Boulder Energy Options

In August of 2011, the Boulder City Council voted unanimously to put two energy-related issues on the November 2011 ballot.  The first asked voters if they would authorize the creation of a locally-run electric utility.  The utility would only be created once all costs are determined, and if rates would be no more than those of Xcel Energy at the time of acquisition. The second ballot questions asked voters if they would extend and increase the Utility Occupation Tax to fund the preliminary costs associated with setting up the local utility.

>> See the ballot language

The evaluation of various energy options and the final decision to place municipalization on the 2011 November ballot were guided by the following goals and objectives:

• Cleaner energy, from renewable sources instead of fossil fuels
• Reliable power that is competitively priced
• Local decision-making and as much local generation of energy as possible

Throughout the analysis of its energy options, the city made a commitment that our community’s decision would be grounded in solid data, an understanding of the implications and clear communication to support an informed choice by Boulder voters.

With City Council's decision to put municipalization and interim funding on the ballot, voters, in effect, were being given two options:

Option 1: Gathering firm costs associated with the possible purchase of Xcel Energy’s distribution system and authorizing the formation of a municipal power company

This option requires a positive vote on two separate ballot questions:

1. A temporary tax to fund final legal and engineering studies

2. Authorization to create a local utility and issue bonds

First, voters will be asked whether they approve funding to begin the final engineering and legal steps required to arrive at firm acquisition and startup costs. The second ballot question asks for authorization to form a new energy utility.

If the voters approve the first ballot question, the city would be allowed to raise the money necessary to initiate the additional steps that are key to determining final acquisition and related costs, as these are decided by independent courts and regulators. If the voters approve the second ballot question, the city would have authority to create the utility and issue bonds to purchase Xcel Energy’s system if the final costs would result in comparable rates at the time of the purchase.

Option 2: Keeping the system the way it is

If voters do not approve the ballot issue regarding the creation of a local electric utility, Xcel Energy would continue to provide electricity and natural gas service to Boulder, using its existing business model and treating Boulder the same as the rest of its service area, with the exception that it would not set aside 1% of revenues collected in the city for  the purpose of undergrounding overhead wires.

In addition, it would collect the Utility Occupation Tax rather than a franchise fee and it would continue to collect the CAP Tax. Xcel Energy passes the Utility Occupation Tax through to its Boulder customers on their monthly bill and remits the amounts collected to the city to replace money Boulder would have received if the city had signed a 20-year franchise agreement.

The CAP Tax is also collected by Xcel Energy on its Boulder customers’ monthly bills and is remitted to the city to support energy conservation programs. These taxes will expire in 2015 and 2013, respectively, unless voters approve an extension of these taxes. Until then, or for a longer period if voters extended these taxes, the city would conduct an analysis of its current programs and work to determine what, if any, additional localization strategies are possible. Current laws and regulations that apply to cities under investor-owned utilities could limit Boulder’s ability to enact significant changes under this option.

In November 2011, City of Boulder voters narrowly approved two measures that supported taking the next steps in exploring the possibility of acquiring Xcel Energy's distribution system and forming a city-owned utility.  The next steps in exploring potential municipalization include extensive engineering and legal work to determine how much it would cost to purchase the distribution system and operate a city-owned utility. The city believes it will take 3 - 5 years to complete this process, although there will be several "off-ramps" where a decision to continue with the process or pursue other options will need to be made.

Last Updated on Wednesday, 19 December 2012 15:35