The City and Xcel Energy Have a Potential Deal. Here’s What You Need to Know.
On July 28, the City of Boulder and Xcel Energy reached a potential settlement agreement that could create new pathways to reach the city’s energy goals and halt the city’s decade-long municipalization effort.
This is a significant development in the city’s work to create a clean, local and reliable energy future. Here’s what you need to know to before you vote on the potential agreement.
It’s not a done deal. The potential agreement will require voter approval.
On Sept. 1, City Council placed a new 20-year franchise agreement with Xcel Energy on the ballot. They also placed a measure that would fund projects under the partnership. These measures require voter approval before going into affect. Read the ballot language.
If approved, the agreement would halt the city’s long-time effort to create a city-run electric utility. Boulder residents and businesses would remain Xcel Energy customers.
For more than 10 years, the city has been exploring the creation of a local electric utility in a project called Local Power, which is funded through a surcharge on Boulder customers' Xcel Energy bills called the Utility Occupation Tax.
Over the years, the city’s Local Power work has cleared many hurdles toward creating a local electric utility, including gaining approval from state regulators, studying the financial and technical feasibility of the utility and creating detailed plans to engineer the new utility.
Approving the potential settlement with Xcel Energy would pause this work indefinitely, and Boulder residents and businesses would remain customers of Xcel Energy.
If approved, the city and Xcel Energy would sign a new, 20-year franchise agreement, but the city would have options to end the deal early under certain conditions.
Before 2011, the city and Xcel Energy had a shared agreement that governed the utility’s use of city streets, public easements and other city-owned property for the purpose of providing electric and natural gas utility service to residents and businesses within the city. In 2010, Boulder voters allowed this agreement, called a franchise agreement, to expire. Since 2011, the city and Xcel Energy have operated without a franchise agreement.
If approved, the potential agreement would enter the city and Xcel Energy into a new, 20-year franchise agreement; however, the city and Xcel have agreed to unique terms that would give the city additional opportunities to end the franchise agreement early under certain conditions.
The city could opt-out of the franchise in 2022, 2024 and 2028 if Xcel Energy fails to meet certain emission benchmarks, and could also opt-out in 2026, 2031 and 2036 for any reason. An opt-out would require a six-person vote of City Council or a majority vote of Boulder voters.
If the city opted out of the franchise, it could re-initiate the process to create a local electric utility, building on much of the progress made to-date, or explore other options that may arise in the future, like buying electricity directly from solar and wind farms.
The potential agreement also has provisions that will chart Boulder’s energy future and relationship with Xcel Energy, including emissions reduction benchmarks for Xcel Energy and commitments to work towards Boulder’s energy goals.
In negotiations, the city and Xcel Energy designed a potential agreement that would allow the Boulder community to make significant progress on its clean electricity and climate goals. Under the potential deal, the city and Xcel Energy would work together in a modern grid planning partnership, aimed at helping the city achieve 100% renewable electricity by 2030. Many of these programs would come at a cost to Boulder. City Council is also considering funding mechanisms for these efforts that, if approved by City Council, would also require voter approval.
The partnership will require resources to be successful. Council has also placed a funding mechanism on the ballot, too.
Implementing the proposed partnership will require significant staff work and financial resources. Council has placed another item on the ballot to fund the partnership. If passed, this item would repurpose fund that the city currently uses to pay for municipalization. These funds would be directed to pay for partnership projects, pilot programs and services. Learn more on the ballot item page.
There are more resources online if you’re interested in diving deeper.
There’s a lot more to dig into on our website.