As first said by Senator William Marcy nearly 200 years ago: “to the victor belong the spoils,” and today the proverb rings true again as Xcel Energy or, more specifically, its subsidiary, Public Service Company of Colorado, claims the spoil of serving the city of Boulder, Colorado unobstructed, at least for the time being. This news comes with the passing of the city of Boulder’s municipal utility, a casualty of a war fought in court.
A settlement has been reached in Colorado which ends a case that had been simmering since 2014. That case originated with Boulder City Council ordinance 7969, which created a municipal electric utility, with the goal of issuing debt to finance the acquisition of some Xcel assets.
Xcel took issue with this, and filed a complaint against the creation, not just of the utility, but of the entirety of ordinance 7969, which included two subsections, sending the matter to court. In 2017, the charter section that established the municipal utility was amended by Boulder voters, now reading that:
Only after approval of the registered electors at a regular or special election may the electric utility enterprise incur debt for construction to separate from the existing utility system to provide electricity to customers of the City by a separate system.
This, however, was not enough to appease Xcel, and the litigation continued until this very month, when a settlement was reached.
This settlement is highlighted by twin commandments, the first being that the city repeal ordinance 7969 and the two corresponding subsections from the city law. Secondly, the city has agreed not to enact any ordinance creating a new municipal electric utility, with the provisions that it may do so if the utility to be created complies with the city’s charter, while also only after a majority vote of the voting citizens.
But in the end, the city may have achieved at least some of its goals. The city’s stated aim with the municipalization effort was a more rapid transition to renewable energy, but at the end of last year, Xcel announced that it would be making the move to entirely decarbonize its fleet.
However, in death there is life, even if this life is hundreds of miles, or one timezone away. In California, community choice aggregators (CCAs) are achieving the same goals that Boulder’s municipalization sought. But instead of taking over investor-owned utilities entirely, CCAs are merely taking over procurement of electricity and sales to customers, and leaving the lines and wires under utility ownership. The blueprint is out there, providing another outlet of hope for a more rapid transition.
What’s more is that this decision does not spell the end of a municipal utility in Boulder, just the previous one and any potential others created through ordinance. The city may still create a municipal utility if a measure to do so is passed within a community election. The city is continuing to work towards establishing a municipal utility, in hopes of hosting and winning such an election.
Edit 5/30/19: This article previously inferred that the court case permanently barred any municipal utility from being established within the city. This was not true and has been changed to reflect the truth. We apologize deeply for the error.
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My understanding is that since the voters haven’t yet approved the utility creation Xcel said it was illegal. But, if the voters approve it in a future election Xcel will not use this agreement against Boulder.
Basically, a Catch-22 – voters have to approve the creation of a utility, but the utility needs to be there to be approved. Or something to that effect.
It seems to me that CCAs are a small version of ERCOT. The transmission is owned by different entities than the generation. This is they way all systems should be setup.
Did you do any research at all before you wrote this article? You are so completely wrong about this being the death of Boulder’s attempt to municipalize. The settlement just ended Xcel’s suit that the city had prematurely declared a utility–prior to the voters giving the city the go-ahead. That vote will occur in ’20 or more likely ’21.
This is far from over. You need to get your facts straight before you sit down to write!
Here’s an article from Boulder’s local rag:
https://www.dailycamera.com/2019/05/23/boulder-xcel-settle-companys-lawsuit-over-citys-utility/
Hello Dan, thanks for the comment. You are correct that I initially misreported this as the death of the municipal utility, which is not the case and which I have represented in my issued correction.