Guest Opinion: Power on Our Terms

{ July 20th, 2011 }

By Jason Wiener and Ted Rose
Posted: 07/19/2011 01:00:00 AM MDT

Tonight, City Council will take an initial vote to authorize the creation of Boulder`s own electricity utility. Our companies have joined the Boulder Clean Energy Business Coalition to assist the city and the public in evaluating options for our utility future. With the right approach, the city can create a local solution that will benefit our community and offer a model for others around the state and the country.

For months, Boulder and Xcel Energy have explored ways to pursue that future together. The city remained clear about our community`s aims: ensure a reliable energy supply; control consumer costs; reduce carbon emissions while promoting economic development and local control.

Just weeks before the city`s deadline for ballot questions, and six weeks after the deadline for submitting a proposal, Xcel presented an ambitious proposal to build a new wind farm on Boulder`s behalf. The proposal called for a 200 megawatt wind farm in southeast Colorado along with a 20 year binding contract. Xcel withdrew that proposal last Thursday, but before it did, the Boulder Clean Energy Business Coalition completed an analysis of the plan. The complete analysis on our website (boulderdecides.com) and we felt it was worthwhile to summarize our perspective here.

The Xcel proposal would have allocated the electricity from the wind farm to Boulder`s energy mix through the purchase of renewable energy credits (RECs) generated by the wind farm. By offsetting natural gas generation, the wind farm would have resulted in reductions in carbon emissions attributed to Boulder and a slight reduction in the carbon emissions of Xcel`s energy fleet.

While these are positive outcomes, there were also significant risks in the proposal for Boulder ratepayers. Xcel would determine when to curtail electricity production at the wind farm because of reductions in overall energy demand across the Xcel territory yet Boulder`s ratepayers would be financially responsible for that curtailment when it happened. The proposal would have locked the city in to a single energy contract for the next 20 years, reducing the city`s flexibility to respond to changing market conditions. The deal could have presented Boulder with significant financial risks if the price of energy fell substantially. While city staff attempted to mitigate those risks in negotiations with Xcel, they were unable to achieve an agreement.

The proposed agreement would not have addressed energy efficiency, increased solar deployment or local economic development – all established city objectives. Furthermore, the agreement with Xcel would have increased consumer bills, which runs directly counter to the stated objectives of the city council.

We believe the city is evaluating options with a careful, considerate approach to ensure that we move forward prudently. The city has been studying the technical, legal and financial aspects of a local utility for the better part of five years. Xcel presented an intriguing, but rushed proposal, and then abruptly withdrew it. That`s not the type of predictable and reliable behavior we need from our utility partner.

The ballot question to be introduced tonight will allow us to take the next steps to explore creating our own utility but it will not commit us to any particular path. The proposed ballot language will provide the city with the flexibility it needs to protect Boulder`s citizens: we could decide to renew an Xcel Energy franchise, go back to the negotiating table to hammer out a deal similar to the 200-megawatt wind deal or continue with our current service from Xcel without a 20-year commitment, or if the conditions are right — form a municipal utility as 29 other municipalities in Colorado have done. In the coming weeks the Boulder Clean Energy Business Coalition will offer an analysis of the proposed city`s plan.

In short, we believe the city is motivated by the right goals moving forward. We know the ways in which our children consume and produce energy will be much different than today. We support the city`s careful, considerate approach in crafting an energy future for Boulder`s next generation.

Jason Wiener is Co-Owner/General Counsel – Namaste Solar; Ted Rose is Managing Partner — Gravity Renewables. They are part of the Boulder Clean Energy Business Coalition (boulderdecides.com) which is composed of business community members interested in a sustainable energy future.

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