Jan 14 - Daily Camera, Boulder, Co.


If Boulder wants to radically reduce its carbon footprint, the city should let its contract with Xcel Energy expire, according to a Denver renewable energy lawyer.

Susan Perkins, who has helped several municipalities negotiate with large electric utilities, will explain her argument at a free presentation tonight in Boulder.

The existing franchise agreement between Xcel and Boulder allows the utility to sell and distribute electricity to all city residents. In return, Xcel pays the city about $3 million a year. The agreement is set to expire in August, and city staffers have been working for more than a year -- largely in private -- to negotiate a new contract.

"What's been lacking is a public, transparent and rigorous inquiry into whether or not Boulder's carbon reduction goals can be met if they're inexorably linked to Xcel's carbon footprint," Perkins said.

 Boulder has committed itself to meeting the Kyoto Protocol, which calls for a reduction of greenhouse gas emissions to 7 percent below 1990 levels by 2012, and many city leaders are already talking about how to move beyond that goal.

Almost 60 percent of the carbon dioxide emissions generated by the city are tied to electricity use. Even with energy-efficiency upgrades to homes and businesses, that means Boulder cannot make massive cuts to its carbon footprint while Xcel continues to rely heavily on coal and natural gas to make electricity, environmentalists say.

Many carbon-cutting proponents have asked the city to drive a hard bargain with Xcel during the franchise negotiations, but Xcel and some City Council members have argued that the franchise agreement is not the best tool for changing the energy mix.

"The franchise agreement is really basically a right-of-way agreement where we allow Xcel to use city rights-of-way in exchange for them paying us money," said Councilman Ken Wilson.

Wilson argues that the city and Xcel need to work together to come up with ways to reduce carbon but that the franchise agreement is not the only way -- or even the most appropriate way -- to do that.

Perkins agrees. But where Wilson would argue that the city should move forward on a franchise agreement so Boulder is not left "in limbo," Perkins believes that the contract should be left on the table until Boulder has more options for controlling its energy supply.

Xcel Energy is obligated by the Public Utilities Commission to continue providing electricity to Boulder -- and paying Boulder its franchise fee -- even after the contract expires, according to Perkins. So she argues that Boulder gains nothing by entering into another 20-year contract that may be hard to get out of if a better option comes along.

Perkins thinks that better option could be community choice aggregation, a structure for delivering electricity that is not now legal in Colorado but which is allowed in other states, including Ohio and California.

Community choice aggregation allows cities to purchase electricity directly from power providers -- which could include wind farms and large-scale solar arrays -- and obligates utilities to deliver that power on its existing grid infrastructure.

"The attraction of community choice aggregation ... is that cities, and larger aggregations of cities and counties, are free to implement their own energy policy goals without the need to purchase, own and operate the incumbent utility's distribution system," Perkins said.

And Perkins has faith that if large communities demand the new structure for buying and distributing electricity, the law could change in the near future. Already, the cities of Denver, Aurora and Golden have added clauses to their own recently renegotiated contracts with Xcel that would allow them to participate in community choice aggregation if the law changes.

Regardless, the new franchise agreement -- which must be approved by voters -- will not likely be ready this year, according to Wilson. Instead, Xcel and the city will continue negotiations under a temporary agreement, he said.

Contact Camera Staff Writer Laura Snider at 303-473-1327 or sniderl@dailycamera.com.

If you go

What: Energy lawyer Susan Perkins discusses Boulder's options for controlling where its energy comes from at a meeting sponsored by Clean Energy Action

When: "Social hour" begins at 6:30 tonight with presentation to follow at 7 p.m.

Where: Unity Church, 2855 Folsom St. in Boulder

More info: cleanenergyaction.org

Boulder's energy supply options

Franchise agreement: Boulder residents now get their electricity from Xcel Energy, which has a franchise agreement with the city. This agreement gives Xcel access to the city's rights-of-way so the company can sell and distribute gas and electricity to all residents. In return, Xcel pays Boulder about $3 million a year.

The 20-year agreement between Boulder and Xcel expires in August. Local renewable energy advocates have pushed the City Council to drive a hard bargain when negotiating the new agreement by demanding that a larger percentage of Boulder's energy come from green sources. Opponents argue that the franchise agreement does not have the scope to accommodate those kinds of requests.

Municipalization: In 1970, in 1990 and again in the last several years, city officials have considered municipalizing Boulder's electricity supply, which would have created a city-owned electric utility. About 2,000 cities in the country already own their utilities, but new municipal utilities are rarely created, with only 10 coming online over the last decade.

To municipalize its electricity, Boulder would essentially have to take over the grid from Xcel, purchasing the existing infrastructure and running the distribution system. In 1970 and 1990, the city chose not to pursue municipalization, and instead, officials entered into a new franchise agreement with Xcel.

In the spring of 2008, the City Council again decided to drop plans to municipalize.

Community choice aggregation: This structure allows a city to purchase energy directly from power producers -- such as wind or solar farms -- but allows that electricity to be delivered by the existing utility, which in Boulder's case would be Xcel. This allows cities, or other "aggregated groups," to buy electricity from sources that support their energy goals without requiring them to purchase, own and operate the existing utility's distribution system.

This type of structure is not yet legal in Colorado, but many renewable energy advocates say they're working to lobby the Legislature to change the rules.

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