Xcel Energy, Boulder, Colo. officials agree to potentially end city’s municipal utility plan

Published on July 30, 2020 by Kim Riley

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Xcel Energy Inc. and local officials in Boulder, Colo., on Tuesday reached a tentative deal that could end the city’s decade-long municipalization effort.

“We’ve always believed we could accomplish more by working together and we’re pleased to have reached an understanding that supports both Xcel Energy’s vision to deliver carbon-free electricity to customers by 2050 and achieves Boulder’s own clean energy goals,” said Alice Jackson, president of Xcel Energy’s Colorado division. “We look forward to continuing to serve our Boulder customers and exploring ways to enhance our clean energy strategy.”

If approved, the agreement also would cement carbon emission caps, enable innovative grid and clean generation projects, and target collaborative efforts to improve Colorado regulations on renewables, according to Boulder city staff.

“The settlement we are bringing forward today is the culmination of decades of community-led activism to build an energy future that’s better for our planet and our community,” Boulder Mayor Sam Weaver said on July 28. “We have the opportunity to secure in this agreement historic changes in the relationship between the community and its energy provider.”

Minneapolis-based Xcel Energy is a publicly traded utility holding company that serves more than 3.3 million electric customers and 1.8 million natural gas customers in Colorado, Minnesota, Michigan, Wisconsin, North Dakota, South Dakota, and New Mexico as of 2017.

Currently, in Colorado, 30 percent of the company’s energy comes from renewable sources, and through collaboration with the State of Colorado during the 2019 legislative session, Xcel says the trajectory to achieve the 2030 target of 80 percent carbon reduction is well underway. The company plans to bring forward plans to achieve that carbon reduction goal next spring.

In Boulder, the tentative agreement also could result in a new franchise agreement, as well as several other contracts between the city and Xcel Energy that could help them both achieve multiple goals, city staff said.

For instance, a key element of the proposed 20-year franchise agreement is the right for Boulder to resume municipalization efforts at the five-, 10- or 15-year anniversaries for any reason, and in 2023, 2025, and 2028 if Xcel Energy fails to meet specified emission targets, according to city staff.

The proposal also would preserve Boulder’s ability to create a local electric utility in the future by reducing future potential litigation.
“We hope to share what we learn with communities across the state and beyond Colorado,” said Jackson. “We appreciate Boulder’s leadership and dedication to achieving these ambitious environmental goals.”

Another deal component is a pathway for Boulder to achieve 100 percent renewable electricity by updating its electric grid, and sharing data and developing demonstration projects under the guidance of a community board, said city staff, who noted that both parties have committed to collaborate on changing current regulations that would limit innovation and local renewable development.

“Boulder, a small city that thinks big, has long strived for a clean community energy system that shares our values,” said the mayor, “and I want to thank Xcel Energy for their willingness to grow and improve as a company through working with us.”

Negotiations between Boulder and Xcel Energy began in April, with the city providing much of the community input that was expressed during a simultaneous public engagement process, which included four virtual listening sessions in June attended by nearly 200 community members.

Boulder City Council members received a briefing on the agreements during their July 28 meeting and plan to discuss them again on Aug. 4. A second reading of the agreements and a public hearing are scheduled for the council’s Aug. 18 meeting. If City Council members vote to place the proposed franchise agreement on the fall ballot, then voters will determine its outcome.

The franchise agreement also must be approved by the Colorado Public Utilities Commission, which city staff expect will consider it soon after potential voter approval.