“One of the key elements that will ultimately determine how many millions of dollars will be spent cleaning up contamination that originated from milling operations once located on the City of Boulder’s 103-acre Valmont Butte property is whether or not adjacent properties were also contaminated by those operations.”

Read the entire article at the Boulder Weekly: Valmont cemetery families say city in danger of digging up human remains.

On Wednesday, Xcel Energy filed documents on outcomes at SmartGridCity in Boulder, Colo., that the utility argues justify additional cost recovery to the tune of at least $16.6 million.

Read the entire article at Intelligent Utility: SmartGridCity: Did Xcel get results?.

I was invited by the editors of the Blue Line to write this piece after they saw some of the comments I had written for a utility industry newsletter that’s been following Boulder’s initiative to form its own utility.   I must admit that I’m not familiar with all of the details and the history, but after spending nearly 40 years working in the electric business, I can offer a few insights.

The first thing to realize is that what we in the business call publicly-owned utilities are not a cure-all for the ills – real and perceived – of being served by a for-profit, or investor-owned, electric utility.  Research by the Lawrence Berkeley Laboratory shows that on average, there’s not much difference between the rates charged by investor-owned utilities and publicly-owned utilities though of course there are exceptions at both ends of the spectrum.  In some cases, local utility control leads to innovation and more responsive service as exemplified by the Sacramento Municipal Utility District, which serves Sacramento California, and Austin Energy, which serves Austin Texas.  In other cases, local utility control becomes enmeshed in city politics and utility revenues become a cash cow for the city, as is the case in Los Angeles, which has the largest municipal utility in the country.   Many of the country’s rural electric cooperatives are among the most risk-averse businesses you’ll find, while others have gotten themselves in financial trouble by taking on ancillary functions without understanding the businesses or the risks.

The second thing to realize is that a Boulder municipal utility will remain dependent on Xcel Energy for at least a decade and possibly longer.  Boulder will need Xcel’s transmission system to carry power from wherever it is produced, whether by fossil-fired plants, renewable energy plants or a combination of the two.  Since it sits squarely in the middle of Xcel’s Colorado electric grid, Boulder will need balancing services provided by Xcel’s fleet of power plants to ensure reliable service.  In all likelihood, Boulder will have to source at least a portion of its bulk power supply from Xcel for a period of time until other arrangements can be made.   Although this places Boulder in a less-than-ideal commercial position, the Federal Energy Regulatory Commission has issued a number of rules over the years that are intended to protect smaller utilities embedded in the service territories of larger ones.

A Boulder municipal utility will no longer be regulated by the Colorado Public Utilities Commission.  Instead, either the city council or a separate board will be responsible for management oversight, prices and terms of service.   On the positive side, a local regulator might be more willing to tolerate, or even require innovations that Xcel might be reluctant to go along with or the PUC might be reluctant to approve.  For example, some elements of the Smart Grid City idea could be implemented differently and at much lower cost.  On the other hand, local regulators could be more easily swayed by public opinion to take actions that negatively influence the municipal utility’s long-term viability.

Since the renewable energy content of electricity consumed by Boulder residents was a major issue in the decision to explore a municipal utility, it’s worth pointing out that electrons can’t be color-coded.   Renewable energy purchased from wind and solar farms enters the grid much like streams that enter a lake, and electricity withdrawn from the grid by business and residences behaves like streams that empty a lake.  There’s no way to direct the flow from one point to another without building expensive new transmission lines that neighbors don’t want anyway.  In fact, it’s entirely possible at least some of Boulder’s renewable energy could be purchased in Texas or portions of the Midwest that can’t physically deliver it to Boulder.   Consequently, Boulder residents need to get comfortable with the idea that the flow of physical energy out of a wind farm that has a contract with Boulder is separate and distinct from the flow of money to that wind farm.  Of course, renewable energy could also be purchased from solar panels on the roofs of homes and businesses in Boulder and wind turbines that feed directly into the Boulder distribution system, which would keep some of the money spent on renewable energy purchases in the community.

