Frequently Asked Questions
Municipalization is a complex topic. Click on the drop-down menu below to read about these issues relating to Energy Future.
The Boulder Energy Future team is actively exploring ways we can shift the source of our electricity from fossil fuels to renewable resources—and reach our climate goals faster. This work includes municipalization, developing the city’s solar and electric vehicle strategies, state policy work and collaboration with other communities.
In December 2016, Boulder City Council approved a new set of climate and energy goals. The four principle goals are:
Information on sub-goals and progress indicators is available in the Dec. 6, 2016 City Council Memo .
Boulder’s Climate Commitment framework describes the myriad methods the city is using and plans to use to meet these goals. Broadly, the pathway to reaching 80 percent emissions reduction by 2050 includes transitioning our electricity generation away from fossil fuels like coal and natural gas to renewable sources like wind, solar and hydro. The city is also working to make our residential and commercial buildings more efficient and expand “clean mobility” options. Finally, community support and technological advances will play an important role.
According to the city’s 2015 Greenhouse Gas Emissions Inventory , electricity generation comprises 52 percent of the city’s emissions. This makes electricity generation a powerful lever to reduce our emissions: transitioning from coal and natural gas to wind and solar will play a big role in the city reaching its climate and energy goals.
Municipalization is the process of operating a local city-run electric utility. If completed, Xcel Energy would no longer be the electric utility for customers in the city; the City of Boulder would provide electric service to its customers.
Building on years as a community concerned with environmental issues, the people of Boulder determined that forming a local utility could provide an opportunity to decarbonize their energy source, increase resident participation in democratic decision-making regarding their use of electricity, and decentralize their energy source through expanded distributed generation. The city envisions meeting its residents’ needs by supplying clean energy through a utility of the future – one that is responsive to local conditions, resilient in the face of natural disasters, and as innovative as a community full of start-ups, scientists and educators could desire.
No. The city's municipalization effort is only seeking to create a local electric utility. If completed the city would become the elctric provider, but Xcel would remain the natural gas utility for Boulder.
A municipal electric utility is an electricity provider run by the city. 29 cities in Colorado are served by municipal electric utilities, including Longmont, Fort Collins and Colorado Springs.
Customers of Xcel Energy don’t have a lot of control over how their energy is produced. In 2016, Xcel Energy produced over 70 percent of its electricity using fossil fuels and less than 30 percent with renewables. Municipal electric utilities in Colorado are permitted to choose how their power is generated. If the City of Boulder became a municipal electric utility, the city could determine its generation mix, which would likely include a higher percentage of renewables than currently power the city. This would help reduce the city’s carbon footprint.
Municipal electric utilities also develop their own programs. A city-run utility could choose to offer more programs that encourage growth of local solar and energy innovation. It’s possible that the city would develop programs that further reduce the community’s greenhouse gas emissions.
Yes. In fact, the city has always explored several other avenues and remains open to other pathways. These include:
- Forming a partnership with our current utility, Xcel Energy , to develop programs and opportunities to support progress towards Boulder’s energy and climate goals.
- Working on policy changes at the state and federal levels . For example, the city has explored ways to reduce regulatory barriers, create opportunities for clean energy development, require higher Renewable Energy Standards and support municipal efforts to expand clean energy.
In the meantime, the city has developed and implemented dozens of programs to reduce emissions through processes we control. Learn more in the city's September 2017 Climate Action Brochure.
Other cities with municipal electric utilities have experienced the following benefits:
- Freedom to choose how our electricity is generated
- Ability to develop programs and services unique to Boulder—ones that can support our clean tech entrepreneurial community, ensure a just transition and enhance the resilience of our social and physical infrastructure.
- Options to keep more of our energy dollars local.
- Lower costs for all customers over time.
- Power to invest in the reliability and resilience of our infrastructure.
- Increased customer input in utility rates and programs.
While there is no guarantee that a Boulder municipal electric utility would realize all of these benefits, analysis indicates that they are possible.
If completed, Boulder’s municipal electric utility would have several power supply options.
