BOULDER - The city of Boulder's efforts to break away from Xcel Energy Inc. and create its own municipal electric utility scored a victory Tuesday when voters rejected ballot measure 310 and approved competing issue 2E.

However, the fact that a debt-limit measure passed left municipalization opponents feeling somewhat vindicated and questioning whether the city's plans are even now feasible under the constrains of 2E.

Issue 2E passed with two-thirds of the vote, while 310 was shot down by nearly 69 percent of voters according to updated numbers early Wednesday afternoon.

Issue 2E sets a limit of $214 million on the amount the city is allowed to pay for the Xcel assets needed to set up its own utility, as well as stranded costs owed to Xcel to compensate for investments it had made in serving Boulder customers for some future period.

Issue 310 would have required voter approval for any debt issued in relation to a municipal utility. It also would have required that any potential nonresident customers of the utility be allowed to vote in such elections and that those elections be held only in odd-numbered years at the time of general elections. The combination of terms is one that municipalization supporters argued would have killed the efforts to create the utility.

Issue 2E provides that customers of the new utility who live outside city limits will be allowed to serve on the utility's advisory board. It facilitates utility choice on a neighborhood-by-neighborhood basis to nonresident customers. It requires nonresident customers to be treated the same as residents as it relates to rates. And it limits brokerage fees associated with acquiring debt to purchase the utility.

"We are pleased with the results of (Tuesday's) election concerning the municipalization ballot items," Heather Bailey, Boulder's executive director of energy strategy and electric utility development, said in a prepared statement. "The additional requirements set by 2E will address concerns about the unknown amounts of acquisition and stranded costs associated with forming a local utility and help define the path the community would like us to take toward creating the electric utility of the future right here in Boulder."

Issue 2E was initiated by city staff and placed on the ballot by the pro-municipalization city council in response to 310. The group Voter Approval of Debt Limits gathered enough voter signatures over the summer to have that measure placed on the ballot.


"Tonight's results are a partial win for those of us who want to see voter approval of debt limits," VADL's Meg Collins said in a release. "Had we not put question 310 on the ballot, the city never would have contemplated including the voters in utility debt decisions."

Xcel has fought Boulder's municipalization efforts from the start, stating that it is an unwilling seller of its assets, which likely means the city will have to condemn them by eminent domain in court. Xcel donated $500,000 to VADL's campaign on 310 and noted on its last campaign filing with the city prior to the election that it expected to donate another $195,000.

The company has continued to argue that Boulder's clean energy goals can be better served by Xcel than by the city creating its own utility. On Tuesday, the company even implied that municipalization backers might have hamstrung their own efforts with the passage of 2E's $214 million debt limit. Xcel contends that the acquisition and stranded costs will exceed that amount, though the company isn't willing to throw out a specific number of its own until it is determined exactly what assets and customers Boulder would be acquiring.

"In passing 2E, Boulder Voters have made it clear that they want to limit how much the city can borrow to create the municipal utility," the company said in a prepared statement. "While we supported Measure 310, we don't see how the city can acquire Xcel Energy's electric utility for the $214 million cap set by 2E."

Municipalization backers raised nearly $350,000 leading up to the campaign, led by an issue committee formed by New Era Colorado. Tuesday's results were viewed as a resounding triumph by New Era officials.

"Our volunteers worked around the clock over the last few days knocking on doors, calling voters, and offering rides to the polls to make sure everyone's voice was heard loud and clear," New Era executive director Steve Fenberg said in a release. "We were outspent by more than 2-to-1, yet we won by 2-to-1."