5:20am

Thu March 1, 2012
Business

Xcel Energy and City of Boulder Fight over Customers

Xcel Energy and the city of Boulder have been battling over who will provide electricity in the city going forward.

KUNC's Emily Boyer speaks with Boulder County Business Report Publisher Chris Wood  about the latest controversy over the city’s plans.

Boyer: Boulder voters in November narrowly approved the possible creation of a city-owned electric utility, a step vehemently opposed by Xcel Energy. Now it looks like Xcel is taking the fight to another level. What’s going on?

Wood: Well, Xcel is continuing to up the stakes, Emily. The company recently asked state utility regulators that it be allowed to exclude Boulder customers from certain renewable-energy and demand-side management programs. It wants to exclude those customers unless the city agrees to assume the programs’ costs if a municipal utility were formed in the coming years.

Essentially, Xcel doesn’t want to have to have other rate payers around the state paying for those costs if Boulder splits off into its own utility.

Boyer: So what programs are we talking about exactly?

Wood: Essentially, these are programs aimed at rewarding use of renewable energy, and it’s those programs that Xcel is targeting, including programs that go by the name of SolarRewards, Windsource, SolarRewards Community, commonly known as a solar-gardens program, and the demand-side management energy-efficiency program.

Xcel says that these programs require a long-term commitment from customers, and that it can’t rely on Boulder customers long-term because the city might create its own utility.

Boyer: How is the city reacting to Xcel’s request to exclude Boulder customers from these programs? I would imagine that these renewable energy programs are pretty popular in Boulder.

Wood: They certainly are. Boulder customers are some of the biggest users of these rebate programs, with participation at higher than the state average. Not surprisingly, backers of a proposed municipal utility in Boulder are not happy with Xcel’s request. They say that Boulder residents are paying for the rebate program through higher fees and that it would be unfair and discriminatory to cut them off. City officials also say that it’s incumbent on the city and Xcel to continue serving Boulder customers in the best way possible as discussions over municipalization continue.

Boyer: And Chris, you’ve spoken about the push for a municipal-owned utility in Boulder before. What is at the bottom of this controversy?

Wood: It all comes down to city officials and supporters who feel that the city would be better able to increase use of renewable energy sources if the city were to create its own municipal utility, rather than having Xcel serve Boulder customers.

A municipal utility is not uncommon: We see them in Fort Collins, Loveland, Longmont, Estes Park and Colorado Springs – just to name a few examples. But opponents point out that those city utilities were created many decades ago, and that the cost of condemning Xcel’s power assets would be extremely high.

Still, voters did authorize the city to create a utility, though the city still has not decided to do so.

Boyer: So if the city has not yet decided to go that route, what is the coming up now?

Wood: It’s really posturing, on both sides. Xcel wants to make the city and Boulder residents aware of the consequences of such a move, while the city has proceeded to hire out-of-state attorneys who can help it weigh the costs and benefits and legal issues surrounding possible condemnation of Xcel’s assets.

This is a fight that will go on for quite a few years, and eventually it will probably wind up in court.

Boyer: Chris Wood is the publisher of the Boulder County Business Report.

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