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November 2, 2011

Boulder votes to take over electric utility

Yesterday Boulder, Colo., voted to buy its electric utility from Xcel Energy and have the city run it. It's a firm move toward electricity re-regulation -- the kind that has been discussed casually in Montgomery County. It'll be a risky move by Boulder if it follows through. The city will have to sell bonds to buy the utility assets from Xcel, and higher taxes are involved.

The Daily Camera newspaper describes the vote as an effort by the city to reduce its CO2 emissions:

The drive to form a municipal utility grew out of the city's efforts to reduce its greenhouse gas emissions. In 2006, Boulder voters approved a carbon tax to fund programs that would help Boulder meet the Kyoto Protocol, which calls for a 7 percent reduction in greenhouse gas emissions below 1990 levels.

But, as Bloomberg notes, the vote also comes after cost-overruns to install smart meters in Boulder. Writing before the votes were counted, Bloomberg said a yes vote for "municipalization" would "effectively" end the smart-grid project, but it sounds like the meters are already installed. Bloomberg:

The referendum comes after Xcel Energy spent more than $44.8 million, exceeding its original budget estimate of $15 million, according to regulatory filings. The initiative is one of the nation's first "smart grid" pilot projects, designed to help customers reduce power use and cut down on greenhouse gas emissions. Xcel raised $950,000 for its campaign to keep the Boulder utility private, compared with $88,500 spent by backers of the referendum, according to city records.
Posted by Jay Hancock at 8:43 AM | | Comments (2)
Categories: BGE/electricity
        

Comments

We haven't yet decided whether or not to form a utility. The vote yesterday just enabled the city of Boulder to look at the options in detail. City Council now has the power to form a utility, should it be both technically and financially feasible, and we've got a little bit of money with which to determine the feasibility over the next couple of years. There are other options too, like change the laws at the state level to allow Community Choice Aggregation, or a better contract of some kind with Xcel.

Also, the smart grid program which went 300% over budget was run by Xcel, and they've successfully petitioned the Colorado Public Utilities Commission to force Colorado ratepayers to pay for that overrun. And even at that exorbitant cost, it hasn't delivered the performance that Xcel promised.

Wrong. They only voted to fund investigation to see IF they want to buy out the utility's assets. Please read another article on this issue and you will clearly see this.

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.
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