EOF Letter to City Council


www.empowerourfuture.org

May 19, 2020

Dear City Council and Staff

Empower Our Future would like to share with you some of our observations and expectations for the discussions with Xcel regarding Boulder’s future electricity supply. Empower Our Future is a coalition of individuals, companies and organizations that are profoundly concerned about the looming climate crisis and are working for more clean energy and more local control for Boulder. There is an abundance of background information on our website at https://empowerourfuture.org/.

Some members in our group have close to 20 years of experience working on these issues in Boulder and around the country. Others are new members of the community who have a deep concern for climate change and building a more democratic and community-controlled energy system.

This letter is our first response to the announcement on Tuesday May 12, 2020 that Boulder Mayor Sam Weaver and Mayor Pro Tem Bob Yates, as well as some City Staff, were in discussions with Xcel about a possible future agreement to enter back into a franchise relationship with Xcel. We expect that we will be in further communication with Council and Staff going forward as we learn more and are able to take more time to analyze the situation, but we wanted to let you know as soon as possible of our concerns and our vision for our community.

While the group is supportive of any effort that can accelerate the rate at which we reduce our state’s carbon emissions and build a more decentralized and democratic electrical system, there is considerable concern in the group that the City of Boulder has gone down this road before and the results, while consuming considerable time and effort, have not been favorable;[1] we fear that the fundamental reasons for these previous unfruitful efforts have not changed.

There are many reasons why we are not inclined to trust Xcel or its ability to deliver an agreement that will meet Boulder’s energy and climate goals. Some of these reasons include:

  • Investors—Xcel is a for-profit monopoly corporation with its first obligation to its shareholders and their profits—not to its customers. There may be some new faces, but the culture is still one that puts shareholders, profits and defending Xcel’s monopoly status as its first priorities.
  • Smart Grid City—Xcel promised the City of Boulder a very “shiny” Smart Grid City project that would cost us nothing. It ended up costing $44 million with ratepayers all over Xcel’s Colorado territory paying $29 million for it—yet today there is essentially nothing to show for it with none of the customer-based functionality that Xcel promised.
  • Comanche 3 Coal Plant—Xcel persisted in building a new, approximately billion dollar coal plant in Colorado that it expected to operate until 2070 with no apparent understanding of the changing energy landscape or the need to radically reduce our carbon emissions.
  • Legal Delays in Boulder’s Efforts to Address Climate Change—Boulder is the home of literally dozens of climate scientists and thousands of citizens who recognize the dire nature of the climate crisis and who have been trying for close to 20 years to address the largest source of greenhouse gas emissions in our community, which is the carbon intensity of our electricity. If Xcel really wanted to partner with us in addressing this defining issue of our times, it has had more than enough time to demonstrate that it understands the seriousness of the climate crisis and to constructively help Boulder achieve its climate and energy goals. Instead, Xcel has used a plethora of legal stalling tactics to slow Boulder down.
  • Stranded Fossil Fuel Assets—Despite the clear signs that fossil fuels were not the correct choice for a 21st century electrical system, Xcel has continued to spend large amounts of money on coal and natural gas generation and infrastructure, leading its customers into a deep hole that at this point very likely represents over $1.5 billion in stranded assets. Boulder citizens are not likely to want to inherit these fossil fuel mistakes.
  • Failure to Optimize Cost-Effective Renewable Generation—Xcel received over 50,000 MW of low-cost, wind, solar and storage projects in late 2017. While it is moving about 2,000 MW of those projects forward, it has left over 90% of these carbon-reducing projects “on the table,” while the coal and natural gas plants continue to drive us into what is increasingly being called a climate apocalypse. The COVID-19 virus has shown us what happens when we don’t listen to the scientists; it is unconscionable that Xcel’s Colorado generation is still approximately 70% fossil fuel driven when we’ve known since at least 2009 that Colorado had abundant wind and solar projects ready to go that would decrease Xcel’s system costs.
  • Large Expenditures and Debt Without Representation—Just as it isn’t wise to marry someone who runs up large credit card debts, so it is with Xcel. We are already on the hook for billions of dollars in debt and equity—a lot of it for fossil fuel infrastructure. Moreover, Xcel has told its investors it intends to make over $7.5 billion in capital expenditures in Colorado in the next five years. If Boulder goes back into franchise with Xcel, we would be responsible for our share of this massive debt and equity, with essentially no say on how much Xcel spends or what it spends it on.
  • Determination to Raise Rates Repeatedly—Xcel has had a rate increase almost every year since 2006 and it has announced plans to continue to raise our rates going forward—no matter how low prices for renewable energy and storage go. Xcel spent most of 2019 pursuing yet another rate increase in Colorado and it has stated it intends to file another rate increase application in 2020. With its monopoly spending habits undisciplined by market forces, Xcel expects its captive customers to continue to pay for its large capital expenditures and large and growing profits.
  • Constraints of the PUC—Xcel is often constrained by what the Public Utilities Commission (“PUC”) will or won’t let them do—or by its unwillingness to honestly ask the PUC for approval for innovative projects and relationships. As long as this is the case, there is a strong likelihood that Xcel will be unable to deliver quantitative and enforceable provisions in any agreement with Boulder.

The list could go on, but as you can see, there are more than a few reasons why we question whether the time spent in discussions with Xcel will lead to a fruitful outcome.

Empower Our Future has long been interested in the broad array of energy, financing and technological opportunities that are arising in the 21st century and we believe that any agreement with Xcel should reflect those opportunities and ensure that Boulder can take advantage of new innovations as they arise.

