Good and Bad News for Boulder Power, Inc.
Published in the Boulder Daily Camera, July 3, 2011
Boulder’s energy future has taken some interesting turns. First, the good news. Xcel Energy presented a proposal to the City Council that would allow Boulder to develop wind energy equal to 90% of city electrical usage. For those who have worked hard to put Boulder at the forefront of clean energy, this is a clear victory since, without the prodding of local energy activists and the support of City Council, Xcel would never have come up with this aggressive renewable energy plan. There are still issues that need to be resolved, such as how Boulder pays for the additional wind energy. But, if Boulder comes to terms with Xcel, we will again have pushed the boundaries of renewable energy use and, over time, reduced our, and America’s, reliance on fossil fuels. Great stuff.
However, Xcel’s offer has a ticking clock. If the City does not put some variant of the Xcel proposal on the ballot this November, the tax credits for the wind energy may expire and the cost will go up. So, if this is the best deal we are going to get, City Council needs to move on it now.
The bad news is that the City staff released their draft Business and Utility Development Plans for municipalization, and they were awful. In a column last month, I outlined three things that we should see in these Plans, and they failed to adequately address any of them.
First, I suggested that the City needs to be clear about the goal of municipalization, which was, I thought, a cleaner energy future. However, the Plans focus more on providing cheapelectricity than clean energy. They suggest that Boulder municipal electricity would cost about the same as electricity with Xcel, but there were glaring omissions in the initial cost analysis. For example, they did not include costs for Smart Grid and stranded costs, which everyone knows Boulder will owe, at least in part. Additional cost analyses were released this week that included some of these known costs, but City staff are not telling us how much and what costs are included in these revisions. Testimony before City Council made clear that these cost analyses were more of an opening position for negotiations with Xcel than a realistic cost baseline for Boulder voters. While that sort of gamesmanship may help Boulder’s lawyers, it won’t help Boulder’s citizens understand what electrical rates to expect after municipalization.
Worst of all, the cost analysis included no funding whatsoever for more local renewable energy production. None. While the City staff must demonstrate that they can provide electricity at rates comparable to Xcel, they also must give us a clear roadmap to achieving a sustainable energy supply, and it was simply not there. Bottom line – I see these Plans as a step backwards in convincing us that Boulder can provide either cleaner or cheaper electricity than Xcel.
Second, the City must tell us how they are going to build an organization that could pull off municipalization. Boulder voters may be asked to support a government bureaucracy taking over a critical element of city infrastructure, but virtually all of the critical organizational analysis was kicked off into the future. Before Boulder undertakes this complex endeavor, organizational questions need to be asked and answered. Bottom line – Boulder’s Plans for building the required organization was far too general and preliminary to be convincing.
Finally, the Plans must address the risks of municipalization. This is a risky endeavor and, yet, not a single paragraph addressing these risks was included in either the Business or Utility Development plans. Not one. Either no one has confronted the numerous technical, financial, and organizational risks the city would be facing, or they are not telling us about them. Bottom line – these plans don’t just give us the view with rose-colored glasses, they are blind to the many risks involved with Boulder taking over the electrical supply system.
All in all, the Plans released by Boulder caused more concerns than they resolved. If Boulder really wants to consider municipalization, the business planning needs to get better fast. However, the minute we take municipalization off of the table, Boulder loses its leverage with Xcel, and there are still real issues that need to be resolved with them, too. Looks to me like City Council and staff have a lot of work to do in the next few weeks, or a great near-term opportunity for cleaner energy in Boulder could pass us by.
Boulder’s energy future has taken some interesting turns. First, the good news. Xcel Energy presented a proposal to the City Council that would allow Boulder to develop wind energy equal to 90% of city electrical usage. For those who have worked hard to put Boulder at the forefront of clean energy, this is a clear victory since, without the prodding of local energy activists and the support of City Council, Xcel would never have come up with this aggressive renewable energy plan. There are still issues that need to be resolved, such as how Boulder pays for the additional wind energy. But, if Boulder comes to terms with Xcel, we will again have pushed the boundaries of renewable energy use and, over time, reduced our, and America’s, reliance on fossil fuels. Great stuff.
However, Xcel’s offer has a ticking clock. If the City does not put some variant of the Xcel proposal on the ballot this November, the tax credits for the wind energy may expire and the cost will go up. So, if this is the best deal we are going to get, City Council needs to move on it now.
The bad news is that the City staff released their draft Business and Utility Development Plans for municipalization, and they were awful. In a column last month, I outlined three things that we should see in these Plans, and they failed to adequately address any of them.
First, I suggested that the City needs to be clear about the goal of municipalization, which was, I thought, a cleaner energy future. However, the Plans focus more on providing cheapelectricity than clean energy. They suggest that Boulder municipal electricity would cost about the same as electricity with Xcel, but there were glaring omissions in the initial cost analysis. For example, they did not include costs for Smart Grid and stranded costs, which everyone knows Boulder will owe, at least in part. Additional cost analyses were released this week that included some of these known costs, but City staff are not telling us how much and what costs are included in these revisions. Testimony before City Council made clear that these cost analyses were more of an opening position for negotiations with Xcel than a realistic cost baseline for Boulder voters. While that sort of gamesmanship may help Boulder’s lawyers, it won’t help Boulder’s citizens understand what electrical rates to expect after municipalization.
Worst of all, the cost analysis included no funding whatsoever for more local renewable energy production. None. While the City staff must demonstrate that they can provide electricity at rates comparable to Xcel, they also must give us a clear roadmap to achieving a sustainable energy supply, and it was simply not there. Bottom line – I see these Plans as a step backwards in convincing us that Boulder can provide either cleaner or cheaper electricity than Xcel.
Second, the City must tell us how they are going to build an organization that could pull off municipalization. Boulder voters may be asked to support a government bureaucracy taking over a critical element of city infrastructure, but virtually all of the critical organizational analysis was kicked off into the future. Before Boulder undertakes this complex endeavor, organizational questions need to be asked and answered. Bottom line – Boulder’s Plans for building the required organization was far too general and preliminary to be convincing.
Finally, the Plans must address the risks of municipalization. This is a risky endeavor and, yet, not a single paragraph addressing these risks was included in either the Business or Utility Development plans. Not one. Either no one has confronted the numerous technical, financial, and organizational risks the city would be facing, or they are not telling us about them. Bottom line – these plans don’t just give us the view with rose-colored glasses, they are blind to the many risks involved with Boulder taking over the electrical supply system.
All in all, the Plans released by Boulder caused more concerns than they resolved. If Boulder really wants to consider municipalization, the business planning needs to get better fast. However, the minute we take municipalization off of the table, Boulder loses its leverage with Xcel, and there are still real issues that need to be resolved with them, too. Looks to me like City Council and staff have a lot of work to do in the next few weeks, or a great near-term opportunity for cleaner energy in Boulder could pass us by.
