{"id":9328,"date":"2011-12-04T11:34:32","date_gmt":"2011-12-04T18:34:32","guid":{"rendered":"http:\/\/www.boulderblueline.org\/?p=9328"},"modified":"2011-12-23T15:26:59","modified_gmt":"2011-12-23T22:26:59","slug":"boulders-municipalization-prospects-an-outside-perspective","status":"publish","type":"post","link":"https:\/\/www.boulderblueline.org\/?p=9328","title":{"rendered":"Boulder’s Municipalization Prospects: An Outside Perspective"},"content":{"rendered":"

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I was invited by the editors of the Blue Line<\/em> to write this piece after they saw some of the comments I had written for a utility industry newsletter that\u2019s been following Boulder\u2019s initiative to form its own utility.\u00a0\u00a0 I must admit that I\u2019m 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.<\/p>\n

The first thing to realize is that what we in the business call publicly-owned utilities are not a cure-all for the ills \u2013 real and perceived \u2013 of being served by a for-profit, or investor-owned, electric utility.\u00a0 Research by the Lawrence Berkeley Laboratory shows that on average, there\u2019s 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.\u00a0 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.\u00a0 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.\u00a0\u00a0 Many of the country\u2019s rural electric cooperatives are among the most risk-averse businesses you\u2019ll find, while others have gotten themselves in financial trouble by taking on ancillary functions without understanding the businesses or the risks.<\/p>\n

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.\u00a0 Boulder will need Xcel\u2019s transmission system to carry power from wherever it is produced, whether by fossil-fired plants, renewable energy plants or a combination of the two.\u00a0 Since it sits squarely in the middle of Xcel\u2019s Colorado electric grid, Boulder will need balancing services provided by Xcel\u2019s fleet of power plants to ensure reliable service.\u00a0 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.\u00a0\u00a0 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.<\/p>\n

A Boulder municipal utility will no longer be regulated by the Colorado Public Utilities Commission. \u00a0Instead, either the city council or a separate board will be responsible for management oversight, prices and terms of service.\u00a0\u00a0 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.\u00a0 For example, some elements of the Smart Grid City idea could be implemented differently and at much lower cost.\u00a0 On the other hand, local regulators could be more easily swayed by public opinion to take actions that negatively influence the municipal utility\u2019s long-term viability.<\/p>\n

Since the renewable energy content of electricity consumed by Boulder residents was a major issue in the decision to explore a municipal utility, it\u2019s worth pointing out that electrons can\u2019t be color-coded.\u00a0\u00a0 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.\u00a0 There\u2019s no way to direct the flow from one point to another without building expensive new transmission lines that neighbors don\u2019t want anyway.\u00a0 In fact, it\u2019s entirely possible at least some of Boulder\u2019s renewable energy could be purchased in Texas or portions of the Midwest that can\u2019t physically deliver it to Boulder.\u00a0\u00a0 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.\u00a0 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.<\/p>\n

Forming and operating a municipal utility is a complex, time-consuming and potentially risky undertaking.\u00a0 If it\u2019s handled badly or if it\u2019s done for the wrong reasons, consumers are going to see higher costs while failing to enjoy any benefits.\u00a0\u00a0 If it\u2019s 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.\u00a0 My advice to those of you reading this article is to educate yourselves and stay engaged with the process.<\/p>\n","protected":false},"excerpt":{"rendered":"

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\u2019s […]<\/p>\n","protected":false},"author":860,"featured_media":9330,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,4],"tags":[45,162,351,344,513,101],"class_list":["post-9328","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-opinion","tag-energy","tag-municipalization","tag-puc","tag-smart-grid","tag-utility","tag-xcel"],"_links":{"self":[{"href":"https:\/\/www.boulderblueline.org\/index.php?rest_route=\/wp\/v2\/posts\/9328","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.boulderblueline.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.boulderblueline.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.boulderblueline.org\/index.php?rest_route=\/wp\/v2\/users\/860"}],"replies":[{"embeddable":true,"href":"https:\/\/www.boulderblueline.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9328"}],"version-history":[{"count":10,"href":"https:\/\/www.boulderblueline.org\/index.php?rest_route=\/wp\/v2\/posts\/9328\/revisions"}],"predecessor-version":[{"id":9338,"href":"https:\/\/www.boulderblueline.org\/index.php?rest_route=\/wp\/v2\/posts\/9328\/revisions\/9338"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.boulderblueline.org\/index.php?rest_route=\/wp\/v2\/media\/9330"}],"wp:attachment":[{"href":"https:\/\/www.boulderblueline.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9328"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.boulderblueline.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9328"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.boulderblueline.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9328"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}