Boulder, Colo., votes for energy independence -- from its utility

On election night this November in Boulder, Colo., under the stained-glass ceiling of the Hotel Boulderado, about 100 progressive-leaning voters crowded around a screen showing preliminary results. Early in the evening, the odds of the city breaking its ties with Minnesota-based corporate utility Xcel Energy to pursue locally produced, clean power seemed as dark as the storm clouds accumulating over the Rockies. But around 9 p.m., Measure 2C, which gives the city permission to create a municipal electric utility, took the lead. Cheers and upward-thrusting thumbs  burst from the crowd. Sometime after midnight, another ballot measure -- which would raise a tax to pay for planning that utility -- also edged ahead, eventually passing by just  50.4 percent.

The campaign had been bitterly fought. Xcel poured over $960,000 into the opposition, which hired canvassers for $12.50 an hour on Craigslist. The four pro-municipalization groups spent about a tenth of that, but mustered celebrity support from President Obama's ex-green jobs czar Van Jones and Boulder author Jon Krakauer. At one point, Xcel threatened to cut Boulder customers off from renewable energy programs if the measures passed, a move Mayor Susan Osborne told the local newspaper was "a transparent ploy by a desperate corporation."

If Boulder actually creates its own utility, Xcel does have a lot to lose: about 46,800 customers and some $114 million in annual sales. The city, however, has much to gain, supporters say. With a local utility, Boulder could choose its power sources, boosting the city's ambitious efforts to shrink its carbon footprint. It also would be the first U.S. city driven to municipal power primarily for environmental reasons. "For a municipalization campaign to go ahead based on that kind of worldview is something new," says Paul Fenn, an energy consultant for the city.

Xcel Energy, which operates in eight states, actually leads the nation's utilities in wind power and is on track to meet Colorado's 30 percent renewable energy standard by 2020, the second-highest in the country. But Boulder activists say that's not enough to address climate change. By ditching coal and encouraging local power production and energy efficiency, the city hopes to cut more carbon while keeping rates competitive, and perhaps reinvent the electric grid in the process. Many questions remain, however, about whether Boulder can strike out on its own.

"Our example right now is a plucky, little liberal place that decided to make a move away from coal-based electricity," said Osborne the morning after the election. "If we are ultimately successful, that really will be a path for others to follow."

Known for its über-fit, ultra-green, extra-educated progressivism, Boulder has led efforts toward urban sustainability for years. In 2002, the city committed to cutting its carbon emissions below 1990 levels within 10 years to meet the Kyoto Protocol, the international standard shunned by the federal government. In 2006, it became the first U.S. city to impose a carbon tax to fund energy-conservation programs, hiring roaming technicians who change light bulbs and even inflate car tires for free. The idea was to reduce emissions by cutting consumption. But though Boulder's emissions haven't grown since these programs began, they haven't declined either. In 2009, city officials concluded they couldn't meet their climate goals without addressing the supply side of their energy equation.

Municipal utilities allow local governments to do just that by buying power on the open market or building generation facilities. But making the switch isn't easy, and many attempts fail under intense opposition from powerful utilities. San Francisco tried to municipalize in 2002, but a $2 million campaign by Pacific Gas and Electric helped defeat the ballot initiative. Actually creating a new utility is a complicated, expensive endeavor that requires a city to buy electric poles and wires and often haggle over costs in drawn-out legal fights. In 2000, Las Cruces, N.M., gave up when the amount it owed its corporate utility for already-made local investments ballooned.

Still, over the last decade, 13 municipalities have succeeded. Jefferson County, Wash., voted in 2008 to split from Puget Sound Energy to reduce rates, create local jobs and increase renewables; its new utility will start up in 2013. Winter Park, Fla., citing unreliable service, did the same in 2005, and now its public utility is recovering from early financial problems.

Other communities have used a softer approach to take control of their power supply. Community choice aggregation, or CCA, lets communities buy energy from where they choose, while the utility continues to own and manage the power lines, removing much of the upfront cost of municipalization. Marin County, Calif., adopted CCA in 2010 and now offers at least 27 percent renewable power at competitive rates. But CCA is not legal in Colorado or any other Western state except California, so Boulder had to go it alone.

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