Boulder Votes to Start Divorce Proceedings Against Xcel
Colorado had its election day last Tuesday, November 1, 2011. By the slimmest of margins, the City of Boulder approved local energy ballot measures which will enable the city to continue exploring municipalization of the electric service. The proposal consisted of two measures. The first proposal authorizes the creation of a municipal utility (if customer rates would be the same as those Xcel Energy is charging at the time of acquisition). The second proposal authorizes the provision of the funds required to determine the actual costs of buying Xcel’s system and starting a local utility. The first measure passed with 51.78 percent of the total vote and the second measure passed with 50.27 percent. Boulderites seem to be almost divided in half about the proposals – not quite a ringing endorsement for municipalization or for Xcel.
There is a long and storied history leading up to the ballot proposals. A simple Google search of “SmartGridCity” garners a list of articles with titles such as: “SmartGridCity is a Smart Grid Flop”, “Smart Grid: Power Struggle Erupts in SmartGridCity”, “SmartGridCity Meltdown: How Bad Is It?”, “Xcel’s SmartGridCity: Impressive Pioneer or Epic Failure?”, “Ratepayers on Hook for Xcel’s $44.5 Million SmartGridCity”, and “Boulder Prepares to Wash Its Hands of SmartGridCity”. Xcel found out the hard way being a pioneer is risky. Here it lead to underestimates. Still, take $44.5 million and divide it amongst the 1.4 million ratepayers and the result is approximately $32 per customer. Given current and future benefits, it seems like a valuable project. I’m sure innovation played a role in Xcel underestimating the cost to create the SmartGridCity. I wonder if everyone would have considered the SmartGridCity project of the year if the original estimate were $50 million?
The City of Boulder in a press release on November 2, 2011, advised that its next steps will be to “lay the groundwork for additional engineering work, start negotiations with Xcel and determine what steps can be taken in the meantime to help the community achieve its goals.” The City also advised that “the vote does not mean that municipalization is imminent. A decision about whether to form a local electric utility has yet to be made.” Xcel has warned that Boulder is out of its depth and that the city has vastly underestimated the costs and complexities of running its own system. Xcel has also warned that it will fight to stop the project and that Boulder has significantly underestimated the hefty cost of its infrastructure and lost revenue.
The City believes it will take three to five years to make a decision to municipalize or not. Perhaps by then the SmartGridCity benefits will be in full swing and Boulder and Xcel can live happily ever after.