Forming and operating a municipal utility is a complex, time-consuming and potentially risky undertaking.  If it’s handled badly or if it’s done for the wrong reasons, consumers are going to see higher costs while failing to enjoy any benefits.   If it’s done well, the citizens of Boulder have an opportunity to pursue distinct environmental and policy objectives that a large utility with service obligations across Colorado cannot.  My advice to those of you reading this article is to educate yourselves and stay engaged with the process.

2011 election yard signs (Pat Shanks)

Election night 2011 was full of surprises.  The fact that some of the outcomes were surprising suggests many factors influenced voter behavior, and without detailed post-election polling, explanations have been at best speculative and at worst self-serving and emotional.  But with the certification of election results by the ad hoc City of Boulder canvassing board on Tuesday, November 15, we now have the final numbers to analyze.  This opinion article is intended to provide a fair analysis and interpretation of this important election.  It is based on the election outcome, first-hand observations, websites and election materials, council candidate forums, and long-term study of Boulder elections and politics.

Surprise number one in this election was the top-polling overall victory of Boulder City Council candidate Suzanne (Zan) Jones. Political veteran Jones (Environmental Advisory Board, Blue Ribbon Commission II on Revenue Stabilization, PLAN-Boulder County board member, Regional Director for The Wilderness Society) ran an excellent campaign with a strong focus on the issues, but it is still unusual for a first-time-candidate to gather the most votes for council.  The most logical explanation is that Jones is an engaging candidate and that her positions on the issues strongly appealed to the people of Boulder.  Her positions (zanjonesforcouncil.com) emphasize preserving what’s best about Boulder, creating a sustainable energy future, improving local and regional transportation, creatively enhancing our downtown area, and investing in our infrastructure.

Lisa Morzel, who is completing her twelfth year on council, finished strongly in second-place and now will serve another four years with a huge affirmation from the people of Boulder.  Morzel’s positions on the issues (lisamorzel.com) highlight progressive and environmental values, with strong emphasis on exploring municipalization as a pathway to clean reliable energy, creating new bikeways and crosswalks, developing our civic space at the St. Julien, acquiring and carefully managing open space, preserving “Section 16” to complete the Rocky Flats Wildlife Refuge, and creating the long-awaited north Boulder library branch.

Tim Plass, Planning Board member, former Landmarks Board member, and community activist finished in third place.  Plass supports many of the positions advocated by Jones and Morzel (plassforcouncil.org – now taken down).  All three of the top winners were endorsed by PLAN-Boulder County, the Sierra Club, the Daily Camera, and the Boulder Weekly.  All three are strong environmentalists, advocates of careful land-use planning, supporters of the Boulder municipalization issues (ballot measures 2B and 2C), and strong advocates for the Move to Amend ballot measure 2H (opposing corporate personhood).

Final election outcome

The second surprise of election night was the relatively weak showing of incumbents George Karakehian and Ken Wilson, who trailed Jones and Morzel by 2400-2900 votes (22-23%; see chart and table).  Incumbents are usually golden in Boulder and, whereas both retained their seats, it is striking that they were displaced from the top of the ticket by two newcomers with relatively low name recognition.  This is important.  Both Karakehian and Wilson have served well and are competent councilmembers, but both opposed 2B/2C as did the conservative groups who endorsed them (Boulder Area Realtors Association, Boulder Outdoor Coalition, and Boulder Chamber of Commerce).

Finishing significantly behind the electeds (1336 votes behind Wilson), Dan King’s campaign started strongly but faded in the end, perhaps due to his close ties with the Chamber, his opposition to the 2H issue, his opposition to dedicated taxes (like open space, recycling, and climate action), or his seeming ambiguity on 2B/2C.  Or perhaps Dan’s thin knowledge of city issues other than the budget came through in the long stream of forums and questionnaires.  Daniel Ziskin and Jonathan Hondorf came next, finishing ahead of 2-time candidate Fenno Hoffman.  King, Ziskin, and Hondorf are likely to be strong candidates in the next council election, if they choose to run again in two years.

It’s tempting to speculate that the 2B/2C victories lifted Jones, Morzel, and Plass to decisive victory, but the narrow margins of the municipalization issues suggests other factors were at play.  Rather, the high vote tallies of Jones/Morzel/Plass seem to be a confirmation of the vision of the current council, which includes supporting strong environmental action and open space conservation, careful development when it provides a distinct community benefit, a strong social services network, and encouraging innovative and locally-grown businesses.

