Takahashi: BoulderXcel – The Road Less Traveled


To Boulder City Council
August 14, 2020

In the face of the most dangerous challenges of our time – climate change, terrorism, poverty, and trafficking of drugs, guns, and people – the nations of the world seem paralyzed. The problems are too big, too interdependent, too divisive for the nation-state. Is the nation-state, once democracy’s best hope, today democratically dysfunctional? Obsolete? The answer, says Benjamin Barber in If Mayors Ruled the World, is yes. Cities and the mayors who run them can do and are doing a better job. Barber cites the unique qualities cities worldwide share: pragmatism, civic trust, participation, indifference to borders and sovereignty, and a democratic penchant for networking, creativity, innovation, and cooperation. He demonstrates how city mayors, singly and jointly, are responding to transnational problems more effectively than nation-states mired in ideological infighting and sovereign rivalries. Featuring profiles of a dozen mayors around the world – courageous, eccentric, or both at once – If Mayors Ruled the World presents a compelling new vision of governance for the coming century. Barber makes a persuasive case that the city is democracy’s best hope in a globalizing world, and great mayors are already proving that this is so.

Municipalized Cities have a more natural path to 100% renewable.  Of the six communities (from Burlington, Vermont, to Kodiak, Alaska) to reach the 100-percent renewable electricity target, five of them, including Aspen, are municipal utilities. The sixth is a rural electric cooperative.  It isn’t surprising that municipal utilities have taken the lead, said Elizabeth Doris, manager of NREL’s state and local policy and technical assistance project. “Municipal utilities own the resources. They are used to making tactical decisions.” Public ownership gives Longmont and Fort Collins, two of the 10 Colorado communities that have taken the 100-percent pledge, the best chances of meeting the goal, Doris said. Boulder and Pueblo, which are considering municipal utilities, also hope to be powered by all renewable energy.

There are 29 Municipally Owned Utilities in Colorado: Boulder and Pueblo would make this 31.  The 29 are Aspen, Burlington, Center, Colorado Springs, Delta, Estes Park, Fleming, Fort Collins, Fort Morgan, Fountain, Frederick, Glenwood Springs, Granada, Gunnison, Haxtun, Holly, Holyoke, Julesburg, La Junta, Lamar, Las Animas, Longmont, Loveland, Lyons, Oak Creek, Springfield, Trinidad, Wray, and Yuma.  Please note our neighbors Estes Park, Fort Collins, Fort Morgan, Frederick, Longmont, Loveland, and Lyons

Out in the world, we have the City of Los Angeles, whose municipally-owned Los Angeles Department of Water and Power has serviced Los Angeles since 1905 while its Gas Franchise is with an Investor-owned utility (the franchise owns Aliso Canyon).  We have San Francisco making a bid to buy its utility from a bankrupted Pacific Gas and Electric.  We have our neighbor Platte River Power Authority pledging 100% carbon-free energy by 2030.  We have our neighbor Colorado Springs, who has announced the retirement of its two coal plants by 2030: leaving Xcel Energy as the remaining coal operator in Colorado.  In short, the utility world is being disrupted and quite rapidly.  And municipalities are able to lead the way.

But maybe I need to bring this even closer to the ground.  How about the 118 municipally owned electric utilities and 53 gas utilities are operating in the state of Kansas.  If you have 15 minutes, please watch plain folks speak about how local control is going in Kansas since 1903.  They talk about the core of the community, can do ingenuity, funding community projects, a handle on their destiny, local control, the cornerstone of a community, businesses attracted by reasonable rates, competitive services, reinvestment in the community, revenue remains in the community, customer service is personal, citizen ownership, safety, and reliability, pride in the high level of service, service response in widespread disasters, economic stability, peace of mind for business owners, minimal lost hours, general fund revenue sharing, personal customer service, local intergenerational jobs, income are spent locally and support schools enrollment and church membership, vocations provide purpose, increased community pride, and service over profit.

Imagine if Boulder’s community focus looked like this:

The Kansas Municipal Utilities (KMU) organization helps coordinate activities in the state.  I think the KMU states the potential advantages of municipal ownership better than most .  Here are the benefits of Municipal Utilities they publish (the word cloud comes from this italicized text):

Kansas is home to municipal utilities of all shapes and sizes. There are 118 municipal electric utilities, 53 municipal gas utilities, and hundreds of municipal water and wastewater systems across the state. Kansas has more municipal utilities than nearly any other state. Kansas Municipal Utilities (KMU) represents 185 of these cities and communities that have decided that municipal utilities are the best choice for providing electricity, natural gas, water, sewer, and telecommunications needs.