The attributes we will be looking for in any agreement with Xcel include the items listed below–policies that we would be advocating for if we had a locally-controlled electric utility. Whether Boulder municipalizes or not, it is clear from the experience of other communities that there are providers that stand ready and willing to help communities achieve goals like those below.

If you find yourself saying “These won’t happen with an Xcel-Boulder agreement” when you read this list, then it is probably time to question whether Xcel is the best partner for Boulder.

Elements We Will Be Looking For in Any Agreement with Xcel

Decarbonization

  • Xcel’s Colorado generation is coal-free by 2025 or sooner.
  • Minimize the use of natural gas, using wind, solar, storage and demand management, response and flexibility options whenever possible
  • No more than 50% of the remaining depreciation on fossil fuel plants charged to ratepayers
  • Xcel shows good faith by becoming a “B-Corp”

Decentralization

  • Recognize the economic, environmental and resilience benefits of distributed resources
  • Help Boulder maximize the use of microgrids and “transactive” energy policies in the City
  • Develop “building to grid” projects that allow two-way communication and load shifting
  • Develop “vehicle to grid” projects that allow two-way communication on battery charging and discharging
  • Agree to support the development of Community Choice Energy policies in Colorado

Democratization

  • Include Boulder citizens directly in the agreement negotiation process, including communities of color and low-income and otherwise marginalized populations as they will likely be most impacted by rising rates and the climate crisis
  • Hold listening sessions in Boulder at least twice a year to learn what is and isn’t working
  • Include citizens in all aspects of Xcel’s resource, distribution, transmission and capital expenditure planning
  • Provide $1 million per year to cover expenses for Boulder to participate at the PUC

Rates

  • Agreement not to raise rates for 10 years due to the low cost of wind, solar, storage and demand side options, filing rate adjustments only as needed to reflect declining costs of renewable generation
  • Move to rate structures that maximize reliance on renewable energy (e.g. “Time of Renewables”)
  • Sell excess renewable generation at a low cost to retail customers first, prior to exporting to other utilities through a balancing authority.
  • Review capital spending plans with Boulder and other communities before moving forward; establish a referral and veto mechanism for Boulder and other communities
  • Procure all resources competitively
  • Allow utility ownership of resources only where it can be demonstrated that the market cannot or will not supply needed resources of equal or better value to ratepayers.

Renewables

  • Agree to a goal of 100% carbon-free electricity (or as close as possible) by 2030, doing everything possible to reach the goal while, of course, recognizing any real reliability constraints that arise.
  • Eliminate the 120% rule for solar capacity; allow excess solar generation to be donated to local low-income and non-profits or otherwise shared with the community.
  • Remove limits on Community Solar Gardens
  • Agree not to obstruct solar or solar plus storage installations

Reliability and Resiliency

  • Penalties for failure to provide reliability at least as good as Longmont achieves with a goal of matching the reliability of the municipal utility in Fort Collins
  • Recognize the risks of the “Big Grid” during extreme weather events
  • Recognize the value of distributed resources for resiliency
  • Support Boulder’s efforts to develop a community-controlled broadband system (e.g. through joint trenching and use of poles and substations etc)

Finally, any agreement should be quantifiable and enforceable and have a sunset clause not to exceed five years; if there is not an affirmative vote of the residents of Boulder to continue with Xcel, then Boulder should revert to an out-of-franchise status with clear rights to proceed with a community-controlled electric system. In that case, Xcel should agree to:

  • Not oppose municipalization or other community-controlled system in any way
  • Sell Boulder the distribution system assets at their depreciated book value
  • Allow joint use of poles and substations
  • Boulder serving the enclaves in the City without annexation
  • Boulder’s legal expenses reimbursed
  • No stranded asset or going concern claims
  • While we recognize that this is an extensive list, it is still not exhaustive. It is likely that we will be adding to this list as we move forward, but we wanted to make sure that Council and Staff understood what it is we are looking for in any agreement with Xcel as the discussions proceed.

We recognize that creating a 21st century electric system that meets the goals above is not easy, but then important things often take time and considerable effort.

Thank you for your efforts to bring Boulder an electrical system worthy of our community!

Sincerely, 

Marguerite Behringer

Bill Briggs

Alison Burchell

Duncan Campbell

Paul Culnan

Karen Conduff

Regina Cowles

KK DuVivier

Barbara Engel

Barbara Farhar, PhD

Evan Freirich

Duncan Gilchrist

Jock Gilchrist

Leslie Glustrom

Merrill Glustrom

Crystal Gray

Nicole Hensel

Brian Highland

Kian Highland

Mary Jo Highland

Chris Hoffman

Jeremy Kaplan, MD

Nick Kerwin

Eric Lombardi

Emma Marion

Conor May

Leroy Moore

Bob Morehouse

Carolyn Orlando, PhD

Susan Osborne

Micah Parkin

Mary Pettigrew

Steve Pomerance

Ken Regelson

Devon Reynolds

Clare Shemeta

Bill VanEimeren, MD

Bob Westby

Steve Whitaker

Julie Zahniser

350 Boulder County

Clean Energy Action

New Era



For the Empower Our Future Team

Additional likely signers could not be reached on short notice.

[1] Summaries of previous efforts by the City of Boulder to find agreement with Xcel can be found at

https://bouldercolorado.gov/local-power/working-with-xcel-energy