Some have speculated that anti-incumbent sentiments influenced this Boulder election (Daily Camera, Nov. 3), but two outcomes argue against this hypothesis. The very strong showing by incumbent Lisa Morzel suggests the results are related more to the issues and positions championed by Morzel as opposed to the more conservative positions of the other incumbents, Wilson and Karakehian.  Further, the very weak showings by Mark Gelband and Thomas Johnston, both of whom were relentlessly critical of the current pathways chosen by Boulder leadership, shows that anti-incumbent sentiment is not important in Boulder at this time.

Boulder Clean Energy Business Coalition poster

The third surprise was the narrow victory and last minute surge of support for 2B (50.40%) and 2C (51.93%), which will enable further study and consideration of municipalization of our electrical energy supply.  These issues pitted liberals and environmentalists who believe in clean energy and local government against conservatives and others who argued that they have a better chance of influencing Xcel or the PUC (Public Utilities Commission, which regulates Xcel in Colorado) than their own elected officials.  As the campaign progressed, many voters were offended by the steady stream of distortions and half-truths that Xcel and its proxy (Boulder Smart Energy Coalition) produced. The anti-2B/2C groups spent at least $900,000 to protect the current regulated monopoly, about ten times the amount spent by the pro-2B/2C groups.

The Xcel message did not seem to resonate strongly in Boulder, but did accomplish its mission of scaring or confusing some voters, resulting in a very close final tally.  Even after the election was decided, representatives like Xcel-hired point-man David Miller stayed on message. “It looks to me like the voters are not endorsing municipalization,” he said. “It was presented as the passport to clean energy, and I don’t think there’s any sort of resounding endorsement of that.”

Perhaps a primer on how democracy works is in order, but I guess Xcel has already received that.  The election outcome, with both 2B and 2C passing, and 2H passing by an overwhelming margin (73.79%), shows that Boulder residents still possess highly functional BS detectors.

Significant credit needs to be given to our local newspapers (Boulder Weekly, Daily Camera, and Denver Post), who stood up to intense pressure and endorsed the municipalization ballot measures.  The narrow passage of 2B/2C with a strong surge at the end was clearly lubricated by incredibly intense and effective campaigning all the way to the end.  This effort was led by New Era Colorado and the Boulder Clean Energy Business Coalition.  Volunteers from RenewablesYes and the Sierra Club participated in a massive and successful get-out-the-vote campaign at the end, which produced a last minute surge that carried 2B/2C over the top.  The challenge of the municipalization issues was educating the voters, and the margin would probably have been larger if the clean energy campaign had had the resources to reach more voters.

The most important take-home message of this election is that Boulder voters are happy with the city and support the direction the City Council has taken us in the last four years.  Boulder citizens want our city to be a national and international leader in drastically reducing greenhouse gas emissions, and they believe that municipalization may be our best chance to achieve that goal.  But issues of Open Space conservation and environmental preservation, and a careful, measured approach to development should not be underestimated as issues that propelled the top 3 vote-getters.

Bavarian Solarpark (Wikimedia Commons)

Almost immediately after we empowered Boulder to form a utility, a spate of articles appeared in the national press talking about the relative costs of coal and renewables, and the trends in those costs. There was Krugman’s Here Comes Solar Energy Op-Ed in the NY Times, making the case that solar PV is already cheaper than coal-fired power once you remove all the subsidies we provide to both of them, and calling for the feds to fix regulation to make that clear. Boulder’s own RMI had a bit of commentary on Krugman’s opinion: it’d be nice if federal regulations were saner, but even without that fix, it makes sense to build this stuff now, and will only make more sense as time goes on and the balance of system costs (which currently make up 50% or more of the cost of a PV installation) are reduced through best practices, standardization and mass production.

From the industry side, GE’s Jeff Immelt also said that federal regulation was a little beside the point now… and that even without government support GE was going all-in, expecting something like 200GW of solar to be built in China and India by the end of the decade. That’d be a non-trivial amount of generation, on the order of 10 Three Gorges Dams, or as much power as the entire US nuclear generation fleet. Meanwhile NRG Energy, a nationwide and largely traditional fossil-fuel based independent power producer is planning to spend the overwhelming majority of its capital investment funds over the next few years on solar, mostly small utility projects (20-100MW) and distributed rooftop generation.

