Steve Whitaker: Xcel franchise agreement—Negotiate from position of strength

As a previous business owner, over the course of 20 years I had to negotiate several supply agreements. This proposed franchise agreement is a bad deal for Boulder and a great deal for Xcel Energy. Xcel gets the right to charge us likely more than $2 billion and make operating profits of likely more than $400 million over the next 20 years. And they do not even tell us what the rates are going to be. What kind of a deal is that?

Xcel has maneuvered the city into treating it as a sole source supplier, the only bidder. This is a huge negotiating mistake.

The City Council approved putting the franchise agreement on the ballot before receiving other proposals that are just now being evaluated. That makes no business sense. Who solicits proposals and then accepts one without looking at the others?

Additionally, those who might have responded were given only a month to reply to a complex request and were certainly discouraged by knowing that the city may not review their proposals and go directly into franchise. Even so, the city received 10 responses, but we will not get to vote on any of those.

By voting “no” on Ballot Issue 2C, we leave ourselves free to re-issue a request for proposal with substantial time for response. In addition, Xcel will be required to file with the Public Utilities Commission in March a plan covering the next five years that will contain spending plans and expected rates going forward.

So next year, we can have information about Xcel’s plans and several alternative proposals, with financing, to compare before we decide. And in the light of competition, maybe even Xcel will give us a better offer. That is why voting “no” on 2C is a good negotiating strategy.

Steve Whitaker

Published September 28, 2020 in the Boulder Daily Camera

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