Local Power: Looking Back on an Eventful 2019
The city’s Local Power project achieved several key milestones this year. Let’s look back.
City receives go-ahead from state regulators
Approval from a Colorado state regulatory body, the Public Utilities Commission, was a key step that the city had sought for four years. In October, the commission granted permission to transfer assets outside substations. This ruling allows the city to begin the process to buy much of the existing electric distribution system from Xcel Energy and eventually take over operation of the infrastructure serving customers in Boulder.
The decision ends the multi-year process before the commission that began in 2015, issuing a ruling based on their Oct. 10 discussion.
City continues process to determine acquisition cost
A primary task for the city’s local power team is to develop a clear picture of the cost to create a city-run electric utility. One of the biggest costs to determine is the cost to buy the existing system from Xcel; the city refers to this as the “acquisition cost.”
In January, the city kicked off this process after council approval by sending Xcel a letter notifying the company that the city intends to acquire their system. Then, after several offers to Xcel, the city filed to condemn Xcel’s assets in Boulder District Court.
Xcel challenged the city’s June condemnation filing, filing a motion to dismiss because the PUC was not finished, which the Boulder District Court granted in September. The city filed an appeal of this decision in October.
After the PUC October decision, the city re-initiated the acquisition process. In November, the city offered to purchase Xcel’s system outside substations for $94 million. The parties met to discuss the city’s offer but could not reach agreement.
In December, the city filed to condemn Xcel’s assets inside substations in Boulder District Court.
- June 28, 2019 press release, “City files petition to condemn Xcel Energy assets in District Court”
- Sept. 4, 2019 press release, “Boulder District Court grants Xcel Energy motion to dismiss city’s condemnation petition ”
- Nov. 22, 2019 press release, “City offers Xcel Energy nearly $94 million for assets necessary for local electric utility”
- Dec. 19, 2019 press release, “City files in District Court to condemn Xcel Energy assets necessary for local electric
Engineering moves forward
If the city began operating its own electric utility, it would own the poles, wires, meters and the distribution feeders inside substations that feed power to customers in our city. Before this stage in the process comes an essential step: engineering an updated electric system that separates Boulder’s future grid from Xcel’s.
In 2017, state regulators told the city that it could only serve customers that are within city limits and Xcel would reserve the right to serve customers in the county. This would result in one system to serve Boulder’s customers within the city limits and another to serve Xcel’s customers in the county. Engineering a separate system is achievable, but still complicated because of the number of unincorporated properties within and surrounding the city.
The city has worked with Xcel engineers as well as other firms and finalized the design of the infrastructure necessary to separate the grid into two distinct systems that maintain or improve reliability for all customers, whether the city’s or Xcel’s. This detailed design effort will help the city estimate the total construction costs and begin to plan for this reconfiguration.
The city projects the end of this phase of engineering work to wrap up in early 2020.
Council supports moving community decision from November 2020 to November 2021
The city’s Local Power project achieved several key milestones in 2019; however, in December, City Council voiced support for moving the final community decision on whether the city will ultimately create a local electric utility from November 2020 to November 2021.
This new project schedule reflects the time necessary for the city to provide a complete financial analysis to voters prior to the community decision. Key costs the city will determine include:
- Acquisition Cost: The cost to buy the existing system from Xcel Energy
- Separation Construction: The cost to construct a separate Boulder electric distribution system
- Transition Cost: The cost to start-up the utility.
- Power Supply: The cost for the new Boulder utility to buy power to provide to customers
What’s coming up in 2020?
2020 will be another busy year for the Local Power project. Key next steps include:
- Working with Xcel to determine path forward regarding substations
- Determining an acquisition price through negotiation or condemnation
- Completing separation design engineering
- Continuing financial analysis
- Updating the project’s communication and engagement plan
Published: Dec. 19, 2019
Emily Sandoval , Media Relations, 303-441-1927