Boulder will not seek to annex nearby unincorporated areas if it pursues the creation of a municipal energy utility, but roughly 5,700 properties could become customers of the new utility, the city's energy director said in a letter sent to county residents and business owners.

Heather Bailey, energy strategy and electric utility development executive director for Boulder, said in the letter that engineers working for the city had identified six substations they would seek to acquire in the event a municipal energy utility is formed. Several of those substations serve the city and nearby unincorporated areas in Gunbarrel and north Boulder.

"The city's engineers have concluded that serving the entire area currently served by these substations is the best way to ensure reliability and the most technically optimal option for separating the existing system from that the city would operate," Bailey said. "This means that a city-run utility, if created, would provide electrical service to all residences and businesses served by these substations, including those, like yours, that are outside of city limits."

The six substations are in Gunbarrel, Niwot, Boulder Canyon, the base of Sunshine Canyon, near the Valmont Power Plant and near Valmont Road and 28th Street.


Bailey stressed that no decisions have been made about forming an energy utility. Her team plans to present recommendations to the City Council on the feasibility of such a plan Feb. 26, and the City Council is scheduled to vote on the matter April 16.

However, Boulder officials want county residents who could be affected by the city's decision to be aware of the process and have an opportunity to submit comments and ask questions, Bailey said.

County residents who want more information about municipalization are invited to attend an open house from 6:30 to 8:30 p.m. March 13 at the West Senior Center, 909 Arapahoe Ave.

Xcel Energy spokeswoman Michelle Aguayo said the company needs time to analyze Boulder's position on the substations and seeking to provide service to non-city Xcel customers.

However, she noted that county residents in the potential service area of the city didn't get to vote on municipalization the way city residents did.

"We believe that someone should be asking the county commissioners and potentially thousands of customers outside the city of Boulder, who didn't have an opportunity to vote on Boulder's municipalization, how they feel about all of this," she said.

Boulder voters narrowly approved two ballot measures in 2011 that gave the City Council the authority to create a municipal energy utility and raised the utility occupation tax to pay for studying the feasibility of doing so.

City spokeswoman Sarah Huntley said county residents didn't get a chance to vote on being Xcel customers either.

City officials are sensitive to the fact that county residents -- as well as city business owners who don't live in the city -- may not feel represented by the City Council, Huntley said. She said part of the discussions around governance will be how to represent county residents and business owners on the utility advisory board.

Also, if the city wants to charge county residents more than it charges city residents, officials would have to take that request before the Public Utilities Commission, which regulates utility rates.

Many county residents now have city sewer and water. Some of them pay higher rates than city residents, but Huntley said that's because there were extra costs to extend city infrastructure.

If the city forms an energy utility, it would use existing infrastructure, and there would not be additional costs to extending service to the county, Huntley said.

The city used three separate engineers to do its analysis, two to look at Xcel's existing infrastructure and a third one to vet the work of the first two, Huntley said.

Residents of unincorporated areas adjacent to Boulder have a history of resisting annexation. In the Gunbarrel area, many residents are especially attached to the Boulder Rural Fire Department.

Gina Hyatt, a longtime resident and member of the Gunbarrel Green Homeowners Association, said she hasn't had time to talk with other board members about what municipal energy might mean for them.

They had been more focused on possible annexation, which Bailey said she would not recommend.

Huntley said the city will create a municipal energy utility only if it can provide comparable rates and reliability with Xcel Energy over a 20-year period while also providing more energy from renewable sources.

"We believe there would be benefits to customers from receiving municipal power," she said.

Contact Camera Staff Writer Erica Meltzer at 303-473-1355 or