A Whopper and a fantasy about Muni
Published in the Boulder Daily Camera. 10/18/17
ere we are at another decision point about whether we continue pursuing electrical autonomy in search of environmental purity. What more can there possibly be to say?
Not much, it appears, since muni advocates keep trying to woo voters by claiming the same two big benefits to Boulder citizens if we mortgage our future to buy a utility. From the start, we have been told that 1) Boulder residents will save a ton of money by municipalizing and 2) Boulder can do a better job than Xcel in cleaning up our environment if they will just hand us the keys.
These benefits would surely be good reasons to entrust our electrical future to our local government. The problem is that a rudimentary examination of the underlying assumptions needed to make these benefits possible reveals that they are nonsense.
Take the whopper we keep hearing claiming that, after Boulder takes over, the $35 million Xcel annually collects in profit from selling Boulder electricity will be ours to spend to make Boulder greener faster.
Boy, that sure sounds pretty good. The problem is that it's utterly absurd given how Boulder actually plans to run the muni.
If Boulder government was going to internally staff up and make the capital investments necessary to produce and distribute electricity, they could theoretically retain all of the profits that Xcel has been collecting. The first problem is that this assumes that a muni managed and run by city staff — complete rookies in the utility business — would be as efficient as Xcel. That, in and of itself, is an absurd proposition.
However, that's not even the plan. According to the Boulder Municipal Utility Business Plan posted on the city's website, the city is planning to issue contracts to companies to do all of the work in setting up and managing the utility as well as generating and distributing power. The only jobs that city staff would do are accounting, billing, and contracting with the companies that are going to do all the real work of generating and distributing electricity.
So, virtually all of the work to keep the lights on will be performed by private, for-profit companies under contract to the city. Instead of paying a profit to Xcel — a profit that is limited by law — we will be paying a profit to these companies that Boulder hires.
You don't need to be a Wall Street financier to understand that profits are not being "saved" but, rather, are being shifted from one private company to another.
Apparently, people trying to sell us the muni don't mind playing this shell game with profits when claiming that Boulder will, magically, be $35 million richer if they municipalize. It's not true.
We've also been promised that our quest for municipalization will ultimately reduce Boulder's CO2 emissions. While our enthusiasm for green energy is commendable, two things have to happen for this to work in the real world.
First, we have to muncipalize quickly. Boulder's insistence on the muni as the environmental solution has come at an environmental cost given Xcel's offers to green up our electricity. By my calculations, rejecting Xcel's offers while waiting for the muni has caused Boulder to release an extra 1,000 tons of CO2 into the atmosphere daily. Furthermore, if we don't municipalize by 2025, we may never be able to reduce CO2 sufficiently to compensate for the additional CO2 we have dumped into the atmosphere during our fight with Xcel. Right now, getting the muni up and running on mostly renewable energy by 2025 looks like very wishful thinking.
Second, the Boulder muni team has to be smarter than Xcel when it comes to acquiring and integrating renewable energy. While the city may be full of enthusiastic individuals, we should not confuse "enthusiasm" with "knowledge and experience." For 10 years running, Xcel has been the nation's No. 1 supplier of wind energy and has a vast portfolio of solar in its mix. Since 2005, Xcel has already reduced its CO2 emissions by 30 percent and is on the road to a 45 percent reduction by 2021 and a 60 percent reduction by 2030.
So, while we continue to dump more CO2 into the atmosphere and show few signs of having a clue about the engineering, technical, and regulatory issues surrounding the delivery of renewable energy to your Boulder doorstep, Xcel is gaining invaluable knowledge and experience that would allow us to fulfill these dreams. The claim that we will make up all the environmental ground we are losing during the fight to municipalize is a fantasy.
Decisions that affect both our environment and our pocketbook should be made based on sound analysis and a reasoned comparison of alternatives, not on whoppers and fantasies.
ere we are at another decision point about whether we continue pursuing electrical autonomy in search of environmental purity. What more can there possibly be to say?
Not much, it appears, since muni advocates keep trying to woo voters by claiming the same two big benefits to Boulder citizens if we mortgage our future to buy a utility. From the start, we have been told that 1) Boulder residents will save a ton of money by municipalizing and 2) Boulder can do a better job than Xcel in cleaning up our environment if they will just hand us the keys.
These benefits would surely be good reasons to entrust our electrical future to our local government. The problem is that a rudimentary examination of the underlying assumptions needed to make these benefits possible reveals that they are nonsense.
Take the whopper we keep hearing claiming that, after Boulder takes over, the $35 million Xcel annually collects in profit from selling Boulder electricity will be ours to spend to make Boulder greener faster.
Boy, that sure sounds pretty good. The problem is that it's utterly absurd given how Boulder actually plans to run the muni.
If Boulder government was going to internally staff up and make the capital investments necessary to produce and distribute electricity, they could theoretically retain all of the profits that Xcel has been collecting. The first problem is that this assumes that a muni managed and run by city staff — complete rookies in the utility business — would be as efficient as Xcel. That, in and of itself, is an absurd proposition.
However, that's not even the plan. According to the Boulder Municipal Utility Business Plan posted on the city's website, the city is planning to issue contracts to companies to do all of the work in setting up and managing the utility as well as generating and distributing power. The only jobs that city staff would do are accounting, billing, and contracting with the companies that are going to do all the real work of generating and distributing electricity.
So, virtually all of the work to keep the lights on will be performed by private, for-profit companies under contract to the city. Instead of paying a profit to Xcel — a profit that is limited by law — we will be paying a profit to these companies that Boulder hires.
You don't need to be a Wall Street financier to understand that profits are not being "saved" but, rather, are being shifted from one private company to another.
Apparently, people trying to sell us the muni don't mind playing this shell game with profits when claiming that Boulder will, magically, be $35 million richer if they municipalize. It's not true.
We've also been promised that our quest for municipalization will ultimately reduce Boulder's CO2 emissions. While our enthusiasm for green energy is commendable, two things have to happen for this to work in the real world.
First, we have to muncipalize quickly. Boulder's insistence on the muni as the environmental solution has come at an environmental cost given Xcel's offers to green up our electricity. By my calculations, rejecting Xcel's offers while waiting for the muni has caused Boulder to release an extra 1,000 tons of CO2 into the atmosphere daily. Furthermore, if we don't municipalize by 2025, we may never be able to reduce CO2 sufficiently to compensate for the additional CO2 we have dumped into the atmosphere during our fight with Xcel. Right now, getting the muni up and running on mostly renewable energy by 2025 looks like very wishful thinking.
Second, the Boulder muni team has to be smarter than Xcel when it comes to acquiring and integrating renewable energy. While the city may be full of enthusiastic individuals, we should not confuse "enthusiasm" with "knowledge and experience." For 10 years running, Xcel has been the nation's No. 1 supplier of wind energy and has a vast portfolio of solar in its mix. Since 2005, Xcel has already reduced its CO2 emissions by 30 percent and is on the road to a 45 percent reduction by 2021 and a 60 percent reduction by 2030.
So, while we continue to dump more CO2 into the atmosphere and show few signs of having a clue about the engineering, technical, and regulatory issues surrounding the delivery of renewable energy to your Boulder doorstep, Xcel is gaining invaluable knowledge and experience that would allow us to fulfill these dreams. The claim that we will make up all the environmental ground we are losing during the fight to municipalize is a fantasy.
Decisions that affect both our environment and our pocketbook should be made based on sound analysis and a reasoned comparison of alternatives, not on whoppers and fantasies.
