wind farms. Additional new programs of any merit have no guarantee of implementation since they would depend on PUC approval.
In return for accepting the settlement, Xcel gets everything it wants — it locks Boulder into a 20-year franchise agreement, imposes constraints on renewable energy development to franchise customers, and does not incorporate local input, control or flexibility.
Finally, Xcel makes no commitment to close its dirty coal plants — making it impossible for Boulder to achieve its clean energy goals of 100 percent of electricity from renewables by 2030.
(b) The “buyout” is an unfair and over-priced option. Despite the fact that Boulder electricity users have essentially been paying for the poles and wires in their rates, Xcel is demanding 1.8 times what it still has in the facilities. Boulder should not pay one dime more than Xcel has in them, since that’s all that Xcel would receive if they kept the facilities and kept Boulder as a captive customer.
Xcel is also demanding “going concern” payment for 10 years when, presumably, we would be running our own cleaner electric utility. To escape from Xcel, the monopoly’s buyout requires the city to swallow a “poison pill” — payment of huge sums to exit the agreement.
(c) The city should proceed with a third option (c) to continue the PUC proceeding to get a ruling in June and then consider all of its options.
Either of Xcel’s settlement proposals would be a horrible deal for Boulder. The PUC proceeding should not be suspended for an offer that hamstrings our opportunity to pursue clean energy, innovation, local economic benefits, and make a significant reduction in our carbon emissions.
Let’s keep the leverage we have established. Give the Public Utilities Commission the chance to consider our application and give the citizens the chance to make an informed decision based on how the PUC proceeding turns out — that’s a much better position from which to make a good choice.
This Guest Opinion was originally published in the Daily Camera.