Options for Moving Forward
The purpose of modeling options for the local electric utility is to help identify, evaluate and manage risks. Because resource costs are generally the highest single ongoing cost for utilities, the modeling sought to illustrate possible resource packages for which the local electric utility might contract.
Although a local electric utility would have to meet a series of metrics – including financial requirements related to rate parity that are in the City Charter – it has flexibility in what path it would take to get there. By varying the costliest operating parameters, the modeling tests the feasibility of prioritizing different resource mixes once stranded and acquisition costs become known.
The latest round of modeling was stress-tested with additional risks to identify issues that could impact the city's ability to meet those charter tests. More in-depth analysis examined the likelihood of each of these risks and explored the actions a utility would take to mitigate them. Given that the “Lowest GHG’s” options were not cost effective in the first phase of modeling, this phase focused exclusively on variations to the “Low Cost” option. Additionally, the “Phase Out” option- which was designed to reduce risk by purchasing power from Xcel for a five-year period, mitigating any stranded cost obligation – was not re-modeled at this time because the city has been awaiting a decision from the FERC on its declaratory order.
To read a detailed analysis of the modeled options, read the July 23 study session memo.
You will also find informative graphics below.
To view the detailed analysis and inputs to the city's modeling, click on "Modeling Flow Chart" in the Menu bar.
OPTION: Xcel Baseline
This option would mean sticking to the current system as it is today. The City forecasts Xcel’s revenue requirements over 20 years based on publicly available filings and allocates a proportion of them to Boulder to compare the municipalization options to what it would mean if Boulder sticks with the current Xcel system.
OPTION: Low Cost
This option would mean forming a municipal utility that includes a least-cost resource mix of renewable energy baseload (wind and hydroelectricity), natural gas for stability, and some purchases from the wholesale market, which includes coal. The July modeling requires the resource mix include at least 30 percent wind.
OPTION: No Coal
This option would mean forming a municipal utility that is a variation on the “Low Cost” option (and subsequently the “Low Cost (50 percent Wind)” option) and blocks the utility from acquiring energy resources on the market that may include coal.
OPTION: Lowest Greenhouse Gas (GHG) Emissions
This option would mean forming a municipal utility that is a variation on the “No Coal” option which reduces GHGs to the maximum cost-effective extent.
OPTION: Reduce Use
This option would mean forming a municipal utility that is a variation on “Lowest GHGs” option in which energy efficiency investment is more than doubled, reducing the need to purchase electricity.
OPTION: Low Cost (50 percent Wind)
This option would mean forming a municipal utility that is a variation on the “low cost” option in which wind is modeled to meet or exceed 50 percent of annual energy needs.
OPTION: Local Generation
This option would mean forming a municipal utility that is a variation on the “Low Cost(50 percent Wind)” option in which $7 million annually is invested in local solar PV via a rebate, feed-in tariff, or other incentive.
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