Relationship between Boulder, Xcel uncertain after municipalization vote

Boulder, Colo., November 7, 2011 — The relationship between the city of Boulder, Colorado and Xcel Energy, which has historically spawned smart grid and renewable energy partnerships such as the SmartGridCity project, was called into question last week after Boulder voters approved two measures that could lead to the creation of a municipally owned electric utility.

Both ballot initiatives passed rather closely. Boulder Question 2C passed with about 51 percent of the vote. The companion measure, Issue 2B, passed with a margin of about 141 votes.

Boulder’s city manager, Jane Brautigam said the vote does not automatically mean municipalization, adding that a final decision is still as far off as a half decade into the future.

Xcel Energy said that the vote is merely one step in a long process, adding that Boulder might not be able to meet the rate parity measures mentioned in the ballot initiative’s language. Before a municipal utility can be arranged, rate parity is one condition that must be satisfied to protect consumers from price fluctuations, according to Xcel.

“We remain skeptical that Boulder will be able to meet the terms of the initiative and match our rates, let alone match the level of renewables we provide,” according to a release from Xcel.

Xcel spent about $1 million in a campaign against the ballot measures, also saying that the company does not wish to sell the assets it has constructed in Boulder.

A series of events from last year kicked off the debate over forming a municipal utility. In summer 2010, Boulder’s city council voted against renewing a 20-year franchise agreement with Xcel Energy. In August 2010, the CEO of Xcel, David Eves said that the Boulder-based smart grid experiment, SmartGridCity, would not be continued or expanded.

Xcel invested nearly $45 million in SmartGridCity — an amount roughly triple the project’s estimated cost at its outset.

Xcel attempted to work with the Colorado Public Utility Commission on a proposed rate increase to recover these cost, but the city of Boulder withdrew its initial support for this bid.

To reach a conclusion for this problem, the two parties will have to take their cases before the Federal Energy Regulatory Commission to determine who is responsible for the money spent so far. Boulder and Xcel have already submitted their findings to FERC, according to reports.

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