Xcel Energy’s recent letter to Boulder ratepayers included several significant mischaracterizations and thinly veiled threats. Contrary to its intentions, the letter confirms that our community is right to be moving towards a separation with Xcel.

Last fall, Boulder voters narrowly passed ballot initiatives 2B and 2C. The initiatives came in response to Xcel’s continuing commitment to coal-fired electricity, inability to bring on renewable energy at a sufficient level and ongoing rate increases. Furthermore, decisions last year to make public participation at the Public Utilities Commission (PUC) — the government agency that regulates the monopoly utility — even more difficult, demonstrates the need for a transparent and democratically accountable alternative. The city now has the authority and funding to move forward with the creation of a municipal utility, but only if we can do so while meeting criteria meant to safeguard costs, reliability and environmental objectives.

In the letter, Mr. David Eves, CEO of Xcel Energy’s Public Service Company of Colorado, mentions that, as a result of last fall’s election, we will see an additional 2 percent added to our electricity bill, about one dollar per month for an average household. Mr. Eves neglects to mention that Xcel initiated its own rate increases over the past year that amounted to an increase of four dollars per month for an average household. It is Xcel — not our city’s consideration of a municipal utility — that is the most significant source of rising rates.

In fact, Xcel’s rates have gone up 20 percent in the last four years, largely due to increasing costs associated with fossil fuels. In 2009, Xcel opened the largest coal-fired power plant in Colorado, costing almost a billion dollars. Yet Xcel has seriously underestimated the costs of coal. According to Xcel’s own data, coal costs have risen much faster than its projections: increasing 5-10 percent each year, not less than 2 percent per year as typically projected by Xcel. But it is ratepayers, not Xcel, who carry the risks of this imprudent decision. While Xcel is guaranteed a staggering rate of return on that billion dollar coal plant, we the rate payers will be left to pay the rising cost of coal to fuel it.

In an era of corporate welfare and bank bailouts, this is yet another concrete example of a corporation socializing its risks, while privatizing its profit. A local municipal utility — one that is democratically accountable to its ratepayers — will serve Boulder better than a perversely regulated corporate monopoly.

Just as it did days before last November’s election, Xcel implied in its recent letter that it will punish Boulder by excluding ratepayers in our city from renewable energy and efficiency programs. But as long as Boulder remains with Xcel, it would be illegal for the monopoly utility to discriminate against Boulder. Both the city attorney and a PUC spokesman have clarified the illegality of such action. It is, quite transparently, a bully’s scare tactic.

Mr. Eves concludes by saying that Xcel would like to continue to serve Boulder. In exchange for that service, the company takes about $10 million in profits out of Boulder every year. No doubt, this profit is a sufficient incentive and one that Xcel appears to feel entitled to. In fact, the prospect of losing Boulder compelled Xcel to fight an aggressive campaign against 2B and 2C last year. Opponents of the initiatives spent nearly $1 million, 10 times the amount of proponents. Over 99 percent of that $1 million came directly from Xcel.

Mr. Eves is speaking out of both sides of his mouth. On the one hand, he is saying that Xcel wants to be Boulder’s friend and “continue to serve” Boulder. On the other hand, his company has threatened to eliminate renewable energy programs in Boulder and says that “the time to negotiate” is over, thus making contentious court proceedings likely. All of this bears a striking resemblance to the behavior of an abusive partner at the end of a relationship: “Stay with me, or I will make your life miserable.” Of course, that provides the most striking evidence yet that the partner never did have your best interests at heart. Such is the case with Xcel Energy. Xcel has the discretion and the resources to make this split as amicable and as painless as possible. Their decision to pursue the opposite approach counts as confirmation that separating from Xcel is in our community’s best interest.

Kate Clark and Brian Bernhardt live in Boulder.

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