Muni 101: Basics and Background
Author’s note: In November 2020, Boulder voters elected to opt back into a franchise agreement with Xcel Energy. Boulder can resume municipalization in the future it voters or a super-majority of council choose to end the franchise.
Also known as: Municipalization, Local Power
Other Muni 101 stories:
Who’s arguing what?
Xcel, Boulder settlement: What’s in it?
What is it?
Boulder’s attempt to create its own, city-owned electric utility by buying the existing system (power lines and poles, transformers, substations — all the parts it takes to run a utility) from Xcel Energy, a publicly traded utility company based in Minnesota. Energy, the company that currently provides power to Boulder.
Where are we now?
Since Xcel doesn’t want to sell its system, Boulder is attempting to condemn Xcel’s assets in court. The state has signed off; federal regulators have yet to approve a portion of the process. The city is working to produce a final, full estimate of how much it will cost to buy Xcel’s system, which it will present to voters.
Simultaneously, city and Xcel officials negotiated a settlement that would end Boulder’s attempts to condemn Xcel’s assets and form a city utility. Boulder would sign a franchise agreement with Xcel; the city hasn’t been “in franchise” with the company since January 2011.
Should Boulder keep going in its attempts to acquire Xcel’s system or settle with Xcel and re-enter into a franchise agreement with the company?
How (and why) did we get here?
Boulder has long been unhappy with the level of renewables Xcel was providing to the city. The idea of a municipal (city-owned) utility was discussed as early as 2005. Voters in November 2010 decided to end the franchise agreement with Xcel.
Not much changed, practically speaking, when Boulder went out of franchise (they did miss out on undergrounding; see more below). State law requires the company to keep providing electricity outside of a franchise agreement.
Voters have to approve re-entering into a franchise agreement. That’s what’s on the ballot this year: a new, 20-year franchise agreement with Xcel plus a settlement to preserve the work done on municipalization so far and allow Boulder to restart that process in the future.
As of mid-2020, more than $27 million had been spent on the muni. All the work has been to determine if Boulder can legally separate from Xcel and run its own utility — yes, most likely — and how much it will cost, which is still TBD.
If voters don’t approve the settlement and franchise in November, final cost estimates on the muni could be available in 2022, though city staff think later is more likely. If it takes longer, another funding source will be needed to keep the work going: the Utility Occupation Tax expires in 2022.
Xcel, Boulder settlement: What’s in it? Boulder Beat
Pros, cons of settlement weighed Daily Camera
Cost of Transitioning to 100% renewable energy Institute for Energy Research
— Shay Castle, firstname.lastname@example.org, @shayshinecastle
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