Let me start by saying I’m all for municipalization. I have supported the idea of forming a municipal electric utility in Boulder from the beginning. That said, I continue to be disappointed by the way that the City of Boulder conducts itself on this important issue — in particular its disregard for transparency, which seems to indicate that City Council and staff don’t think the people of Boulder can be trusted to understand complicated facts and make informed decisions.
From the very beginning, the municipalization process has been clouded by this lack of confidence in the public and bureaucratic lack of candor.
Why is municipalization a good idea? There is only one reason: because it could, if done properly, help to curb global warming in ways that getting our electricity from Xcel’s profit-motivated system never will. Aside from that, who in their right mind would ever consider tasking the city and taxpayers with such a monumental undertaking?
So why didn’t we just put it on the ballot that way, without all the contrived financial requirements and potential “off ramps”? The explanation is telling: Those pushing municipalization never thought, and still don’t think, the people of Boulder would municipalize their electricity based on the environmental motive if they thought it might cost them a few extra bucks a month.
I thought they were wrong four years ago and I still think they’re wrong. The only question mark for most folks on municipalization centers on the city’s competence to create and manage such a large project. It’s not the fear of spending a few more cents per kilowatt.
All that was needed to make a municipal utility a reality in Boulder was a little faith in the people, the faith to let one of the most environmentally enlightened communities in the country lead the way by doing the right thing on global warming. For the vast majority of people, supporting municipalization was never about limiting stranded costs or maintaining or cutting the cost of electricity.
As a result of this lack of public trust, the whole process has become more about a financial sales pitch that makes guarantees on the price of electricity than it is about the environmental necessity to act. This misplaced emphasis has caused the City Council to wrongly believe that the financial details of municipalization have to be formulated behind closed doors and kept secret from the public and the Xcel boogieman.
Unfortunately, when governments start doing things in secret they lose the trust of the people. And that is exactly what is happening when it come to Boulder’s municipalization process.
The people I talk to every day are more skeptical now that a municipal utility can be created and properly operated by the city than at any time since the original vote.
Part of this public skepticism stems from seeing Xcel make headway against the city in ways that city officials initially told us could never happen. Not acknowledging the potential for such legal and regulatory setbacks from the beginning was either the result of overselling the ease of the process to glean public support or actual naivety of the legal and regulatory system the city is now playing in. Either way, it hardly engenders trust.
The latest blow to the public’s confidence in the city came last week as a result of a lawsuit filed by municipalization critic Patrick Murphy. The suit forced the city to release public records. That’s right, public records, records that already belong to the citizens of Boulder but were being wrongfully withheld from those citizens because the city had decided they should be kept secret. Sound familiar?
Murphy’s suit forced the release of a 20-year financial summary for the city’s proposed utility. That summary showed that, under certain scenarios, the city could run its utility within the selfimposed fiscal limitations now set out in the City Charter. That’s great provided that the summary contemplated the right scenarios along with proper financial analysis to arrive at its numbers. So did it?
The city says yes… And then essentially adds that it’s nobody’s business how it arrived at its numbers. A judge agreed with the city, saying that the software used to model the city’s assumptions, which subsequently produced the city’s summary, was not a public record. I think the judge’s ruling is as wrong as the City Council’s secret executive sessions, but I’ll save that column for another day.
Realizing that its refusal to make the “algorithms and formulas” used to calculate the feasibility of a utility public was generating skepticism of its process, the city did some quick damage control by releasing a 20-part Q-and-A on Jan. 12. The Q-and-A did offer a nice explanation and confirmation of some of the basic data modeled to create the summary, but, once again, it did nothing to elaborate on the process used by the software to reach the numbers found in the summary. In other words, it still screamed, “Just trust us” and, “No, you can’t see the real process for yourselves.”
It is time for the city to change directions on the way it is managing the municipalization process. If it doesn’t, it could ruin the opportunity to create a municipal electric system. The city is losing public support on this issue because of its continuing and intentional lack of transparency.
The City Council claims that is has to have secret executive sessions to talk about municipalization and that the city can’t make its modeling system available to the public because to do so would give Xcel an unfair advantage in its fight to stop the process. In what world does this make any sense? Only in a world where the city fears that some of its assumptions might be wrong.
If the city really can create a municipal utility under the self-imposed restrictions it has put in place, then it is time to prove it. Put an end to the secrecy and make the full financial analysis available to the public, including the software. If Xcel can use this information to demonstrate why the city is wrong in its assumptions, it would be better to know now rather than another $10 million and five years down the road.
If Xcel can’t demonstrate that the city’s assumptions are wrong, then public confidence will have been restored and it’s full speed ahead.
And just one more thought. The city says that it will only rerun its modeling process should new information arise that could substantively change its financial calculations. Well, I’m afraid that such information has arrived.
Liquid gas exports, which are being enthusiastically rushed forward by both Democrats and Republicans, are estimated to double or even triple the price of natural gas domestically over the next decade. Some large utilities have already traded their use of coal for long-term, fixed, low prices on natural gas. It is therefore likely that the city might have to pay three times more for its gas than a major player in the power generation industry will have to pay. Let the recalculations begin.
Also, the city must be aware that a good deal of research done since it began its municipalization process now raises the very real possibilty that producing, transporting and burning natural gas for power generation may well be worse than coal when it comes to global warming. This too could radically change the cost for operating a municipal electric system whose goal is to fight global warming. If gas is out, a mix using far more renewables will be required to meet that environmental goal and the city’s own modeling has already shown that using such a heavy renewables mix pushes the cost of municipalization beyond the city’s selfimposed requirement to meet or beat Xcel’s prices.
This opinion column does not necessarily reflect the views of Boulder Weekly.