In the same vein, Xcel Energy’s recently filed 2011 Electric Resource Plan foresees essentially no new generation facilities being built until close to the end of the decade. Some of this is attributable to the soft economy, but many people are saying it’s just as much a consequence of energy efficiency, demand side management, and increasing distributed (behind-the-meter) generation coming on line. Unfortunately, Xcel’s Comanche 3 power plant added 750 megawatts of coal generation to the Colorado grid last year, and this lack of demand for more energy means the company is now walking away from the transmission lines that would have enabled large-scale solar-thermal with storage in the San Luis Valley. This means that the only way to shift Xcel’s power mix in the near future will be to accelerate the retirement of existing coal-fired generation, making room for more efficiency, wind, and solar.

The optimistic narrative that falls out of the articles above — that our energy systems are undergoing a transformation — seems plausible, and I hope that it’s true. Certainly it’s the one that the Boulder Light and Power effort is going to be built around. It’s comforting to see that we’re not alone on the world stage, and less daunting to imagine our job as facilitating an ongoing transformation, rather than starting one from scratch.

The Boulder vote should send a message to utilities around the country as well as other communities that are tired of inaction on climate goals. In Colorado, while Xcel is on track to have 25% renewable energy in their portfolio by 2020 (a commitment which has positioned them as the nation’s leading utility for wind power) they also just completed a new 750 MW coal plant that will be producing energy well into 2060. Boulder voters saw no reason to saddle their grandchildrens’ generation with technology that was developed by their great grandparents.

Read the entire article at The Energy Collective:  Case Study: Boulder Colorado Takes Action On Climate Change.

Distributed power generation at the point of load such as solar panels on roofs minimize the need for transmission lines in contrast with huge centralized power plants. Xcel owns both transmission lines and power plants, so alternatives such as Community Choice Aggregation (CCA) where Boulder could buy clean power from non-Xcel sources without buying Xcel’s transmission lines have not been authorized.

Read the entire article at Denver Green Streets:  Power To The People: Boulder’s Struggle for Local Control.

Many Americans these days, from the huddled masses of Occupy Wall Street to the coifed confines of the presidential campaign, are talking about the future of capitalism.  Here, that debate is focused on electricity, specifically whether this city should, in Tuesday’s election, sever its relationship with a corporate utility and move toward a home-ruled, municipally owned one that would be environmentally greener and locally accountable.

Read the entire article at the NYTimes.com:  Boulder Seeks to Take Power From the Power Company.

On the pro-side, the groups Citizens for Boulder’s Clean Energy Future, Campaign for Local Energy, Boulder Smarter Energy Coalition, the Sierra Club, and PLAN-Boulder have spent $91,623 promoting 2B & 2C.

Today’s filing was the last one required before the election.  All of the expenditure and contribution filings are available for review at the city’s election page.

Your ballot must be received by the Boulder County Clerk by 7:00 p.m. election day, November 1. Drop off sites in Boulder include:

• County Clerk & Recorder Office, 1750 33rd Street
• Boulder County Courthouse, 1325 Pearl Street
• University of Colorado Recreation Center

Check the county website for drive-by drop off times.

If you have not received a ballot, contact the Boulder County Clerk  at 303-413-7740.  You can check to see that your ballot was received at the County Clerk’s website.

October 24, 2011

Dear Mr. Eves –

Thank you for taking the time to send Boulder voters a letter detailing Xcel Energy’s opposition to ballot measures 2B and 2C. I typically don’t send letters of thanks to those who waste ink & paper to fill my mailbox with threats, pseudo-truths, & baseless supposition. However, as a previously undecided voter on the question, your note helped me cast my vote in favor of 2B/2C this afternoon without trepidation.

