Bowing to pressure from city officials, representatives of Xcel Energy on Tuesday night finally outlined the company’s long-awaited plan for keeping Boulder as a customer.
Paula Connelly, an attorney for Xcel, said the utility wants Boulder voters to approve two ballot measures in November.
The council has been exploring the possibility of asking voters whether the city should become a municipal utility or extend its longtime relationship with Xcel.
If Xcel gets its way, one question would ask voters to approve a new franchise agreement with the company, making it the exclusive provider of electricity to Boulder for the next 20 years. A second question would ask voters to approve a public-private partnership in which Boulder customers would pay the difference between the cost of new wind energy on Xcel’s system and the company’s savings from having the wind energy on its grid.
“Boulder, then, by paying the difference, gets the renewable energy credits,” Connelly said.
Boulder would receive the equivalent of 70 percent renewable electricity by 2013, and up to 90 percent renewable electricity by 2020 as Xcel adds additional renewable sources of electricity to its overall grid, she said.
She said the estimated 200 megawatts of wind power would not be built unless Boulder agrees to the deal.
“This is not a situation where we’re taking renewable energy out of one pocket and putting it into another,” she said. “This is clearly wind that is being built for Boulder.”
Connelly said that, for the first few years of the program, Boulder would likely pay a “premium” for the added wind power.
She said Boulder voters would essentially be betting that wind power will become cheaper than traditional fossil fuels over time.
It’s a risk, she said, “but you also get all the benefits.”
She suggested the city could use its Climate Action Plan tax to collect the extra fees, or the city could issue bonds to help “smooth” utility rates for the first few years.
But, she added, the offer is a “time-limited opportunity.”
A federal tax credit that could reduce the cost of additional wind power on Xcel’s system by up to 40 percent is set to expire at the end of 2012. That means Boulder voters would have to approve both ballot measures this November, or the deal is off.
She said Xcel is still developing information about utility rates under its plan, but the company is reluctant to discuss that now because it’s still in negotiations with a third-party wind developer – which she did not name.
Xcel’s pitch came as the City Council voted Tuesday night on a “placeholder” franchise agreement. The council unanimously approved that measure at 11:40 p.m., but the approval does not mean the measure makes its way onto the ballot.
Election laws require the city to at least get a first reading done now, but the council has until Aug. 16 to decide what to put on the ballot.
“I think this is intriguing,” Councilman Ken Wilson said of Xcel’s offer.
Most of the council members agreed, but they also were cautious.
Councilman Matt Appelbaum said that “100 percent of the risk and 0 percent of control is a little bit scary.”
Councilwoman Suzy Ageton agreed.
“There has to be some balancing of some risk,” she said.
Councilman George Karakehian said he’s “disappointed in the position we’re in now” by not having very many details about either a renewed franchise with Xcel or becoming a municipal utility.
City attorney Tom Carr said that city staffers would work for the next few weeks to flesh out as many details as possible.
“We’ve got a lot of work to do,” he said. “Our plan is to fully vet this proposal with the public.”
The meeting drew interest from a broad coalition of clean-energy advocates, who have been anxiously awaiting Xcel’s proposal.
Steve Pomerance, a former Boulder councilman who has participated in the city’s “energy future” campaign, warned the council to be cautious in evaluating the proposal.
“If Boulder were to sign this deal, and it goes to the (Public Utilities Commission) and the (commission) turns it down, you’ve basically lost a year on municipalizing,” he said. “Be aware of what could happen.”
Julie Zahniser, a member of the Renewables Yes citizens group, said she thinks Boulder residents would want to see a “complete comparison” of its energy options before voting on anything.
|Wind Watch relies entirely
on User Funding