Boulder to date has spent $20 million toward its effort to take over Xcel Energy’s system in the city and create a municipal-owned, renewable-powered utility. That’s according to a year-end report released recently on expenditures for the municipalization process, known in shorthand as the muni.
Negotiations are still ongoing as to what, exactly, Boulder will be buying from Xcel — and how much it will cost. State regulators in September 2017 mandated a list of agreements for the two sides to work out before the separation could be approved, a decision that followed two failed application attempts from Boulder.
Xcel and Boulder were initially given 90 days to reach the agreements, but after four extensions and 17 months, the parties are still haggling.
It’s the list of assets that is holding things up. A list was filed to the Colorado Public Utilities Commission on Oct. 26, but a dispute has since arisen over what should be included.
“We’re trying to figure out what it is they don’t agree with and what needs to be fixed, if anything,” said Kathy Haddock, senior assistant city attorney.
Haddock said that Boulder is “only asking” for a “portion” of Xcel’s property that is needed to distribute electricity, indicating that the list might include non-essential assets. An Xcel spokesperson also confirmed the dispute but did not elaborate on the details.
There is not deadline for Boulder and Xcel to agree on assets. At the request of both parties, the PUC is taking a timeout: “On Feb. 8, the PUC granted a request by Boulder and Xcel indefinitely staying all pending matters in the proceeding,” PUC spokesperson Terry Bote said via email.
Despite the joint request for a stay, Haddock seemed to suggest that the city was somewhat perturbed by the lack of urgency on behalf of Xcel and the PUC.
“We thought it was done in October,” she said. “That was late from what we were thinking,” given that agreements were supposed to have been reached by the start of 2018.
When asked about a timeline, Xcel spokesperson Michelle Aguayo said that a hard deadline was “a city thing more than it is an Xcel Energy thing.”
“The city has its objectives; our focus is on making sure (the separation) doesn’t negatively impact our remaining customers,” she said. “From our standpoint, we’re continuing the work as it needs to be done.”
The discussion over assets is separate from the one over the purchase price, Haddock and Xcel confirmed— the stickiest subject and, both sides have said previously, the one that will likely send the matter to court. Boulder’s council in December re-authorized the city to file the lawsuit, but Haddock said there is no timeline for that while negotiations continue.
“As long as we’re having good-faith negotiations with Xcel, we don’t need to file condemnation,” Haddock said.
A successful negotiation or a court ruling is needed for Boulderites to know just how much they’ll have to pay for their own electric system. City officials have in recent months declined to provide estimates for what Xcel might demand, but voters have approved up to $214 million.
The city so far has spent $20.3 million to reach this point in negotiations, according to an information packet recently released by the city.
The report was short on details, simply breaking the spending down into two main categories: $10,692,038 for “operating” expenses and $5,298,896 for “personnel.” Boulder is on the hook for all Xcel’s costs related to separation, including paying employees and lawyers for negotiations.
Boulder’s staff contributions have totaled $4,023,932 since 2012. In 2018, 32 staff members dedicated at least a portion of their time to the muni effort.
Half the spending has occurred in the past three years; as the Daily Camera reported in March 2016, muni spending totaled $10.4 million at that time.
The bulk of all the money spent on muni has come from the utility occupation tax, which raised $17,880,311 between 2012 and 2018. The city manager’s contingency fund kicked in $613,876 along the way, and other unspecified one one-time funds of $1,545,480 were used as well.
Community support for the effort has dwindled over time, but remained strong enough in 2017 to pass an extension of the utility occupation tax, which passed by just over 1,000 votes.
Voters will have to weigh in once again on moving forward, once it’s known what the total cost will be to separate from Xcel and build and design the city’s own system. Staff hopes to have that information by early 2020, in time for a vote that November. Others, including some council members, have cast doubt on that timing, given that court proceedings for condemnation could stretch over years.
Leslie Glustrom, the city’s staunchest defender when it comes to municipalization, said even she will need to know the final numbers before committing herself fully to a Boulder utility: “I’m not an advocate for the muni,” she said, “I’m an advocate for muni exploration.”
What Glustrom and others have continued to believe is that Boulder can introduce more renewables more quickly into the grid than Xcel. Even with the company’s recently announced goal to eliminate carbon emissions by 2050, 73% of Xcel’s energy in Colorado still comes from fossil fuels.
“With great respect to the progress they’ve made, with deepest respect and gratitude for that, we can do better,” she said.
To that end, Glustrom shows up every two weeks at Boulder city council meetings, power point presentation in hand, to encourage and extol the virtues of the muni process so far. Joining her at nearly every meeting is Patrick Murphy, in many ways the face of the anti-muni camp, with his own presentation. (Most recently, it’s taken a Christmas-y direction: The Muni Naughty List.)
Murphy also thinks Boulder can do better; he just thinks the muni is the wrong way to go about it. The $20 million spent so far could have been put to better use by funding solar projects or other city-led efforts to reduce greenhouse gases.
“We could put (that) into incentives and make great progress in reducing our carbon footprint,” Murphy said. “We’re already way behind the curve.”
Roughly half of Boulder’s emissions are attributable to electricity, according to the city. Earlier this year, Boulder announced it had reduced emissions by 16 percent from 2005 levels by the end of 2017, three years earlier than expected. But more money will be needed to reach the target of 80 percent reductions by 2050, staff said in an early February information packet: between $4-5 million each year.
However, that figure is based on the expectation that Boulder will have its own operational utility by 2024.
Boulder in mid-February launched a survey to gauge community support for other climate initiatives; results were expected Friday. Council members will be meeting in pairs with chief sustainability officer Kendra Tupper over coming months, according to the information packet. (No more than two elected officials can be involved in discussions, or else the meeting must be open to the public.)
As is perhaps to be expected, Murphy and Glustrom both have different takes on the $20 million that has gone toward the muni so far. Murphy points to how the total breaks down in daily spending: $9,273 each day for the past six years (2012-2018). While that sounds like a lot, Glustrom said, it “equates to a latte or two a month for most families.”
— Shay Castle, firstname.lastname@example.org, @shayshinecastle
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