Now, Mr. Eves, I appreciate that, as an officer of Xcel Energy, you are duty-bound to act in the interest of your shareholders, but, that does not absolve you of the responsibility to be up-front with your customers or afford you license to play fast & loose with the truth. Your claims that 2B and 2C necessarily incur or somehow constitute a “hostile condemnation process in the courts” involving “years of litigation” are simply not true – they are baseless supposition at best. In fact, I see the situation as quite the opposite: Xcel controls whether this process would go smoothly or be mired by what you describe as “litigation and uncertainty” simply by the level of cooperation the Public Service Company of Colorado (PSCo) exhibits (or chooses not to) in divesting distribution & generation assets at a fair market value. Or, on the other hand, PSCo has sole discretion in making these threats a reality by acting in a retaliatory manner by inflating sale prices, throwing forth technical barriers, and complicating demarcation to try and retain control of grid assets or mire the municipalization process in costs, delays, and negative press.

However, that, or any other red herring – be it costs, Xcel’s claimed progress towards renewables, or fancy glossy marketing materials & slogans from Xcel aren’t what cast my ballot for me. These are all distracting accoutrement adorning the core of the issue: Xcel Energy is responsible, by nature, to its shareholders and the profit motive. Intrinsically, there is nothing wrong with this notion. In fact, as a shareholder of many corporations, former employee of a major corporation, and a founder of my own, I truly appreciate that idea. But, I also appreciate the deeper implications it has for energy policy in Boulder. I’m not interested in the fancy portmanteau named programs Xcel has touted as “innovative” in renewable capacity (many of which were done in part or in whole to meet state or Federal mandated generation-mix or clean-air requirements, I might add). I’m also not convinced by Xcel’s claims, graphs, and thick glossy-stock printed collateral boasting a “proven track record” in renewable energy. Instead, as an astute investor, businessman, and shareholder, I’m particularly swayed by certain facts gleaned from your annual report, balance sheet, and investments, which frankly speak louder to the issues than any letter you might send my way (speaking directly to facts that Xcel has largely kept off their talking points prompter on the issue, for obvious reasons!).

Anyway you slice it, Xcel is “big coal”, and has not been “responsible” by Boulder customers (let alone nature). Xcel’s 2010 SEC 10-K filing demonstrates that the PSCo enjoyed a 19% improvement in diluted earnings per share. Of course, the informed voter will not be surprised that this is the case, since Xcel fought for (and was awarded) the nation’s 2^nd highest electrical rate increase (21.4%) in 2010. The story becomes even more sordid when you recall that the primary justification for this rate increase to the PUC was a $1.3 billion expenditure to construct the brand-new Comanche 3 coal-fired plant and the conversion of a former nuclear facility to fossil-fuel based generation.

This is not the picture of the clean and renewable-centric Xcel your corporation has spent millions trying to portray, is it?

There are so many more examples of how the entire gamut of Xcel’s asset mix, investment posture, and business model demonstrate that Xcel is neither committed to renewables nor interested in any other goal than protecting their profit motive and their shareholders’ pecuniary interest (either in Boulder, in the PSCo, or across their entire portfolio of businesses, distribution infrastructure, or generating capacity). In reality, the facts (and history) confirm an even more disappointing outcome: Xcel (and the PSCo) will act in its own pecuniary interest and do only what they must when their feet are held to the (coal) fire to demonstrate a (token) shift to renewables, and not only do they remain firmly encamped in coal country, but they continue to lay deeper foundations there, too. But, I won’t waste your time (or any more paper) waxing poetic about the story the actual numbers tell themselves (I’ll believe an audited 10-K filing over glossy inserts in my Xcel bill/from an Xcel funded PAC any day, by the way).

Instead, I’ll leave you with this thought: after being bullied & threatened by your letter and the various “citizens groups” Xcel has funded to the tune of nearly $250,000.00 (at last count – the number invariably will continue to tick upwards in the final days of the campaign), I’m left with solid confirmation that our energy future is not well-cared for in your hands and should not be in the hands of your corporation. Xcel’s values & conduct in the past decade in how it has done business and, more recently, with how it has approached the 2B/2C question has given me pause and reason to be excited to see even an inefficient, bumbling, and slow government entity take the reins (although I truly believe the City of Boulder can do much better than that and isn’t nearly as incompetent has Xcel has painted them to be!).

Again, Mr. Eves, thank you for clearing the air on these ballot issues – it helped me do something “Responsible by Nature” and vote to find a way to put more naturally responsible leadership in place for my utility needs.

Sincerely,

Basit Mustafa
Boulder, CO Meter #17B782800A