For decades, Xcel Energy has provided Boulder, Colorado, with electricity. But the city wasn't getting what it wanted—enough clean energy.
Boulder has been toying with the idea of taking energy management local for the past few years. Instead of paying Xcel for power, the city could create a public, municipally run utility that would prioritize clean energy and cut the city’s carbon emissions. Progress moves slowly in the energy world, so the city won’t make the final decision on local power for another few years. But this week's vote was the energy equivalent of closing an account at a national bank in order to buy into a local credit union. Instead of just one person leaving the utility, though, this is an entire community.
If the city does move forward, it could build its own utility that derives 40 percent or more of its power from renewables. One of the tricky issues for Boulder is that Colorado already has a very ambitious renewable energy goal: Big utilities like Xcel are required to source 30 percent of their power from renewables by 2020. The big difference between a theoretical Boulder Energy Company and Xcel is that Xcel has invested in coal-fired power plants; advocates for local power favor natural gas, which has a lower carbon profile, and faster build-up of renewables, to 70 percent or more of power sources. Xcel also needs to make a profit. A local utility would only need to break even, freeing up more capital to invest in renewables.
Xcel isn’t making it easy for the city to strike out on its own. The company spent hundreds of thousands of dollars fighting the two ballot proposals that would move the process forward and has suggested that Boulder residents might lose their eligibility for current clean energy initiatives. And Xcel could drive up the price the city has to pay for breaking away.
To start a local utility, Boulder must take over the wires, poles, and other infrastructure that Xcel users to deliver power to customers. By law, the city must try to negotiate over the value of those assets with the company. The harder the bargain Xcel drives, the more expensive it will be for Boulder to dump the company. Xcel can also demand that city pony up for “stranded assets,” energy projects the company started in order to serve the community and now has no need for.
The reason for the move is that Boulder isn't on track to meet its ambitious goals for cutting emissions, and the Xcel’s coal-fired power plant was a major contributor to the problem. That’s why setting sustainability goals and putting them in writing is so important: It makes clear when more work is needed. If more communities took a hard look at where their electricity was coming from, more of them might decide to explore other alternatives.