Boulder votes to break from Xcel Energy, legal battle likely

6:20 PM, Nov 2, 2011   |    comments
  • Share
  • Print
  • - A A A +

With 51.78 percent of the total vote, ballot measure 2C passed on Tuesday night. The measure authorizes the creation of a Boulder utility company if the customer rates would be the same as Xcel's rates at the time of acquisition.

Companion measure 2B also passed with just more than 50 percent support. That measure increases the Utility Occupation Tax to raise up to $1.9 million to pay for research and legal fees.

Although both measures passed by a narrow margin, it was not enough to trigger an automatic recount under state law.

Former Mayor and Member of the Boulder Clean Air Business Coalition Shaun McGrath says the vote is groundbreaking.

"Boulder is really setting out for the first time in the country as a city to vote to leave an investor-owned utility to pursue these kind of clean energy goals, it's never been done before," McGrath said.

He and other supporters are excited about the vote. They believe it will give the City of Boulder more freedom to pursue its goals in energy efficiency, including plans to produce as much of its energy as possible from renewable means.

"It will position Boulder to be a real leader in the new energy economy, not only reducing our carbon emissions but really creating an economic environment that will drive innovation, attract new businesses, new energy businesses and others to our community," McGrath said.

The Boulder City Council held a news conference on Wednesday to discuss the outcome of the vote, answer questions from the media and address the next steps in the process, which it says, could take three to five years.

Council members say utility customers in Boulder should see no changes in service while they continue to research the costs of starting a utility and continue to negotiate with Xcel.

The only change in rates, will come when the city council votes on how to levy the increase in the Utility Occupation Tax.

An open meeting will be held on Nov. 15 to take public comment on the issue, but the city has said the tax will likely be around one dollar per month for the average residential customer based on a percentage of their usage. City council did not immediately provide the cost increase for business customers.

The next major meeting on the discussion of starting a municipal utility will come on Dec. 6, when the city council will hold a roundtable meeting with the city attorney to discuss possible legal action if Xcel does not want to negotiate a deal to buy its infrastructure.

It appears Boulder's plan may end up in court. Xcel has said publicly it does not plan to sell its equipment or service in the city and on Wednesday, it released a statement:

"We appreciate the support of our customers in Boulder. We are disappointed in the outcome, but this is just the first step in a lengthy process," Xcel said in a news release. "We still believe municipalization costs have been significantly understated by the city. We remain skeptical that Boulder will be able to meet the terms of the initiative and match our rates, let alone match the level of renewables we provide."

The company went on to say regardless of the discussions between the city and the utility, customers will not be affected. Xcel does say depending on Boulder's next move, it may not make any major investments in long-term projects in the area.

"We do not want to invest in programs or resources that will not be useful to our state-wide system and other customers if we no longer serve Boulder. We have an obligation to the rest of our Colorado customers to assure we obtain the fair value of all of the assets. They should not be burdened by Boulder's decision," Michelle Aguayo, an Xcel spokesperson, said.

The City of Boulder has said it hopes to negotiate a buying price with Xcel outside of court but it has budgeted $1 million per year for legal fees, which is included in the increase of the Utility Occupation Tax.

By state law, it has to make a "good-faith offer" to buy Xcel's infrastructure and also offer money to cover the loss of customers and investments the investment-owned utility company has made in the area. The infrastructure costs have been estimated by Xcel to be around $150 million while the city has put that number around $126 million, according to city council members in Wednesday's news conference.

If Xcel does not want to negotiate, the city can take the utility company to court in what's called a condemnation process and force Xcel to turn over its infrastructure.

The City of Boulder says it will only do so if it believes the cost will be comparable or cheaper to what customers are paying now and until it takes out bonds to pay for the start up, it can decide not to move forward on starting a municipal utility at any time.

For more information on the plan, head to

(KUSA-TV © 2011 Multimedia Holdings Corporation)

Most Watched Videos