On June 12, the City of Boulder sent a second offer letter to Xcel Energy. In this letter, the city offered $82 million, representing a standard 20% contingency above the orginal offer of $68.5 million, as well as the opportunity to avoid the costs, delay, and uncertainty of litigation. The city has requested a response by June 26, after which the city will file a condemnation petition with the District Court if there is no response from Xcel.
On April 10, the City of Boulder sent a letter to Xcel Energy offering to pay $68.5 million to purchase the assets necessary to develop a city-run electric utility. This marks a step in the negotiation process to acquire the assets, which will help the city determine the cost of acquisition prior to the future community vote on municipalization. In December, City Council approved an ordinance that will allow the city to move forward with the process to acquire Xcel Energy's assets, including condemnation if negotiations fail or are futile.
January 2019: Updated analysis demonstrates that Boulder electric utility could achieve renewables goals
Based on recently updated information, a city-run electric utility could achieve 89% renewable energy by 2024 at an affordable cost. The city's analysis of the state of the power market revealed that there are power providers willing and able to serve Boulder's energy needs at costs consistent with low-cost bids across the industry and can meet the city's energy goals. Find out more about the city's power supply analysis in the city's Local Power Explainer.
Dec. 13, 2018: The city hosted a Local Power quarterly update at the West Senior Center. This public meeting included information about recent PUC filings, the process for acquiring Xcel property assets, and the most recent financial analysis and power supply. Staff also demonstrated the the Financial Forecast Tool. You can download the presentation.
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A major component of our work between now and the 2020 community decision is ongoing financial analysis of the potential electric utility. We're working to identify potential costs to develop the utility so that the public can weigh the costs with the benefits when making the go/no-go decision. This analysis includes both short- and long-term financial feasibility: can the city afford the start-up costs to develop the utility and will the utility be financially sound for the long term?
Costs the city will determine prior to the 2020 community decision:
What is it?
One of the most important steps in Boulder’s municipalization effort is the purchase of the Xcel Energy distribution system assets that serve Boulder customers. These assets, which include poles, wires, electric cabinets, easements and more, will make up large portions of the city's electric system if the city ultimately separates from Xcel.
Under the Colorado Constitution, the city has the right to purchase the assets of a retail electric utility, but it must pay a fair price. The city is working prior to the 2020 community decision is determining what this price is. Voters will know this price so that they can make an informed decision whether to move forward with the project.
They city would only pay for these assets if approved by the voters in the community decision.
- November through December 2018: Council authorization to begin acquisition process (through negotiation or condemnation)
- First reading on Nov. 8
- Second reading and public hearing on Dec. 4
- December 2018: Good faith negotiations with Xcel Energy begin.
- The city and Xcel Energy will work to determine a fair price for the assets
- Early 2019: Condemnation process begins (if necessary)
- If the city and Xcel are unable to come to an agreement, the city can initiate condemnation through the power of eminent domain to determine a price. the parties can also reach agreement after condemnation is initiated.
- Spring 2020: A price is determined
What is it?
lf voters approve moving forward with Local Power, significant construction will be required to separate the existing distribution electric systems into two independently operating systems. The city plans to get an accurate picture of the construction costs by April 2020, prior to the 2020 community decision.
- April 2020: Complete distribution system design, construction bids and cost estimates.
- April 2020: Complete substation design, construction bids and cost estimates.
What is it?
If voters approve moving forward with Local Power in 2020, the city will have to pay for costs related to starting up the utility. These costs include:
- IT systems
- Billing and customer service infrastructure
- Staff for "Day 1" (the day the Boulder system can be operated separately from the Xcel distribution system)
- Offices and other properties needed for the utility
The city is working to get an accurate picture of these costs prior to the 2020 community decision.
- 2019: Refine Utility Operations plan
- 2020: Refine costs estimates of utility operations plan
What is it?
The city plans to buy most of the electricity it will supply to customers from the wholesale power suppliers. There are several companies that generate electricity, using both renewables and fossil fuels, that the city could buy power from.
The cost of the electricity the city will buy to sell to customers is the single greatest cost to the future utility. When evaluating the finances of a possible city-run utility, it's important to get an accurate estimate of these costs. The city is also working to develop these estimates prior to the 2020 community decision.
- Mid-2018: The city issues a "Request for Indicative Pricing" from potential power suppliers.
- Fall 2018: The city received responses to its request.
- Early 2019: The city will develop a power supply strategy based on the responses to the request for indicative pricing.
When the city learns more and further refines its cost estimates, it updates its financial modeling. Learn more about this effort on the Financial Forecast Tool page. The city updated financial modeling in December 2018.