Paul Culnan: Xcel Settlement Financial Analysis?Published on: Thursday, July 30, 2020
July 30, 2020
Hello City Council,
Municipalization is most often argued against as a waste of money, but the Xcel Settlement could turn out to be the most expensive path we could take to reach Boulder’s climate goals.
I am very concerned that the Xcel Settlement presentation and discussion at the 7/28 council meeting did not touch on future costs to the city to attain the city’s climate goals. There was just a mention of cost sharing and extending the UOT, but no dollar estimate of what it would take. If the city has done this analysis, that cost over the next 10 or 20 years should be revealed.
If the city has not done the cost analysis, which in this rushed this time frame is what I suspect, then let me refer you to the recent Denver Climate Action Task Force’s five month long analysis of what it will cost that city, under their agreement with Xcel, to reach their climate goals which are similar to Boulder’s.
The recommended path forward for Denver would cost $3.4 billion over the next decade! Boulder is about 1/6 the size of Denver (4% vs 25% of Xcel’s sales), so that is the equivalent in Boulder dollars of over $50 million per year for the next 10 years. Among other funding sources, Denver is considering a 0.25% sales tax to help pay for the climate initiatives. There is also a citizens’ initiative to put a tax on electricity and natural gas sales. The task force suggested that if the new taxes were not approved by voters then Denver should double the franchise fee to 6% when the franchise is renewed in 2026.
Of course Boulder is not Denver, and our solution to the climate emergency will be different, but this financial analysis must be done before putting a measure on the ballot that could turn out to be the most expensive of all possible paths to reach Boulder’s climate emergency goals.
Please consider Boulder’s finances over the next decade as you approach next Tuesday’s discussion. What is the long term cost of the Xcel Settlement? What is the long term cost of staying out of franchise and keeping competition alive? What is the long term cost of continuing the muni exploration? Until you have a financial analysis of the options you cannot make an informed decision.
Here is a recent news article summarizing the key points of Denver’s Climate Action Task Force plan:
Link to full Denver Climate Action Task Force report.
Boulder CO 80305