Boulder heads for 'parallel track' in utility decisionJul 24 - McClatchy-Tribune Regional News - Erica Meltzer Daily Camera, Boulder, Colo.
Boulder City Council members urged a "parallel track" Tuesday night of moving forward with condemning Xcel Energy's distribution system and analyzing the potential of new energy efficiency and renewable energy products and services that Xcel could provide. The City Council did not take any votes Tuesday night. A special meeting is scheduled for Wednesday to hold initial votes on whether the utility could meet the charter requirements and whether to move forward with negotiations to acquire Xcel's assets in Boulder. However, a majority of council members expressed support for the idea of a municipal utility and enthusiasm for its potential. They said the city should do a thorough analysis of ideas that came out of a joint task force with Xcel, but municipalization should not be delayed. "We've got to move forward," Councilwoman Suzanne Jones said. "I think Xcel pays the most attention to us when we're walking out the door." City officials said condemnation papers probably won't be filed until January, which provides a window to analyze Xcel's proposals more thoroughly. The study session opened with a presentation by an independent consultant who reviewed the city's analysis and found that a municipal utility has a strong likelihood of meeting the charter requirements. Heather Bailey, Boulder Energy Future executive director, and Jonathan Koehn, regional sustainability coordinator, then presented an updated analysis that "stressed" the city's models and looked at a "reasonable worst-case scenario" that included higher wind prices, no carbon tax and higher acquisition costs. Councilman Ken Wilson, a longtime skeptic toward municipalization, said the new modeling addressed many of his concerns that the first round of modeling was too optimistic, and he noted that the margins for a utility being able to offer lower rates than Xcel over a 20-year period became much thinner. Boulder Mayor Matt Appelbaum countered that the city's modeling did not look at a similar worst-case scenario for Xcel and was comparing the city's worst case to the company's best case. Gregory Booth, the city's consultant, said the factors that would lead to higher energy costs for the city likely would also lead to higher energy costs for Xcel. City officials said the scenarios that appear more likely in the modeling show substantial cost savings for Boulder customers, perhaps as much as $700 million over the next 20 years. They also presented ways they thought a municipal utility could have more flexibility and add significant amounts of renewable energy and local generation. "This nimbleness, this focusing on what is local, is a tremendous advantage to us and it needs to be highlighted," Councilman Macon Cowles said. Councilwoman Suzy Ageton asked what would happen if a large company that uses a lot of electricity were to leave the system -- either by moving out of town or by taking on its own generation. Bailey said that would leave the debt service and operations cost to be shared among the remaining customers. Xcel Vice President Jerome Davis, who was in the audience, noted that was a good explanation of stranded costs. Xcel Energy has said that it expects Boulder to pay stranded costs if it breaks away, while Boulder officials have maintained they should not have to pay. Koehn said the city will also need to be careful to construct flexible power purchase agreements so that it doesn't end up with power it can't sell. Koehn said the city's strong push for more energy efficiency may ease as more of Boulder's energy comes from renewable resources. He said the city doesn't want anyone to waste energy, but officials want companies to feel secure that they'll be able to grow and expand, even if that means using more energy. Several council members expressed disappointment that Xcel was not more open to partnership agreements that would have given Boulder more control over its energy supply. "I have no doubt that if Xcel doesn't step up, the city is going to form a municipal utility, and that's going to have major repercussions for Xcel," Councilwoman K.C. Becker said. http://www.energycentral.com/functional/news/news_detail.cfm?did=29400008 |