City gathering information on municipalization
Heather Bailey, Boulder’s executive director of energy strategy and electric utility development, said the council will have the information it needs to be able to form and begin implementing a long-term strategy in the first quarter of 2013.
Boulder is considering whether to form a municipal utility that would replace Xcel Energy Inc. as the city’s electricity supplier. Voters narrowly gave City Council the ability to create a utility and a $1.9 million budget to study the issues last November.
Boulder staff and outside consultants currently are focusing on whether the utility could meet targets written into the city charter, Bailey said.
The utility would have to meet or beat Xcel Energy’s rates, reliability standards and use of renewable energy.
Boulder’s staff and consultants are working with experts and community members to determine if that’s achievable, Bailey said. Sometime early next year, they should have a recommendation about whether Boulder should move to the implementation phase, which could include developing a fuller separation plan and negotiation with Xcel Energy over acquiring its assets.
Xcel Energy has said it is not a willing seller, which opens the possibility of Boulder needing to condemn the grid and obtaining it through eminent domain. State law requires the sides to negotiate in good faith, but if an agreement is not reached a state court would set the price.
City Council members largely focused on process questions when they questioned the plan.
Council member Suzy Ageton asked how the city was reaching out to municipalization skeptics and opponents. She also asked the work plan more explicitly address the risks and possibility that municipalization is not the way forward.
“It would help that our community sees we’re looking at both the upside and downside of what we could do,” Ageton said.
Some of the most vocal opposition to municipalization has come from the business community, which the city has estimated consumers 70 percent of power in Boulder.
The Boulder Chamber opposed the ballot measure passed last year that allows municipalization to go forward. Business also formed coalitions opposing and supporting the measure.
Bailey said she has been meeting individually with businesses and is hopeful skeptics will participate in the study process “to form that balancing check.”
The outreach process will “… hopefully instill some confidence that this process does have integrity and will be balanced, and also will encourage them to participate,” she said.
Several council members asked if the city would annex neighborhoods outside of Boulder.
Annexation is a possibility and would be based on technical and cost factors, Bailey said.
Council member George Karakehian said residents of unincorporated Boulder County have expressed worries they will be annexed into a utility despite not having a vote on the process.
Deputy city attorney David Gehr outlined the different possibilities. Some residents live in “enclaves” surrounded by Boulder, and the city has the authority to annex them. Other areas are outside city limits but are served by Boulder’s city and water utilities. They have contracts with the city that allows Boulder to annex them, Gehr said.
County residents outside Boulder who do not have city utility service are another category, he said. Boulder would need to negotiate an annexation agreement with them before it could proceed, Gehr said.
Annexation must be approved by City Council, and it would be up to them to deal with the political issues it creates, Gehr said.
Because the meeting was a study session, public comment was not taken. City Council members were able to ask questions and offer feedback, but a vote on a policy must be made in a regular council meeting.
Xcel Energy executives attended the meeting, and the company has been studying Boulder’s plans. Spokeswoman Michelle Aguayo emailed a written statement from the company saying Boulder is moving forward too quickly and appears determined to pursue municipalization.
“We continue to be concerned for our customers in Boulder who have been led to believe by this Council and city leaders that municipalization is the only option available to acquire more renewable energy and lower greenhouse gas emissions,” the statement said.
“Tonight’s presentation continues to show the narrow path and focus of the Council and Ms. Bailey to study only the most extreme and expensive option – attempting to take possession of our electric system in Boulder.”
The statement also said Xcel Energy wants municipalization opponents to come forward.
“Our customers in Boulder need to take an active part in voicing their opinions and questioning their city leaders. This is an issue that is of vital importance to Boulder, and we believe all voices and options should be heard and explored.”
The city of Boulder is trying to solicit comments about creating a municipal utility from businesses and residents in several ways. It has established an interactive website, http://www.InspireBoulder.com, where users can comment on the energy strategy. The city also plans to hold open houses this fall, and business owners are invited to contact Heather Bailey, Boulder’s executive director of energy strategy and electric utility development, through the www.BouldersEnergyFuture.com website.
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