In response to his LTE to the Daily Camera 9/27/2020
(EOF/No on 2C responses are inserted in blue)
Reasons to vote ‘yes’ on 2C and 2D
I remember the early days of the debate around municipal power in Boulder. It was more than a decade ago and the massive impacts of climate change were becoming clear to anyone who was paying attention. Xcel Energy was not responsive to Boulder’s concerns and was stubbornly addicted to coal generation.
Many in Boulder had had enough. They pushed City Council to decline a new franchise agreement with Xcel and pursue a municipal energy alternative. In 2011 the voters approved ballot measures 2B/2C which authorized spending millions to separate from Xcel.
It was a noble cause and I admired the passion of the municipalization supporters. They confidently predicted we would have a city-owned utility by 2017 or even sooner. (This was a City Staff prediction (particularly Heather Bailey), not a citizen prediction.) Clean and affordable energy under local control was near at hand.
Unfortunately, it didn’t turn out that way. The court battles were numerous, fierce and expensive. (Xcel has used their “bottomless” legal pockets (all paid by their customers) to litigate every step that Boulder has taken.) Boulder lost more than we have won. 2017 came and went with no municipal utility. In fact, we have spent over $25 million on litigation and we are no closer to local control than we were 10 years ago.
(Expenditures have been on engineering as well as legal. It has been on average about $2-3 million a year and for most households that is usually less than $3/month. Look at the Boulder Occupation Tax on your Xcel bill. About one-third of that has been used to find a way to move beyond Xcel’s monopoly and have a non-profit, low-carbon, locally-controlled utility with lower cost power—and to do our part to address the climate crisis. For most households, this is less than a latte per month to help address the defining issue of our time and Boulder voters have repeatedly supported this effort.)
And now the global pandemic and its huge impact on city revenues have made continuing the fight difficult if not impossible.
(This is not true. The City has enough financing left from the Occupation Tax to get through 2021 and likely 2022. In addition, the City has received offers to help finance the last stages of the municipalization effort and get started with a municipal electric utility. The summary of those offers can be found here. In addition, the low municipal bond prices in 2020 make a municipalization effort look even better than before financially.)
However, despite the huge cost and lack of progress, the quest for local power has not been in vain. Xcel is weary of the endless court battles and they are eager to move on. Plus, their new leaders are committed to switching from carbon and are aggressively pursuing renewable energy. Without a doubt, the company’s battles with Boulder played a role in this transformation.
(Yes, it is hard to get the attention of a monopoly because you can’t take your business elsewhere. Keeping that leverage is important as Xcel is still moving much too slowly and at much too high of a cost to a low-carbon 21st century utility system.)
Kudos to Mayor Sam Weaver and Mayor Pro Tem Bob Yates for stepping up and negotiating a tough and fair agreement that accomplishes Boulder’s goals without wasting additional public funds and years of time. The proposed settlement they have negotiated with Xcel is not a loss but a victory for Boulder and for the planet.
(The settlement does not achieve much beyond the statewide mandated 80% reduction in carbon emissions.That comes from state law, not the settlement. The other provisions are not very strong and most of them either don’t come with a commitment from Xcel or will be difficult to enforce. A May 2020 letter describing the provisions that local power and climate activists think should be in any deal with Xcel can be found here.)
Why? First of all, Xcel is committing to reducing system-wide greenhouse gas emissions by 80 percent from 2005 levels by 2030.
(The 80% carbon reduction is required by Colorado law—it was not a result of the Boulder negotiations. Importantly, the 80% reduction in carbon emissions is NOT the same as 80% renewable electricity. Xcel’s Colorado President, Alice Jackson said it “could be as much as 70% renewable electricity.” In addition, Xcel does not account for upstream releases of methane (and other gases like benzene) from its use of natural gas. This means that it is not fully accounting for the climate (and health) impact of its electric generation.)
In addition, they will partner with Boulder to make our local energy 100% renewable by the same year.
