Tuesday night the City Council of Boulder, Colorado took a historic step towards self-determination regarding its energy supply. With this vote, the City of Boulder is no longer under the monopoly power of Xcel Energy. Some key issues are still up in the air, but the power dynamics have shifted dramatically and permanently.
Boulder has taken a path that municipalities across Colorado (and perhaps the country) can follow, much as Boulder has followed the outstanding lead of Marin County, CA and Winter Park, Florida.
Jump the fold to learn how we did it and how your community can as well.
To understand what happened let me lay out a few of the basics:
- The City of Boulder (and all of its residents and businesses) gets its electricity from Xcel.
- Every 20 years, the City signs a Franchise Agreement with Xcel that gives Xcel a monopoly over Boulder's energy users for the next 20 years.
- The City charges Xcel for the privilege of using rights of way and gaining access for powerlines, sub-stations etc. This amounts to nearly $4 million per year going to the City's general fund.
- Xcel passes on this $4 million cost by charging its customers a "Franchise Fee" - if you are an Xcel customer you'll find it on your bill.
- Once the Franchise Agreement is signed, the City has no power over Xcel to say whether the power Xcel provides is green, coal-based or whatever suits Xcel.
- The franchise agreement between Xcel and the City of Boulder expires this year.
- When a new franchise agreement is signed by the City, it must be approved by voters before it is legally in force.
- Xcel has said repeatedly and emphatically that it will not continue to collect the franchise fee until the City signs the new Franchise Agreement and voters approve it.
Those are the basics of the franchise concept and Boulder's relationship to it and to Xcel.
Now for some background on how we were able to break our dependence on Xcel without losing the $4 million per year that the City depends on.
- A wonderful group of determined citizens has hounded the City for over a year (and really much longer in many cases) to adopt a tough negotiation stance with Xcel.
- Citizens demanded that the Franchise Agreement be modified to require Xcel to meet an aggressive time-line of de-carbonization of our electricity supply - at least an 80% reduction by 2020.
- City Staff largely agreed to take such a stance and to be very demanding, recognizing that this is the ONLY real opportunity for self-determination over its energy supply, the City ever has with Xcel.
- During year-long negotiations Xcel stalled and stalled and ultimately said they would NOT put into the Agreement anything binding. They would study the problem, but make no promises.
With this impasse, concerns grew that the City would cave and sign a toothless Franchise Agreement to continue to receive it's $4 million annually while accomplishing none of the City's de-carbonization goals.
By this time, the citizen's group, anticipating Xcel's stalling and pressure tactics, had done a great deal to educate itself and the community about how to break away from a monopoly utility that is flat out unresponsive (or opposed to) changing the fuel source of its electricity. This is where the examples of Marin County and Winter Park, FL were so instructive and inspiring. Those are worthy of a number of diaries unto themselves.
With the positive examples inspiring us and the determination of the City and its citizens, the following strategy was conceived:
- City Staff decided to recommend to the City Council that the inadequate Franchise Agreement NOT be put on the ballot. Instead the franchise agreement would expire, with Xcel still legally required to continue providing power to residents and businesses in the City.
- City Staff also recommended that a Utility Tax EQUAL to the Franchise Fee be placed on the ballot instead. If approved by voters, Xcel will be taxed an amount equal to the money obtained via the Franchise Fee. Energy users in the City will notice no net change to their bills as a result of this Utility Tax.
What does this achieve and why is this such an effective strategy?
- The City (assuming our campaign to approve the Utility Tax is successful) will receive exactly the same money it receives from the Franchise Fee.
- Because the Franchise Agreement is NOT on the ballot, Xcel has nothing on the ballot to fight for. Fighting against the Utility Tax would be a very difficult position to take from a PR standpoint - but we'll see...
- The City is no longer bound to Xcel through the Franchise Agreement. The City is now free to pursue whatever strategy it finds to be most effective at reducing its global warming footprint, as cost-effectively as possible.
- We have not yet achieved the municipalization of our utility like Winter Park and Marin County, but we are well on our way and truly nothing can stop us.
- Ultimately Xcel may offer the City an amazing deal that we gladly accept. Now that Xcel has nothing over the City, they must compete on a fair and equal footing with other smaller, nimbler and abler companies, in the free market.
That is where things stand now. There is surely much more for me to communicate, but I want to get this out there asap so that others can learn as we have, from these inspiring examples.
Update: Here is a website that will track Boulder's progress to decarbonize according to its needs rather than the heavily de-amplified and more costly results gotten from the IOU (Investor Owned Utility). That's www.renewablesyes.org.
Update 2: Boulder may end up collecting an extra $200.000 that goes towards the study of Boulder's energy options.