Citizen Group Confirms City Model Results: A Muni Makes More Sense than Ever
Boulder Emissions for Electricity Can Be Cut by More than Half at Lower Cost.
BOULDER, CO; July 20, 2015 – Empower Our Future, a citizens group, today announced the release of a white paper detailing results from a study comparing two options for Boulder’s energy future: staying with the “status quo” utility, Xcel Energy’s subsidiary, Public Service of Colorado (PSCo), or opting for a local municipal electric utility (AKA a Boulder Muni).
This study is one in a series of studies that confirms, with very high confidence (more than 90%), that the municipal option is much more likely to provide lower emissions, better financial value, and lower risk for Boulder electricity customers.
Where one study or model by itself could be considered skeptically, study after study by the City of Boulder, independent contractors, and independent citizens groups all show the same overall results. With all these different approaches to modeling, the Boulder community can be confident that a Muni is a better value given the existing protections of the city charter. Each of these studies have been informed by the results and assumptions of previous studies. Yet each study has taken an independent approach, enhancing and checking the results from the previous analysis. Like the scientific process, this strengthens the conclusions at each step.
This new study randomizes assumptions over wide ranges using Microsoft Excel and Monte Carlo techniques using a commercially available package to do the Monte Carlo analysis. This simplifies the analysis to determine the most likely outcomes and risk. The new model and analysis gives the Boulder community increased confidence in the probability of success of a Boulder Muni.
This latest round of analysis concludes that over 20 years, a Boulder Muni can:
1. provide large reductions in fossil fuel use, using no more natural gas than the Xcel option
2. increase renewable energy from sun and wind, to over 70% of Boulder’s energy needs
3. vastly reduce CO2 emissions driving climate change (5.6 – 8.4 Mt vs Xcel’s 18.5 Mt)
4. have lower costs and less risk for customers compared to the projected Xcel option
5. have more than a $100 million positive impact on Boulder’s economy (90%+ confidence)
The results show significantly more renewables at lower cost and risk than previous city or citizen group modeling have shown. For example, none of the modeling done to date has shown more than 50% renewable energy – this study shows more than 70% renewables. The independent financial model that was created for the study confirms the conclusions of the City of Boulder’s 2013 model results that compared a Boulder Muni to Xcel’s status quo. The new model shows that Boulder can have a significantly lower CO2 emission at a lower average cost to Boulder customers. Boulder Emissions for Electricity Can Be Cut by More than Half at Lower Cost
In addition to the financial and environmental results, we hope this study starts a community conversation on just what equitable per capita greenhouse gas emissions are. The study proposes a simplified approach to evaluate Boulder’s electric power emissions in a global context and begins trying to answer the question “what level of emissions is fair to everyone else on the planet?” Even though a Boulder Muni’s emissions may be significantly lower than Xcel’s (50% over the limit found in the study) – we must ask how our emissions can be decreased even further for an equitable and livable world.
The study demonstrates that information publicly released by the City of Boulder was adequate to reproduce city results. It also used data from Xcel’s 10K’s, their 2011 Electric Resource Plan, and estimates for Xcel’s planned utility scale renewable additions. Other conservative assumptions used were: no cost for carbon, a Debt Service Coverage Ratio (DSCR) of 1.625 (vs the 1.25 required by the Boulder city charter), the same solar and wind costs as those the city settled on in 2013 that are higher than those available today, no tax credits or subsidies for renewables, and Xcel’s required revenues adjusted lower to give Xcel the benefit of any doubt. The analysis makes a distinction between rates and average total cost to customers. Xcel focuses on rates where this analysis (and the City’s) focuses on what customers are actually billed including all costs to a customer such as taxes, fees, and payments in lieu of taxes that are not included in Xcel’s rates. This is important, because rates have been erroneously compared to average costs, which is not an apples-to-apples comparison.
Even with all these conservative assumptions the results still showed lower costs to Boulder customers is even more likely than in the original city results. There are many factors that could improve, making a Boulder Muni much more cost-competitive such as carbon taxes or continued solar and wind tax credits. This is Empower Our Future’s second white paper. Our first white paper, released in 2013, examined Xcel Energy’s profit growth that made switching to a cost competitive municipal utility worth pursuing.
“These findings are sobering and hopeful! Boulder needs to be made aware that we will exceed our fair share of the global carbon budget by 50% just using Xcel’s electricity and that leaves no room for emissions for heating or transportation. This paper charts a course for cutting our emissions while saving money. It is so important that we stay the course.” said Susan Osborne, former Mayor of Boulder.
“This independent modeling project has evolved and been refined over several years. When its results are combined with the predictions of the City’s models, the conclusion is clear: It makes sense to stay on the path to a city-run electric utility that is likely to improve rates, use of renewables, and reliability with lower emissions.” was the reaction of Bill Briggs.
“Boulder must continue to act now for the sake of the planet and future generations,” said Crystal Gray, former Boulder Deputy Mayor. “This paper shows that critical emission cuts are possible without hiking our electric bills. Years ago the city showed 50% renewables is possible, but Xcel seems to have stalled at around 30% even into the distant future. This analysis shows 70% is possible and cost-competitive with Xcel. If Xcel wants to keep Boulder, they must stop fighting us and commit absolutely to not only very high levels of renewable energy, but also lower rates and limit using their coal plants or close them.”