City of Boulder, Colo., Xcel Energy revise franchise, partnership agreements

Published on August 19, 2020 by Kim Riley

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Xcel Energy Inc. and the City of Boulder, Colo., on Aug. 18 released slightly revised franchise, settlement and partnership agreements that address myriad community concerns regarding the city’s local power plan and the investor-owned utility’s future operations in Boulder.

According to the Boulder City Council, the main changes in the agreements include a modification to the franchise opt-out provision based on specific climate goals. The provision now includes all greenhouse gases as measured by carbon dioxide equivalents. The prior agreement referred only to carbon dioxide.

Xcel Energy and the city also agreed to allow the City Council and/or Boulder voters up to 16 months to decide whether to exercise the greenhouse gas opt-out provision — a change from the prior agreement, which allowed for 30 days. All franchise opt-out provisions — both discretionary at the five-, 10-, and 15-year anniversaries, as well as the greenhouse gas emission standards — also have been clarified, according to council staff.

Additionally, the settlement agreement was modified to allow the city to use Xcel Energy’s distribution poles to implement a municipal broadband system if the city chooses to do so at a later date. The prior settlement agreement provided no such provision for broadband connected to poles, but did enable broadband in common underground trenches, according to city staff.

Xcel Energy also will allow the election process to proceed without directly intervening in a campaign, including this fall’s election to approve the franchise or any election to terminate the franchise based on emissions targets in 2022.

The partnership agreement also was modified to permit Boulder to receive reliability data using the System Average Interruption Duration Index (SAIDI) and the System Average Interruption Frequency Index (SAIFI), as well as other measures of reliability, city staff said.

On Wednesday, the Boulder City Council released a summary of responses to its request for proposals (RFP) to provide power supply and financing for a potential city-run electric utility.

The city said it received two bids that could fulfill all the power supply requirements of a local electric utility that would achieve its 100-percent renewable electricity by 2030 target.

The city also received additional bids for individual solar, wind and battery storage projects that could supply a municipal electric utility or could be developed in partnership with Xcel Energy.

According to initial analysis, these bids are consistent with the pricing received in responses to the city’s 2018 Request for Indicative Pricing,” according to a statement from city staff, which said it “is conducting additional analysis of the bids and plans to conduct interviews with the respondents in September to learn more.”

Staff added that the responses to the RFP are confidential to protect the proprietary information provided in the bids. “As the city continues its analysis of the bids, the city will provide more information when possible,” according to the statement.

The city’s RFP, released late last month, sought bids to help it determine details for the electric utility, including the cost to purchase power from one or more independent power suppliers; the percentage of renewables a city-run electricity could achieve on day one of operations, and by 2030, when the city seeks to achieve 100-percent renewable electricity; and opportunities to participate in community-scale renewable power.

The city also sought financing mechanisms to help the city complete municipalization that could include financing for work leading up to the community vote, and/or financing for start-up costs, separation costs, and costs to purchase the necessary electric distribution infrastructure from Xcel Energy, dependent upon voter approval.

“A core focus of this phase of the city’s municipalization work is determining key details of the costs and benefits of a local electric utility prior to the community decision,” according to the City Council’s statement.

This work parallels the Boulder City Council’s process to evaluate its potential settlement agreements with Xcel Energy and the council is holding a public hearing during a special meeting Aug. 20.

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.