BOULDER - The Boulder City Council Tuesday night voted 8-1 to move forward with plans to create a municipal electric utility.

Councilman Ken Wilson cast the lone descenting vote.
The council also voted 9-0 in favor of the city hiring a third-party, independent consultant to review the city's analysis of plans, including financial costs.
City staffers will start preparing for condemnation proceedings against Xcel Energy Inc., the current electricity provider, to acquire the utility's infrastructure that delivers energy to Boulder's residents and businesses.

In addition, the city is expected to refine its financial modeling to show whether or not it could provide cleaner energy at similar or lower costs, according to Heather Bailey, the city's executive director of energy strategy and electric utility development.

Of the 50-or-so people who signed up to speak Tuesday, most were in favor of creating a new municipal electric utility.

Boulder Chamber spokeswoman Angelique Espinoza was one of the speakers. She said the chamber wants to work together with the city in the future regarding creating a new electric utility. Her comments came after the chamber in a letter Monday asked that voters give their support again to the idea of a city-owned utility before the city moved forward.   

If a new vote comes about, it could be "advisory," Espinoza said.

Boulder voters in November 2011 narrowly passed two ballot measures - one giving the city an $1.9 million annual budget for five years to study how to create a municipal energy utility, and  the other giving the Boulder City Council the authority to create such a utility under certain conditions.

However, asking voters for their support again could "effectively preclude the city from pursuing condemnation," said Tom Carr, city attorney.

Mike Grim, executive manager of Denton Municipal Electric, made a presentation to explain how the city of Denton, Texas, used its municipal utility to attract economic development. In 2009, the Denton, Texas, utility was powered 50 percent by coal, 50 percent by natural gas. It's now powered 40 percent by wind, Grim said. Electricity rates to industrial customers also are 10 to 15 percent lower in Denton than they would be elsewhere, Grim said.

Condemnation proceedings against Xcel could start in August, under a timeline put together by the city. After that time, the city may have to pay Xcel Energy's legal fees if it decides to end the municipalization process, according to Sarah Huntley, a city of Boulder spokeswoman.

The legal charter governing Boulder as a city puts requirements on the potential municipalization process - mainly financial requirements, Huntley said.

For example, rates charged to customers must be the same or less than Xcel Energy would charge if the city of Boulder creates an independent utility, Huntley said. In addition, the city must show it has debt coverage of 125 percent to pay back the debt on bonds that have not been issued yet, Huntley said. Such bonds would help finance the cost of the new utility.

Other requirements for a city utility include similar or better reliability than that of Xcel Energy, a plan for increasing renewables and a plan for decreasing greenhouse-gas emissions, Huntley said. If the city can't demonstrate that it can meet all five requirements, the municipal utility plan can't go forward, Huntley said.

A working group meeting to discuss how Boulder could work with Xcel going forward is expected to make recommendations in July, according to a timeline laid out Tuesday night.