(This is not true. There is nothing in the agreements that assures Boulder that they will have 100% renewable electricity by 2030. Xcel has agreed to “partner” with Boulder, but that is not well defined and highly unlikely to get Boulder to 100% renewable electricity at a reasonable price by 2030.
Some of the potential joint projects include battery storage systems, solar gardens and distributed generation.
(It is very likely that Boulder will have to pay for these projects—on top of paying Xcel’s monopoly prices for electricity that is much dirtier than it needs to be.)
If the company fails to meet interim goals on carbon reduction over the next decade, Boulder has three opportunities to opt out of the agreement in 2022, 2024 and 2027. Additionally, the city has the option to tear up the settlement in 2025 or 2030 for no reason if we choose to.
(While these “opt-outs” exist in the franchise, Xcel could take legal action to make exercising these opt-outs protracted and expensive—just as they have done with Boulder’s right to form a municipal electric utility which was both recognized in our previous franchise with Xcel and in the Colorado Constitution.)
So while it is technically a 20-year franchise agreement, it is actually a series of shortterm deals that hold Xcel’s feet to the fire in terms of their commitment to climate change. If they do not deliver, we can bail on the agreement and resume the effort toward municipalization.
(Generally speaking, people who don’t have much experience with Xcel believe in these “opt-outs.” Those that have considerable experience with Xcel don’t believe the opt-outs will work. They have seen too often how Xcel can use its legal power to thwart any threat to its monopoly.)
In addition, the company has agreed to spend $33 million to bury overhead wires with half of that investment occurring in the next five years. This will do more than improve the view in our backyards. It will save many of us from losing power every time there is a big snowstorm.
(Boulder has been paying rates that should cover the costs of undergrounding for the last ten years. There is a strong argument that Xcel is just (finally) doing what it should have been doing all along instead of withholding the undergrounding money from Boulder.)
One more benefit of this agreement is that it frees up Boulder to pursue another important community priority. Without the $300 to $400 million cost of starting a utility, the City’s bonding capacity can be used to finance a community-wide broadband network. Longmont has enjoyed a similar high-speed network for years and Boulder is long overdue to provide fast, reliable and affordable connectivity to residents.
(This is an argument from Boulder Council person Bob Yates, but it is not clear that there is evidence to support this contention. What is likely true is that it will be harder to have a community-owned and controlled broadband system like Longmont’s if Boulder doesn’t own its own electrical system as Longmont (which is already a “muni”) does.)
So for all of these reasons, I’m voting yes on ballot measure 2C which is to accept the settlement negotiated by the city with Xcel Energy.
(Doing so will foreclose Boulder’s ability to get to much higher levels of renewable electricity and do so at a lower cost than Xcel. This is unfortunate for all Boulder residents and businesses. Monopolies aren’t known for driving innovation or for providing the lowest prices.)
I will also vote yes on 2D to extend the Utility Occupation Tax until 2025 and invest the funds in meeting our clean energy goals and providing energy assistance to low income residents.
(This is the first indication of the costs of staying with Xcel—it will take a lot of money to try to get Boulder to 100% renewable electricity if we stay with Xcel. In contrast, there are providers ready to bring us 100% renewable electricity by 2030 at costs lower than Xcel’s. See the City of Boulder 2018 RFIP and the 2020 RFP results here.)
It has been a long battle with Xcel and it has not turned out the way many predicted back in 2010. Given the favorable and fair terms of this proposal and the other pressing needs we now face in 2020, it is time to move on. Vote yes on 2C and 2D.
(Voting Yes will prevent Boulder from pursuing the other offers we’ve gotten and won’t allow us to do a full “comparison shopping” exercise. This would be very unfortunate from a climate point of view because we’d be using much higher carbon electricity than we need to and from an economic point of view we’d be paying a lot more than we need to. Voting “Yes on 2C” would be bad for the planet and for Boulder residents and businesses.)
Sean Maher is the CEO of RRC Associates in Boulder. You can email him at email@example.com.