Boulder will spend the next four months shoring up the case for a city energy utility and looking for ways to partner with Xcel Energy to achieve the same greenhouse gas reduction goals.
The Boulder City Council took one more step toward municipalization late Tuesday night with an 8-1 vote. Councilman Ken Wilson cast the lone "no" vote.
Despite their skepticism about municipalization, council members Suzy Ageton and George Karakehian lent their support to the majority because they want to see continued analysis of the pros and cons.
As required by the charter, the city will hire an independent consultant to review its earlier analysis, which found that Boulder could get more than half its energy from renewable resources, mostly wind power, at rates similar to or lower than Xcel Energy's.
That consultant will be hired by City Manager Jane Brautigam rather than by city staffers who have been working on the Energy Future project to ensure neutrality, Brautigam said.
At the same time, city officials will be further refining their modeling, including soliciting prices from potential wind providers and incorporating information from a new resource plan recently filed by Xcel at the Public Utilities Commission, which shows greater increases in coal prices than Boulder had originally modeled.
Boulder officials also will be working on an appraisal of Xcel's distribution system in preparation for possible condemnation proceedings against the utility and trying to get clarification from federal regulators about whether Boulder is likely to owe stranded costs to Xcel.
Total acquisition costs could have a big effect on whether Boulder is able to offer lower rates than Xcel.
Boulder modeled a range of costs for the physical assets, with the high end being $150 million. Xcel Regional Vice President Jerome Davis told the council that the high-end estimate to acquire the company's physical assets in Boulder was too low and didn't include all the infrastructure.
In an interview Wednesday, Davis said $150 million would be too low, but when asked what assets were not included, he said he was "not going to get into that right now."
He then said it was not Xcel's job to help Boulder get information about the company's system.
"They don't know because they don't know what we own," he said of Boulder's cost estimates. "It seems to me that people don't believe our expertise is valuable."
Tuesday night's vote was not the final decision. The final decision would be if the city issues bonds to buy Xcel's assets and start a utility, but the decision in August about whether to initiate condemnation proceedings is significant.
The city cannot do that unless it is willing to pay at least its initial offer, and if the city backs out after starting condemnation -- whether due to escalating costs or changing political winds -- it could face financial penalties.
City Attorney Tom Carr said holding another citywide vote before bonds are issued, as some have suggested, would place the city in a "Catch-22" that would jeopardize the condemnation proceedings.
As Boulder continues to research municipalization, a working group is looking at ways to partner with Xcel Energy to achieve similar reductions in greenhouse gas emissions.
That group is expected to present its findings just a month before the City Council votes on condemnation.
"We are expecting the working group to have robust conversations with city staff and Xcel about possibilities and come to consensus if possible about which possibilities are the most viable and provide a sufficient level of detail that we can model it against the alternative," city spokeswoman Sarah Huntley said.
Davis said Xcel is open to working with Boulder and interested in ideas that can be applied throughout its system. However, the possibility of municipalization doesn't give the city any leverage or make Xcel more likely to make concessions.
"There's nothing in our mind that creates leverage to do something we wouldn't otherwise do," he said. "And we haven't seen other cities jumping up and saying, 'Let's go.'"
Councilman Tim Plass, who made the motion to move forward with municipalization, said Boulder has the opportunity to be a leader.
"We have a chance to be a city on a hill," he said. "I understand that our contribution to global greenhouse gas emissions is a drop in the bucket, but I think we can have a much larger impact. I don't see a lot of movement at the state and federal level, and I think a lot of the progress is going to come from the cities."
Councilman Wilson said Boulder will have less influence over large utilities if it breaks away from Xcel.
"If we form our own municipal utility, who will be there pushing Xcel at the state level?" Wilson asked. "I think that will be a loss. All that money and all that time could be used on renewable energy projects and conservation. That's a loss."
Contact Camera Staff Writer Erica Meltzer at 303-473-1355 or firstname.lastname@example.org.