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Boulder's energy future on the ballot

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Nathan Rice | Oct 31, 2011 02:45 PM

Glossy propaganda has been piling up in my mailbox for months in the lead up to Election Day in Boulder, Colo. Next to a frowney-faced electrical outlet, an ad warns of rate hikes and other terrors: "Municipalization means serious risks to rates and our community's energy goals." The slick, full-color fliers come from the Boulder Smart Energy Coalition, a deep-pocketed citizens' group, who, along with investor-owned utility Xcel Energy, appear very worried about Boulder's desire to run its own municipal utility. The city hopes to unplug from Xcel and go it alone in the power business, allowing it to localize and green its power supply -- a gutsy move that could set a precedent for other local governments with similar goals around the country.

frowney outletBoulder voters must approve two ballot measures to let the city move forward. Ballot measure 2B would increase the utility occupation tax to $1.9 million per year to pay for engineering and legal fees for developing the new utility. Measure 2C would give the city permission to create an electric utility and issue bonds to buy electrical poles and wires from Xcel.

The vision for municipalization stems from Boulder's ambitious Climate Action Plan, which seeks to reduce the city's carbon emissions. Already, state renewable energy standards require Xcel to provide 30 percent renewable energy by 2020 -- the strictest renewable energy standard in the country, after California. Citizens for Boulder's Energy Future say a city-owned utility could have 40 percent renewables and cut carbon emissions by 60 percent without increasing rates.

smiley outlet

But my growing propaganda pile comes solely from the folks trying to stop the city utility. And I don't even live in Boulder -- I haven't for almost a year. I'm not sure how or why the Coalition got my new address on the other side of the state (perhaps because I've blogged on the issue before), but it shows how hard Xcel and its allies are working to stop the city effort. As The Daily Camera reports, the anti-municipalization camp has spent about $900,000 to fight the measures (including over $400,000 from Xcel), making it by far the most expensive political issue in Boulder history. That's more than 10 times the $82,818 the other side has spent. The Boulder Smart Energy Coalition has hired canvassers on Craigslist for up to $12.50 an hour to speak out against the city utility. Xcel has a lot to lose if the city breaks away: 46,800 Boulder customers, 3.4 percent of its customer base and $114 million in annual sales.

By not sending all of that money to Xcel and its shareholders, Boulder has much to gain. Currently, 29 Colorado towns run their own electrical utilities and one in seven Americans use public power. Revenue from a city-owned utility could be invested in local energy sources and renewable energy on the open market, while potentially lowering costs for ratepayers.

But getting to that point won't be easy. If the measures pass, the city and Xcel will have to hash out costs for acquiring the poles and wires that distribute electricity. The city may also be required to reimburse Xcel for investments already made for Boulder's energy needs, called "stranded costs." Naturally, the city and Xcel don't agree on these costs; Xcel says stranded costs could total $336 million while the city maintains it may not have to pay them at all. Those negotiations could lead to years in court. Opponents say such uncertainty over cost would mean giving the city a blank check by voting for the ballot measures.

The city promises that municipalization will only move forward if projected rates are the same as Xcel's or lower "at the time of acquisition." It's unclear how rates might compare to Xcel's going forward, but Xcel predicts its own rates will increase by 34 percent by 2020. The ballot measure assures voters that if costs get too high in the process of creating the utility, the city can call it quits and go back to the status quo.

But some Boulder residents and businesses wonder if it's worth the risk. After all, Xcel is already on track to reach Colorado's renewables mandate -- the second-most stringent in the land. While clean energy is clearly a priority for the city, nothing in the ballot measures commits them to providing more alternative energy than Xcel.

Even without a well-funded direct mail campaign, the pro-municipalization groups have mustered significant celebrity support. The Boulder Smarter Energy Coalition, has a YouTube video with Van Jones, Obama's ex-green jobs czar, speaking in favor of the Boulder effort. Prominent author and Boulder resident Jon Krakauer and other local luminaries also lent their personalities to the cause.

Meanwhile, the Boulder Smart Energy Coalition presents dramatizations of frustrated future customers experiencing brownouts due to the unreliable municipal authority. Xcel recently threatened to cut Boulder customers off from renewables programs if the measures passed, a move the Public Utilities Commission said is not allowed. Boulder Mayor Susan Osborne called the threat "a transparent ploy by a desperate corporation."

How Boulder votes, and what happens next, could set an example for broader efforts to localize and diversify sources of electricity. Hopefully, voters can find their mail-in ballot in the pile of political ads and make an informed decision about the uncertainties -- and potential rewards -- of taking their power back.

 

Nathan Rice is an editorial fellow at High Country News.

Smiley face electrical outlet logo from the City of Boulder.

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