I have been watching the debate on the municipalization of Boulder’s electric utility with much interest. Before I retired I managed Boulder’s Division of what is now Excel Energy and have some experience as to what is involved with such an undertaking.
I find a lot of optimism in the city model and little consideration for the downside of the operation of such an endeavor. Much can go wrong and it is very costly when it does. As one example, an early or late snow storm can cost millions of dollars that can only be recovered through rates charged to customers.
So why are we considering municipalization? A year ago, the city indicated that the municipalization alternative was only a means to an important end – more renewable energy and a reduced carbon footprint. I have to wonder about this now. The City’s feasibility study doesn’t contain any funding for more renewables or an energy supply mix with lower carbon emissions. The study also omits funding for energy efficiency programs (Xcel spent $5.6 million in 2010 on Boulder’s Demand Side Management), and the City has no budget planned for solar rebates to continue the rooftop solar installations in Boulder (Xcel has spent over $38 million toward Boulder solar since 2006).
I have often said that a Company’s or City’s Soul is its Budget. Locking in the initial rates is just a ploy to get votes but over time the rates will go up considerably. Remember, the only ones to pay for all of the operating costs and materials are you-the rate payer.
I am skeptical of pie-in-the-sky promises. Facts are facts. Xcel and Public Service Company have 120 years of service, knowledge and commitment to Boulder. Consider the response to the Four Mile Canyon fire last year. They know how to run a system and customers are assured to receive reliable and cost effective service.
Please vote NO on 2B and 2C.
Thank You,
Earl McLaughlin
Boulder
Earl, you fail to see what Xcel has done, accepting the party line that we need a monopoly to run our energy. In 2002, Xcel crashed their stock and came up with the idea of building a giant new coal plant in Pueblo that we did not need and charged that plant plus a healthy profit (they make their profit on energy plants and not on providing the energy) to rate payers (us). We have been saddled with that plant every since. They programmed their computer to say coal prices would go up 2% a year for 30 years. Their 30 year price projection has already been passed in 3 years. You are a great watchdog for small change possibilities that have not happened, but ignore much larger costs that are with us each month.
Moreover, regarding infrastructure, it's important to understand that Xcel is charging us for those lines and infrastructure either way. That's how they raise money to replace the infrastructure. If we stick with Xcel we are being charged a set amount each month on our bill with an additional 8-10% interest as they depreciate that infrastructure over time. If Boulder assumes that infrastructure, the difference is that given the low interests rates in our recession plagued economy, Boulder is likely to do far better than 8-10% interest, so we're likely to save money. The same is true of Xcel's 1B dollar coal plant. We are not charged that billion dollars all at once, but it's wrapped into our bills on a monthly basis then Xcel adds additional amount for their profit. Finally, Xcel increased their monopoly profits by 23% during this unprecedented recession, not by fair competition because they are the only game in town.
Finally, Earl, the only way to foster competition that will result in lower rates and higher reliability is to have bidding to supply Boulder's energy and may the most cost-effective company win. That’s how Winter Park, Florida and Marin County, California broke away from their monopoly energy companies and have saved significantly from doing so. Winter Park puts their profits into increasing reliability (Florida has severe thunderstorms) and burying power lines. Marin puts their profits into conservation and renewable energy.
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