Matt Appelbaum - Vote Yes on 2L, 2O, 2PPublished on: Sunday, October 29, 2017
I suspect that many, perhaps most of you, are tired of this, believe that the city has lost most of its battles, that the costs and risks aren’t worth it, and that some wonderful partnership with Xcel is right there for the taking. And I understand how you might think that.
But the facts suggest otherwise, if you care to consider them. There are far too many issues to cover here, and I claim only limited expertise on many of them, but here are some items that I suspect cause the most concern and my take on them – which, as you know already, leads me to continue to be a strong supporter of the muni effort.
The battle so far: well, it hasn’t been pleasant. No surprise there since the utilities have had decades to make this effort extremely difficult, even though it is explicitly permitted in the state constitution. With no precedents or roadmap, and some very dubious court and PUC decisions – and a wildly inconsistent PUC that completely changed course with new members – the path has been awfully bumpy. But there is indeed a clear path forward now, with the PUC (thankfully) removing itself from most issues.
The cost: yep, too high. And there is more to come. But, like everything, it must be put into perspective. Over even the first couple of decades of a muni, the city reaps huge rewards, saving us ratepayers tens of millions of dollars and funding the muni well enough to replace Xcel’s ancient equipment, underground lines, and foster innovation.
“But rates will be higher”: well, no. Given Xcel’s continuing rates increases – with more sure to come as they shift to cheaper renewables but charge more for them – the muni’s rates will remain competitive. As an example, let’s say the muni costs an extra $100 million over our worst estimates. That would be paid off with a ~1/2 cent/KwH increase for a few years, declining rapidly to no increase – and keeping the longer term positive results. And this analysis never includes (annoyingly) other large savings that will accrue, such as LED streetlights that can save ~$1 million/year or reduced operating costs given Xcel’s absurdly high overhead rates (easy to do when you’re a monopoly) – and, yes, that will be true even if we hire a company to run the muni at least initially. And – please don’t forget: Longmont’s muni broadband – made possible solely because of their muni electric – saves their residents and businesses at least $20 million/year.
“Xcel will switch to renewables too”: Yes, they will over time, since they are cheaper. But they will do so only in a manner that yields them ever-higher profits, costs us more in ever-higher rates, and ensures their continuing monopoly where they (literally) own all of us and squashes all attempts at creating competition and choice.
“Xcel will increase renewables faster than a muni can”: yes, in the next few years that is likely true. But this is a long-term issue, and once the muni is established it can and will move much, much faster than Xcel. And for lower cost. And renewables aren’t the only issue here; while important, we also need to consider innovation, partnering with CU and local companies, increased resilience via micro-grids, and many other concepts that just won’t happen with Xcel – notably the essential “decentralization and democratization” components.
“But Xcel has already done great things with net-metering for solar and community solar”: OK, this is simply the most outrageous claim. It’s like cheering Exxon for cleaning up their Alaskan oil spill only after fighting it for years. Xcel has repeatedly tried to kill off net-metering for solar since they, like their peer utilities, hate the concept of power being generated that they can’t control. They will continue to work hard on this. Boulder created the concept of community (off-site) solar, but Xcel has put very strict limitations on it since, again, they can’t let others in on their monopoly game. Sure, Xcel may support some ideas we like, but only if it yields them extra profit, and only so long as they are in complete control.
“We can do far better by partnering with Xcel”: this is perhaps the most disingenuous argument, and almost certainly delusional. Xcel has made it crystal clear that a “partnership” is defined exactly as follows: Xcel has full control over all decisions; Xcel takes no monetary risks at all; all projects must yield increased profit for Xcel; the city customers will pay more even if the generated energy costs less; the city customers bear all the risks even though Xcel’s unilateral operating decisions could cost us more money. Not exactly my idea of a partnership. Yes, initially I have no doubt that some offers will be made that might sound good, but in the long-run they’ll be quite painful.
“But Xcel offered us a great deal on a wind farm that we turned down”: It’s astonishing to see this used as a reason to stay with Xcel. That offer – which like Smart Grid City was made at the last moment as a purely political ploy – would now be costing us millions – perhaps tens of millions – of dollars in increased rates. Why? Because we would have put all of our energy eggs into one wind basket at prices that have since plummeted, with – no surprise here! – Xcel controlling everything and the city bearing all the risk. When muni opponents use this example – as many have – you know they’re either just lying or completely irrational.
“But Xcel has lots of experience and the city doesn’t”: Sure, Xcel has great experience at complete incompetence in building Smart Grid City for ~$40 million and getting us all to pay for it, even though it was almost entirely worthless. Thousands of cities, large and small, in the US and internationally, run their own munis…and they do it very well indeed, with greater reliability and lower costs than the for-profit utilities.
“Staying with Xcel will give us more clout on key energy issues at the state level”: No, it won’t, and almost certainly we will lose the leverage we now have. This is a key issue, since, indeed, the essential change that must be made is to break up the monopolies and embrace choice and competition. Our muni efforts have – without doubt – pushed the needle on those conversations, and, by Xcel’s own admission, pushed them toward more renewables as well. Conceding now would send the message that even Boulder is bored with the whole thing…so why should anyone else bother?
“But the $200 – $300 million for a muni could buy us a lot of clean energy”: Well, yes it could, if the money existed. But it doesn’t. The funds for the muni come from muni revenues, from selling power. No muni, no revenue. No revenue, no $200 million. Instead, all that money – and much more – goes off to Xcel, including ~$30 million/year in profit.
“Moving ahead with the muni is still risky and costly”: Yes, there is still risk. While the issues with limited sharing of substations and power lines can be handled fairly easily, there is of course the unknown with the condemnation costs. A huge upset there could indeed be fatal, or nearly so. But there are bigger risks, I think, with sticking with Xcel, as their rates and policies will almost certainly cost us far more in the long run, and we’ll still be owned by them and have no recourse.
So: please consider supporting the muni, even if that’s a bit of a stretch for you. If you think long-term – which you must – that support is pretty easy to get comfortable with. For what it’s worth, I’d be quite surprised if this passes, and I think we will very much regret that fairly quickly once the promised “partnership” benefits become clear as being yet more bad deals, but that’s why corporate interests continue to run the world.
The key ballot issue is 2L, which provides funding for continuing the muni effort. It really doesn’t cost very much, and will be one of your very best investments.
Issue 2O simply ensures that you, the voters, will definitively get to vote on actually creating the muni when all the details and costs are known. It’s the famous go/no-go decision, and the voters will get to make it, not the city council.
Issue 2P continues to allow the council to hold executive sessions (closed to the public) under very strict circumstances regarding the muni, but not for the purpose of killing it off (which would need to be discussed publicly, as is appropriate). While not essential, it sure is extremely useful to have these sessions since litigation strategy just can’t be discussed publicly – and the alternative weakens the council and essentially leaves decisions to staff. I need to add that, while I’ve never felt hobbled by the lack of executive sessions in general, every other community has them, including Boulder County, and uses them quite regularly – and their democratic systems haven’t been degraded.