4 Nov 2011

Boulder, Colorado faces more hurdles trying to ‘divorce’ Xcel Energy; real negotiations now begin

Written by Jim Pierobon

It’s hardly a done ‘deal’ but a band of citizens in Boulder, Colorado have taken the biggest step toward dismissing Xcel Energy as the city’s electricity utility. The main reasons is a yearning to garner more power from renewable sources and reduce carbon emissions more quickly. But a bungled smart grid experiment two years ago certainly did not help Xcel’s reputation.

"Boulder Light & Power" is still years away but the biggest hurdle is behind its backers. CREDIT: RenewablesYES.org

The real meaning in the months ahead is this: Xcel now must earnestly negotiate if it wants save the franchise. Losing the the Nov. 1 referendum severely weakened its hand, despite outspending its customers by a more than 10 to 1 margin.

To prevail in the end, Xcel most certainly will need to make concessions that will put Boulder on a credible path to generate 40% of its electricity from renewables (up from about 12% currently). In the process, it will need to engineer system changes that will not compromise electric reliability. And that includes an energy storage capability to manage the intermittency of power from wind and solar sources.

“I think they need to think through how much they are willing to fight,” said Ken Regelson, a lead organizer for Citizens for Boulder’s Clean Energy Future, told the TheEnergyFix. He acknowledged that could include suspending popular rebate programs.

Ken Regelson led the campaign against Xcel Energy's electricity franchise in Boulder, CO. CREDIT: Ken Regelson

Click on the audio icon below to hear EnergyFix Founder Jim Pierobon’s 15-minute interview with Ken Regelson Nov. 2, 2011. In it Regelson explains how the anti-Xcel movement began and then stood up to the utility’s $1million+ campaign to defend its franchise. Listen here to TheEnergyFix Founder Jim Pierobon’s 15-minute interview with Ken Regelson Nov., 2, 2011 and how the anti-Xcel movement started and stood up to the utility’s $1 million-plus campaign to defend its franchise

Regelson said he and his colleagues carefully studied how previous efforts to “municipalize” an electricity franchise fared, including campaigns in Winter Park, Florida and Puget Sound / Jefferson County in Washington state.

Tuesday’s main vote was a close one not but close enough to trigger a recount. It looks to officially pass with about 51.8 percent of the vote and approximately a 930 vote margin out of the roughly 82,000 votes cast on Election Day, Tuesday. That vote assumes a city-owned electric utility can sell power at prices comparable to Xcel’s.

A second vote, authorizing the city to raise taxes $15 per household to pay for legal fees and other expenses, also looks to pass. A razor-thin margin of 141 votes, or 50.3 percent of the vote, existed on Wednesday morning, Nov 2. Still to be counted our votes of military personnel and absentee ballots.

In the mean time, quantifying costs has begun. Already, the two sides are hundreds of millions of dollars apart when it comes to valuing the infrastructure costs Xcel wants to be paid for. Xcel has valued them at $335 million; Boulder actually has suggested they are worth zero dollars. Beyond this, there are sizable legal fees that are sure to could accrue if Boulder seeks to condemn and take over Xcel assets. Xcel continues to be the city’s natural gas provider.

Nationwide, 16 new public power authorities have been formed in the last decade, including 13 that were taken over from private utilities, according to The Wall Street Journal.  Nearly all of those systems serve communities of less than 10,000. Boulder’s population is nearly 100,000. The last large-scale municipalization took place in 1998, on New York’s Long Island.

Boulder officials are cautioning interested parties that all the issues will likely require three to five years to resolve.. Go here for their perspectives about next steps, courtesy of the Boulder Daily Camera.

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