- Purchase power from Xcel Energy on the wholesale market. The city has considered this option for a short period of time after the municipal utility begins operation to help smooth the transition from Xcel. Purchasing power from Xcel would not get us to 100 percent renewable electricity by 2030, so the city is considering “stepping off” Xcel power gradually and purchasing renewable power on the market from other providers.
- Purchase renewable power on the wholesale market. One of the potential benefits of municipalization is gaining access to the wholesale power market. As its own utility, Boulder could choose where its power comes from. There are dozens of renewable (wind and solar) providers that Boulder could purchase power from, moving the community closer to its 100 percent renewable electricity goal.
- Support more local distributed generation. Boulder is also committed to achieving 100 MW of local renewable generation by 2030. To do this, we’d need to quadruple the total amount of rooftop solar we have on our roofs today. Boulder’s utility would add increasing amounts of local solar to its energy mix. Coupled with possible battery storage, local solar could play an important role in the municipal utility’s power mix.
Ultimately, the municipal electric utility would likely use all three of these strategies. They will be evaluated on cost, reliability and how quickly we can get to 100 percent renewable electricity by 2030.
The city has been officially exploring municipalization since 2010 when the franchise agreement between the city and Xcel Energy expired. Here are some of the key milestones:
2010: Boulder decides not to renew 20-year contract with Xcel Energy.
2011: Voters fund evaluation of, and set requirements for, a clean energy utility.
2013: Third-party evaluation confirms city can meet requirements.
2014: City creates transition plan for operating local utility; begins legal process in district court.
2015: Boulder starts regulatory process a Colorado Public Utilities Commission (PUC).
April 2017: City Council rejects two settlement proposals from Xcel Energy.
July and Aug. 2017: City’s completes nine-day hearing at the PUC.
November 2017: Voters approve extended funding for municipalization.
Through September 2017, the city has spent approximately $12.1 million on the municipalization project. The majority of this has come from the voter-approved Utility Occupation Tax, which raises $2.1 million a year to cover legal, engineering and other costs associated with the exploration of municipalization. Visit our Budget and Funding page for more information.
City of Boulder voters were asked to consider municipalization, or related funding and issues, in 2010, 2011, 2013 and 2014.
1. 2010 Utility Occupation Tax, passed by Boulder voters.
2. 2011 Ballot Measures 2B and 2C passed by voters to research and fund creation of a local electric utility.
3. 2013 Ballot Measure 2E passed by voters, refined acquisition costs and specified representation for out-of-city customers. 310, an Xcel-backed 2013 measure was defeated.
4. 2014 Ballot Measure 2B passed by voters, allowing city council to hold private executive sessions to discuss legal advice for creation of a local electric utility through 2017. Voters did not approve an extension of this provision in the November 2017 election.
5. 2017 Ballot Measure 2L passed by voters, extending funding for municipalization through the Utility Occupation Tax.
6. 2017 Ballot Measure 2O, passed by voters, guarantees another resident vote prior to issuing debt to create the electric utility.
Yes. In 2017, voters approved measure 2O. Prior to issuing debt to start-up the utility, the city must return to voters for a final "go/no-go" decision. This vote will likely come in 2019 or 2020.
The city is currently seeking approval through a state regulatory process of its separation plan. In March 2017, the city filed its Separation Application at the Colorado Public Utilities Commission (PUC). On Sept. 14 , the Colorado Public Utilities Commission issued its written order on the city’s separation application. Read the order , the FAQs and the city’s statement for more information.
The Colorado Public Utilities Commission (PUC) is a state regulatory body. The three-person commission is a part of the state’s Department of Regulatory Agencies and regulates investor-owned utilities like Xcel Energy.
The PUC is currently reviewing the city’s separation application and its plans to physically separate a city-run electric distribution system from Xcel Energy’s electric distribution system. The Commission will determine the next steps in the city’s process.
Documents related to the city’s PUC process are available in the city’s repository and through the PUC website (search Proceeding No. 15A-0589E).
The following issues were presented to the Commission for resolution in this proceeding:
- Does Boulder’s identification and description of the Assets for Transfer include only the assets necessary to be transferred to Boulder and, subject to verification after preparation of detailed design and specifications, exclude any existing assets that are necessary for Xcel Energy to continue to provide effective, reliable, and safe service after separation?
