Energy advisers: Annexation not needed for utility
Michael Davidson
BOULDER — The owners of 5,700 homes and businesses outside Boulder’s city limits will not become Boulder residents if the city forms a municipal utility, but they would become the utility’s customers if a service plan being considered by the city comes to fruition.

That is the takeaway message from letters the city sent Feb. 14 to residents and property owners in unincorporated Boulder County who are near the city’s borders. The unincorporated communities of Gunbarrel and Niwot would be most affected, as the eastern border of the service area would be along 75th Street.

The letters were the result of studies conducted by city staff and its legal and engineering advisers. They were signed by Heather Bailey, the city’s executive director of energy strategy and electric utility development.

In November 2011, voters narrowly gave Boulder City Council the authority to create a municipal utility if it could offer power as reliably and safely as current provider Xcel Energy Inc. Other conditions require rates to be cheaper, carbon emissions to be reduced and more energy to be obtained from renewable sources.

Since then, city staff and outside advisers, including planners, engineers and lawyers, have been studying to see if a utility is feasible.

The process has been highly controversial, and one source of dispute is over whether Boulder would annex parts of Gunbarrel and Niwot. Xcel Energy also has made clear it does not want to sell its Boulder assets, which would mean Boulder would have to take them through eminent domain litigation.

The city’s engineers and lawyers have determined Boulder would not have to annex land outside its current borders in order to create a “technically optimal” utility, the letters state.

However, they do believe Boulder would require two electrical substations that are outside city limits to create the utility. Those substations serve both residents of Boulder and many people and businesses outside city limits.

“I will be recommending to the council that they not consider annexation as a part of the energy future project,” Bailey wrote.

“For technical and efficiency reasons, however, I will be recommending that the city seek to acquire all six of the electrical substations currently serving the city. … This means that a city-run utility, if created, would provide electrical service to all residences and businesses served by these substations, including those that are outside of city limits,” she wrote.

The decisions about what was or was not needed were driven by technical considerations, city spokeswoman Sarah Huntley said. If the city utility did not include the substations, it would have to build very costly replacements.