Climate-conscious Boulder takes energy future into its own hands

Every Republican candidate in the 2016 presidential election favors a lightly regulated, market-based energy strategy. But the city hosting Wednesday’s GOP debate is conducting an experiment in precisely the opposite approach.

Boulder, Colorado, is attempting to shed its private energy utility, Xcel Energy, and replace it with a public, city-owned service. Supporters of the “municipalization” effort say a publicly owned utility would invest more in renewable energy and reduce carbon emissions while keeping down customers’ energy bills. If the transition to a different energy model is successful, they hope that Boulder can serve as an example to other cities.

Boulder began to pursue municipalization — the transfer of corporations to municipal or city ownership — in 2010, when the city council declined to renew its 20-year franchise agreement with Xcel, a major consumer of coal.

The city’s decision to sever its relationship was driven in part by grassroots sentiment in favor of more aggressive carbon-cutting measures. Boulder officials were also reluctant to enter a two-decade relationship with Xcel without provisions to adopt evolving industry practices and renewable technologies.

“Xcel was not able to do a franchise that was less than 20 years,” said Sara Huntley, a Boulder city government spokeswoman. “We were really looking for a 5- or 10-year franchise, mainly because the industry is in such a state of change right now.”

Xcel has often touted its success in reducing emissions. In its 2014 Corporate Responsibility Report, the energy company said it had successfully slashed companywide carbon dioxide emissions by 22 percent since 2005.

Yet Boulder activists say they can do better. Volunteers for RenewablesYES did their own modeling and projected that a publicly owned utility could shrink the city’s emissions by more than half.

Reducing emissions could prove to be easier than working through the legal implications of municipalization, a convoluted process made more complicated by Xcel’s opposition. In 2013 the company backed a ballot measure called Question 310 that would have halted the march toward municipalization, but voters defeated that proposal by a 2-to-1 margin.

Xcel and Boulder are now waiting for Colorado’s Public Utilities Commission to rule on a motion, filed by Xcel, to dismiss the city’s application to create a public utility. PUC will hold a hearing on Nov. 4, and Huntley said the city expects “we may have a decision in the middle of next week.”

“We have asked that the plan be dismissed as it does not meet the commission’s requirements,” said Michelle Aguayo, an Xcel Energy spokeswoman. “The commission has not yet ruled on the city’s filing or our motion to dismiss. Xcel Energy has always been willing to work with Boulder and welcomes a candid discussion about options that could work for the city.”

If the commission sides with Boulder and allows municipalization to proceed, the city will move forward with its attempts to seize parts of Xcel’s distribution network through eminent domain — a pursuit further complicated by disagreements over the value of those assets.

For Boulder, there is no guarantee of success. But a victory could galvanize other communities across the country.

“I think other municipalities are watching this very closely,” said Anya Schoolman, executive director of the Community Power Network in Washington, D.C. “In Minneapolis, which is in the same territory of Xcel, they stated an intent to municipalize that brought Xcel to the negotiation table.”

In October 2014, in the face of municipalization threats, Xcel signed a deal with the Minneapolis city government agreeing to cut greenhouse gas emissions 80 percent by 2050.

Boulder officials recently advised Washington, D.C. on how to negotiate a better franchise with that city's utility provider, according to city spokeswoman Huntley. “We know that we’re fortunate to have the community’s support and the taxpayer support,” said Huntley. “We’ve been hopeful from the very beginning that we could create a model toward municipalization that would be replicable in other communities.”

In the past, municipalization was seen as a way to bring down rates and improve reliability, but in recent years, cities across the U.S. have expressed interest in municipalization to achieve “a more diversified or greener portfolio,” said Sue Kelly, CEO of the American Public Power Association, which provided Boulder with guidance in its municipalization effort.

“Over the last few years we’ve seen a growing interest in that kind of power supply portfolio,” Kelly told Al Jazeera. “And we’ve especially seen that in communities that are university towns, like Boulder."

A group from Maui, in Hawaii — the state with the highest electricity costs in the U.S. — attended the most recent APPA national conference and expressed an interest in pursuing municipalization. A spokesman told Al Jazeera that officials in Maui "are studying our options."