Kansas has a long history of municipal utility operations. When private businesses would not or could not serve the utility needs of its citizens, city governments stepped up to provide essential utility needs – electric, gas, water, wastewater, stormwater, and telecommunication services. These community-owned utilities are municipal by choice.

The benefits of municipal utility ownership are many. From small, rural towns to large metropolitan cities, municipal utilities are the culmination of that particular American ideal of local people working together to meet local needs.

Community Ownership

A municipal utility is owned by the city it serves. It exists to provide a public service to the citizens, businesses, and industries of the community. Service, not profit, is the utility’s mission.

Long-Term Community Goals

The emphasis on municipal utilities is helping to achieve the long-term goals of the community. The primary mission of providing the least-cost and most reliable service over maximizing profit ensures that these goals are always in sight.

Local Control

Because of local control, Kansas cities with municipal utilities determine how utility services are provided within their community. This includes the design and aesthetics of electric distribution systems, natural gas infrastructure, water treatment plants and water towers, and wastewater treatment plants. Local control means matching local resources to local needs and offering special programs (energy efficiency & conservation, economic development incentives, etc.) to benefit citizens.

Local Regulation

For municipal utilities, rates and services are governed by the city itself. Utilities are commonly governed by either a city council or city commission or an appointed or elected utility board. The utility is governed by residents of the community who are customers of the utility and are thoroughly familiar with its operations and services.

Local Presence

Municipal utilities are located in the community and are readily available to customers. If a customer has a complaint, he or she doesn’t have to take it to a state agency in Topeka or corporate headquarters in another city. The customer can discuss the problem locally, with another member of the community, and be assured that the problem will be addressed.

Reliability

With electric, gas, water & sewer crews located within the community, citizens benefit from a quick and effective local response to emergency situations and outages.

The Public Interest

A municipal utility is operated in the public interest, for the benefit of the residents of the city. They are not operated for the benefit of stockholders who may live hundreds of miles away and have little interest in the community. With private utility ownership, there is often conflict between the interests of customers and the interests of the stockholders. This disparity of interests has given rise to a complex system of regulation of private utilities that is unnecessary when the utility is publicly owned and operated for the benefit of the community it serves.

Keeping Dollars in the Community

There are numerous ways that a municipal utility helps to maintain and improve a sound local economy:

  • Municipal utilities make significant contributions and payments-in-lieu-of-taxes to the city. These payments are similar, and often much greater to the tax payments that would be made by a private utility.
  • Local ownership means that customers’ utility dollars stay in the community, creating jobs, and supporting the local economy.
  • Local employment
  • Municipal utilities serve as an engine for economic development. Local flexibility, reliability, and quality service offered by municipal utilities are a major advantage for the community in attracting and retaining commercial and industrial customers.
  • Access to tax-exempt financing for capital projects
  • On average, municipal utility rates are competitive with those of other utilities. Competitive rates mean that more dollars are available to spend on other goods and services, boosting the local economy.

Community Values

Decisions about the operation of a municipal utility are made locally, by members of the community, at open, public meetings. Because all decisions are made locally, a municipal utility is uniquely able to respond to the community’s needs, build on the community’s strengths, and reflect and advance the community’s values.

Integrated Utility Systems

In most cases, municipal utilities are integrated across many services. The electric or gas utility may work with the city’s water, sewer, garbage, cable, or telecommunication systems. The efficiency of local governments are enhanced through the sharing of personnel, equipment, and supplies across numerous utilities and city departments.

Private Utility “Yardstick”

Municipal utilities are a strong competitive force that provides a “yardstick” for consumers and regulators to measure the performance and rates of private utilities. This continuous competitive standard benefits not only the customers of municipal utilities but all utility customers across Kansas.

If the problem we are trying to solve is stepping back from the climate precipice, I am thinking that local control, harnessing the collective intelligence of Boulder, and using revenues to fund democratized undergrounding, community broadband, community energy efficiency while providing purposeful community job growth and community benefit is not something to pass on lightly?  I am pretty partial to access to tax-exempt financing!

The road less traveled leads us locally.  The game is changing as it must.  May we choose wisely.  Let us act as democracy’s best hope?

David Takahashi
Boulder