By - Jim Vess

Boulder seeking to create a municipal utility offers Xcel $94 million for its wires and poles

Energize Weekly, December 4, 2019

In an effort to avoid a court condemnation proceeding, Boulder, Colo., which wants to create its own municipal utility, upped its offer for the purchase of Xcel Energy’s infrastructure to $94 million.

It is the third offer the city has made to Xcel, which currently serves Boulder, and it is a 15 percent increase over the last offer for Xcel’s wires, poles, transformers and other infrastructure Boulder would need to operate its own utility.

“We’ve made an offer that we hope Xcel will seriously consider,” City Attorney Tom Carr said in a statement.

“If Xcel accepts the offer or makes a counter-offer, the city and Xcel will enter into negotiations setting the terms of agreement,” the city said in a statement. “If Xcel does not accept the city’s offer, the city will proceed to re-file condemnation in District Court before the end of the year.”

Xcel Energy is reviewing the Boulder proposal, company spokeswoman Michelle Aguayo said in a statement.

“This is a complex process and it’s important for Xcel Energy to understand the information the city has shared,” Aguayo said.

Xcel has opposed the push for a municipal utility on several ballot measures and opposed the city in court proceedings.

The push to create a municipal electric utility started in 2010 when Boulder officials concluded the city’s Climate Action Plan goal to reduce the community’s greenhouse gas emissions could not be met if it continued to get its electricity from Xcel.

At the time, Xcel was getting about half its electricity from coal-fired power plants and another 25 percent from natural gas-fired turbines. Since then, Xcel has closed several coal-fired plants, adopted a net-zero carbon emissions goal by 2050 and expects to get 55 percent of its electricity from renewables by 2025.

Boulder voters have twice approved a local tax to finance the “municipalization” effort. Since 2012, the city has spent nearly $29 million, including staff time, on the project, according to the city.

The city’s appraised asset value of the Xcel infrastructure, with the exception of a substation, was $62.3 million. At the beginning of 2019, Boulder offered Xcel $68.5 million for the assets and raised that to $82 million in June.

There was no response from Xcel on either offer.

Boulder filed a condemnation petition for the assets in district court in June, which Xcel opposed. In September, the judge dismissed the proceeding saying the city lacked jurisdiction and needed direction from the Colorado Public Utilities Commission (CPUC).

In October, the CPUC authorized Boulder to transfer some assets from Xcel Energy that are necessary to create a city-owned utility.

The city said it expects the district court will hold a valuation trial in nine to 15 months to determine the cost of condemnation, but moving forward will depend upon one more vote by Boulder voters to see if they accept the price tag.

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