- Is the city’s Separation Plan sufficient for Commission approval in this Phase 1 so that Boulder and Xcel Energy can proceed to prepare Scope of Work documents and detailed design drawings and specifications to implement the Separation Plan?
- Is Boulder’s four-phased plan, which is designed to obtain PUC review and approval of (1) Boulder’s planning level design for separation of its and Xcel Energy’s electric systems and list of assets for transfer; (2) jointly developed detailed design drawings and specifications; (3) jointly developed transition processes; and (4) Boulder’s compliance filing for final approval, acceptable to the Commission as a reasonable means for proceeding toward Boulder’s municipalization?
- Is Boulder financially capable of funding municipalization whether Xcel Energy pays and tracks all costs for reimbursement by Boulder or Boulder pays its costs and pays Xcel Energy monthly for its costs and, regardless of how Boulder pays for the separation costs, should the Commission put reasonable measures in place to protect ratepayers from unnecessary or imprudent costs?
- The parties have stipulated that the payment of just compensation and the entry of the Rule and Order by the condemnation court should be deferred until after completion of that construction. Should the Commission approve the just compensation payment and Rule and Order deferral stipulation and retain jurisdiction over the assets until the separation construction is complete?
- Boulder has the right to operate a municipal electric utility serving all customers within its city limits. Can the Commission deny, at this time, the city’s right to serve IBM following the Cut-Over Date if no party has demonstrated there is a substantial inadequacy in the service Boulder could provise to IBM?
No. Early in the process, the city planned to serve small numbers of county residents. Per the city’s latest engineering plan, the city WILL NOT serve any customers who are not within city limits.
Boulder’s request includes only the electric distribution facilities and associated real property interests inside and outside of the city limits necessary for the new electric utility to serve its customers located within the city limits. The real property interests associated with the assets requested for transfer are for non-exclusive easements to install, operate, and maintain the portion of the facilities that will be part of the Boulder system after separation.
There are three points at which the city will be committing to spend money.
First, if the city is allowed to proceed, the next monetary commitment for the next two-to-three years will be up to $16.5 million. That will cover (1) acquiring the assets by negotiation or condemnation, (2) making a Network Integration Transmission Service application to Xcel for the six substations that will serve Boulder customers, and (3) preparing detailed drawings for the construction with Xcel.
Second, at the end of that process the city will have more precise costs of the separation and acquisition and will make a Go/No-Go Decision. If the decision is to proceed, the city will be making a commitment of approximately $110 million. That will cover all of the construction costs and new equipment required to physically separate the existing system into two separate systems.
Third, for the acquisition, no funds are committed, except the litigation costs, until the city acquires the property from Xcel. Once the city has the property it will be the retail provider and have revenues from customers to repay any debt issued. Depending on the final PUC order and agreement of the parties that may occur before the start of separation construction or after all of the construction is complete.
Go/No-Go is the point at which the city will decide whether to proceed with the construction to separate the existing system into two. It is anticipated that decision will be made after the city knows the acquisition price and has construction bids on the costs of separation. That decision could be made by the city council unless the voters approve a charter change for that decision to be made by the voters.
The schedule coincides with the three dates of financial commitments described above. Once the pending PUC decision is final, it is expected to take two years to do the three steps necessary to know the costs of separation and acquisition to make the Go/No-Go Decision.
Once the Go/No-Go decision is made, separation construction would start, which is expected to take as many as three years. Depending on when the assets are transferred to the city, payment for the assets could be before or after the separation construction.
Wondering what will happen to your existing solar contracts with Xcel Energy? Whether now is a good time to invest in solar if the city might municipalize? We love that you love solar and the city is committed to keeping solar customers whole. Read about our solar efforts here.
The most important job of any electric utility is keeping the lights on. We're working hard to make sure a city-owned and operated electric utility would be just as reliable as what we have now - and hopefully more reliable over time. Learn how we study reliability here.
1101 Arapahoe Ave.
Boulder, CO 80302