Xcel went fishing and caught a few fish

by Leonard May

0
Wikimedia Commons

Xcel went fishing with its “final” offers of two weeks ago. But on Monday night, few on Council took the bait.

Council made the right decision to continue with the municipalization of our electricity supply rather than abandoning it at Xcel’s behest. It was gratifying to see the number of young people engaging with the issue.  After all, it is they who will bear the brunt of a decision to abandon decarbonizing our electricity supply.

Sam Weaver described how the municipalization has critical social justice implications — that the older generations (full disclosure: my generation) “have profited from the emissions of carbon dioxide but the worst harms will be visited upon the following generations.” Mr. Weaver went on to say he did not believe it would be appropriate for him to override the consistent municipalization support from voters that got us this far, by abandoning municipalization.

Three council members saw things differently. Checking-in with the voters because of costs and timeline were common themes from council members opposed to continuing with municipalization. Andrew Shoemaker asserted (incorrectly) that “the City is now acknowledging that it’s going to cost an additional $80-$200 million in costs to separate from Xcel.”

Xcel’s claims should not be confused with facts. The fact is the City has never accepted Xcel’s separation costs claims.  Determining the costs is the purpose of the regulators’ proceedings. Mr. Shoemaker then appeared to attempt a reframing of the discussion away from the fundamental issue — do we move forward with municipalization or not — by getting into the weeds on tree trimming costs and the timeline.

Jan Burton, like Mr. Shoemaker, accepted Xcel’s claims as facts, asserting (also incorrectly) that the City will “absolutely blow through the $214 million” cap the voters approved. Ms. Burton viewed the municipalization process like a Trumpian dystopia, where no progress has been made in the courts, on renewables or on decarbonization. This too, is incorrect as noted earlier in the meeting by Mayor Jones.

Early in the meeting Ms. Burton asked staff a question that could easily mislead the public — “how much has the City exceeded the amount it was authorized to spend for municipalization through the utility occupation tax (UOT)?” 

That’s like being asked if you still have a drinking problem. The UOT for funding the municipalization process established a tax cap, not a municipalization spending cap, so there is no exceeding of authorization. The City has collected approximately $10 million over five years ($2M/year) from the UOT.  Over the past five years the City has spent approximately $8.9 million from the UOT and another approximately $1.1 million from general fund. The fact is, the City has slightly underspent its budget. Focusing on groundwork costs rather than the long-term benefits of municipalization distracts from the essence of the issue: decarbonizing, decentralizing and democratizing and the huge financial benefits.

To put costs into perspective, Xcel takes approximately $35 million out of Boulder in profits each year. Between 2003 and 2012, profits increased at approximately 8 percent annually. If Council had accepted Xcel’s offers, projecting that rate of increase forward for the next 20 years would result in a cumulative total profit paid to Xcel and sucked out of the local economy of $1.6 BILLION. Yet, certain council members are sounding the alarms at spending $2 million, but are willing to forego capturing $1.6 BILLION in profits from Xcel. Their argument certainly benefits Xcel. As for the benefit to Boulder citizens, not so much.

As Mary Young commented, fiscal responsibility requires that we continue with the municipalization process.

Ms. Young also described how social change takes a long, long time and requires patience. She noted that it took 72 years for women to gain the right to vote. Decarbonizing, decentralizing and democratizing our electricity supply and affecting a paradigm shift from the early 20th century monopoly utility construct is a big social change.

And so Boulder proceeds. I wager that there will be future “final” offers from Xcel. After all, $1.6 BILLION in profits is hard to walk away from.

We should thank City Council for keeping things in perspective on Monday and enabling Boulder to be the fish that got away.

This opinion column does not necessarily reflect the views of Boulder Weekly.