Xcel Energy announced today that talks with City of Boulder officials about a new franchise agreement have broken off because of a disagreement about what questions to put on the ballot.
Xcel spokesperson Michelle Aguayo told Boulder Weekly that city officials did not want to go along with the company’s approach of having one ballot question on a traditional 20-year franchise agreement with Xcel, and another question on an agreement including the wind-energy package proposed by the company last month. A third question could have asked voters whether they prefer the municipalization approach.
“We feel strongly that it is important to provide Boulder citizens with all options available and, pursuant to the city charter, let the voters decide,” Xcel officials said in a prepared statement. “Unfortunately, the city does not want to leave the decision to its citizens. It wants to limit the options available to voters. That is why the wind proposal to provide 90 percent renewable energy will, unfortunately, not be provided to voters. That is the source of our disappointment. Xcel Energy wants voters to decide, not us or the city.”
In its own statement, city officials said Xcel “refused to drop a condition that City Council agree to put a 20-year franchise on the ballot in November, without a corresponding wind agreement.”
They said city staff had been working with Xcel to develop a proposal for city council that could have included the franchise – only if it were paired with the increase in renewable energy associated with the possible wind agreement.
City staff said they advised Xcel “multiple times” that council support for a standalone franchise was unlikely. During each conversation, Xcel representatives indicated they wanted to keep negotiating and take that issue “under advisement” later, according to the city’s release. On Tuesday, Xcel officials said they would not agree to a wind deal at all if the standalone franchise was not a part of the proposal to council, according to the release.
“The city’s energy future goals include stable rates, more local control and a decreased carbon footprint,” the release says. “While the franchise paired with significantly increased renewable wind energy would have moved toward some of these goals, the franchise by itself does not.
“The city spent most of 2010 discussing the possibility of a standalone franchise with Xcel Energy,” the release continues. “City Council weighed many factors, including the rapidly changing energy industry, the emergence of innovative technology and Boulder’s steadfast commitment to lowering greenhouse gas emissions. After careful deliberations, council decided last summer that 20 years was simply too long to commit to a coal-dependent, investor-owned utility and rejected this option.”
City officials say they had concerns about the wind agreement as well, including “the level of financial risk the city would assume in this venture. … Many of the questions were addressed; however, Xcel’s insistence on a standalone franchise ballot option has brought the discussions to an end.”
“The City of Boulder understands why Xcel Energy wants a 20-year franchise agreement, and it is possible that council and voters might have approved that, if such an agreement came with a well-negotiated wind purchase plan,” said City Manager Jane Brautigam said in the release. “But we know that a franchise by itself would tie the city to a long-term energy future that remains largely dependent on investments in coal and a business model that prevents local communities from making decisions about their own energy futures. This runs contrary to the goals Boulder wants to achieve.”
“We spent many hours at the table, and it was clear that all the parties were committed to trying to reach a mutually acceptable agreement,” City Attorney Tom Carr said in the release. “I thank everyone for their participation, but sometimes there are problems for which there are no solutions. This appears to be an obstacle we could not overcome.”
Carr said he will provide a written update on the status of the wind negotiations as part of a memo that council members will receive prior to their July 19 meeting. He will also give a brief verbal presentation at that meeting, but the wind proposal will not be a part of that hearing.
The full memo to council will be available at www.boulderenergyfuture.com.
“The city’s original energy future goal was more renewable energy at an affordable cost,” Xcel officials said in its news release. “Our wind proposal would have achieved that, with 90 percent renewables in nine years at an estimated cost of less than $4 more per month for the average residential customer.”
Xcel Managing Attorney Paula Connelly told Boulder Weekly Thursday that it would have unfairly disadvantaged Xcel to have only the wind-energy proposal and the municipalization option on the ballot, because municipalization was being portrayed as a money-saver, which Xcel disputes. Connelly says the city’s municipalization study reflects lower rates because it does not take into account adding any more renewable energy, which is costlier than fossil fuels. Comparing the traditional franchise agreement to one that has the wind-energy package is apples to apples, she says, while comparing the wind-energy package to municipalization is apples to oranges. People voting with their pocketbooks would have chosen municipalization because it is being portrayed as providing lower rates.
“It unfairly stacks the decks against us,” Connelly says.
She says Xcel would have campaigned for the two Xcel options if they had ended up on the ballot. The company’s preferred option was the wind-energy package, Connelly says, even though “there was no profit in the wind-energy proposal for Xcel at all.”
Still, Xcel has not ruled out the possibility of returning to the table, depending on what happens at the council’s July 19 meeting.
“We remain hopeful that city council will change its mind,” Connelly says. “We’ll know Tuesday night.”
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