Suzanne Spiegel: Muni numbers look goodPublished on: Friday, November 18, 2016
Letter to the Editor:
I now see why people have been so excited about Boulder’s move to create a municipal electric utility, the “muni.” I looked over the new financial forecasting tool that the city staff contracted to have done by a company that does this modeling for utilities. And the results are great!
All the scenarios where the muni rapidly increases its renewable energy save so much money that rates could be lowered well below those of Xcel, and investments made to increase reliability and improve energy efficiency. (The only scenario where this doesn’t happen is if the muni buys its power only from Xcel.)
The reasons seem straightforward: First, the costs of renewables are dropping very fast. According to a study directed by two former chairmen of the Public Utilities Commission (and recently presented to the county commissioners), the cost of wind (including backup power) is now cheaper than the operating costs of almost all of Xcel’s coal plants. So these plants are just not economic to run, even if the plant itself were free. Second, Xcel’s financial structure has far too much and too expensive equity, given that their profits are essentially guaranteed.
The tool’s assumptions are very conservative. They assumed that rates would be no more that Xcel’s projected increases, which are similar to the rate increases since Xcel took over Public Service Company of Colorado about 15 years ago. And they assumed that renewable energy would cost the same as Xcel’s current Rush Creek wind project. This is very conservative when you consider that Rush Creek’s costs are over 40 percent higher than the average wind project that is coming online elsewhere. So even if the tax credits disappear under Trump, the numbers still work to our advantage. With the muni we will be way ahead both financially and environmentally.
Suzanne Spiegel lives in Boulder.
This letter to the editor was originally published by Boulder Daily Camera