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Analysis: Boulder can replace Xcel


By Mark Jaffe, The Denver Post

An analysis prepared for the City of Boulder says the city can break away from Xcel Energy and create its own municipal utility with cleaner energy and comparable rates.

The report,
assembled by a group of consultants and citizen working groups, says the basic cost of buying Xcel's lines and infrastructure would be $150 million and additional costs might reach $255 million.

With all those costs taken into account and the expense of raising bonds for financing, the project is viable, according to the 287-page report.

The Boulder City Council, which eventually will decide whether the city should split with Xcel, will review the report Tuesday.

"We believe the findings demonstrate that a municipal utility could be good for consumers, good for Boulder businesses," Heather Bailey, the city's director of Energy Strategy and Electric Utility Development, said in a statement.

Xcel energy executives have said Boulder is underestimating the costs and challenges of running an electric utility.

"We need a little time to go over the proposal to have a thoughtful discussion," Michelle Aguayo, a spokeswoman for Xcel, said Thursday.

Boulder is exploring creating its own municipal utility to help meet the city's goal of reducing its greenhouse-gas emissions. It has been a difficult goal to meet since about half the electricity Xcel generates in Colorado comes from burning coal.

The City Council had set requirements that a municipal utility had to meet, including that:

• Customer rates would be comparable to Xcel's.

• The municipal utility would be financially viable.

• Electricity service would be as reliable as Xcel's.

• The utility would reduce greenhouse gases and increase renewable energy.

In an interview before the release of the study, City Councilman Ken Wilson cautioned that the timing and numbers for municipalization must be carefully vetted.

In the five scenarios analyzed, the municipal utility meets the criteria, except for the two with the sharpest greenhouse-gas reductions — where rates are high.

A key to the calculations is the cost of obtaining Xcel's infrastructure, put at $150 million, and the so-called stranded costs, investments Xcel will not be able to recoup.

Xcel places the stranded costs at $255 million if Boulder leaves the system in 2017. The city says those costs are zero.

The analysis modeled stranded costs at zero, $127.5 million and $255 million. In all cases, the municipal utility was competitive — while doubling renewable-energy sources.

The low-cost, no-coal scenario also cut greenhouse-gas emissions by two-thirds compared with Xcel.

As for a homeowner's bill, one analysis projects the Xcel bill for an average 632 kilowatt-hours will be $93 in 2017.

The Boulder municipal-utility bill — depending how much of the stranded costs must be paid — would range from $57 to $78.

Mark Jaffe: 303-954-1912, or