Steve Pomerance: Xcel contributing to campaigning for the Franchise

August 5, 2020

To the Council:
I read in today’s Daily Camera article that City Attorney Tom Carr stated that under the Franchise Agreement, Xcel cannot give contributions in the November election. See below for the section of the Camera story.

This was in response to Mark Wallach’s very reasonable request that Xcel not contribute to campaigning.

For Xcel, putting Boulder back under franchise is worth big money, and will undercut citizen efforts across the state to create an alternative to Xcel’s monopoly utility, with its exorbitant returns on invested equity.

So Xcel is motivated (and can afford) to spend essentially unlimited funds to get this franchise approved.

I just reviewed the Franchise Agreement (yet again), and could find nothing remotely like a prohibition on Xcel making campaign contributions. But I suppose that I might have missed it.

Also, since the Franchise Agreement will not be in effect until after the election (assuming it passes then), I don’t see how anything in it could limit Xcel’s behavior before this election, even if such a limitation were in there.

Could you ask the City Attorney to please identify the clause where this limitation exists, and provide the document that contains it, if it is not in the Franchise Agreement?

And could he describe how it could have any legal effect before the Franchise is approved? And the same if it’s in another document that is tied to the Franchise Agreement?

And finally, assuming that there really is a limitation and it is effective for this election, what happens if Xcel violates this limitation and spends a bunch of money, either directly or through surrogates? Is the Franchise then void? Or what?

Steve Pomerance

P.S. With regard to the cost of a special election, Xcel has agreed to cover the incremental costs of this election, see below. Again, there is the issue of what happens if Xcel loses and there is no Franchise Agreement in effect.

Given the enormous benefit to them in getting the Franchise approved, they might go along with paying the additional costs of a special election, and/or committing to pay even if they lose.

And even if Xcel doesn’t, it would be really dumb to put a half baked proposal on the ballot for November when the costs of not doing this right will be in the many millions of dollars. IMO doing this right far outweighs the relatively small savings of getting it on in November.

And as to who votes in special elections, well, if people care about the issue, they will vote. After all, with mail voting, it’s not really any work. And it won’t be buried by the November national elections.

From the Camera story this AM —

Council member Mark Wallach asked City Attorney Tom Carr about stipulations in the agreement to prevent Xcel from campaigning during the November election or in future elections where an opt out is on the ballot.

“A number of community members have expressed concerns about Xcel’s participation in this referendum and future referendums. I would like to see them keep their hands out of our election,” Wallach said.

Carr said there is currently a requirement in the franchise agreement that Xcel can’t give contributions in the November election and that he would discuss more stipulations to prevent Xcel’s campaigning in future elections.

Wallach also asked about whether city leaders had enough time to review the agreement before the November election and raised the possibility of a special election instead.

But that would raise questions about the difference in people who vote in a general election compared to a special election, Carr said, as well as a question of who would pay for the special election, and whether Xcel would be willing to foot the bill.

From the Franchise Agreement:
21.18 Payment of Expenses Incurred by City in Relation to Franchise Agreement. The Company shall pay for expenses reasonably incurred by the City for the adoption of this Franchise, limited to the incremental cost of the franchise election, publication of notices, publication of ordinances, and photocopying of documents and other similar expenses.

21.19 Costs of Compliance with Franchise. The parties acknowledge that PUC rules, regulations and final decisions may require that costs of complying with certain provisions of this Franchise be borne by customers of the Company who are located within the City.

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