Municipalization process 11 12 12


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Municipalization process 11 12 12

  1. Municipalization of ElectricPower Monopoly in Boulder, CO Roger Koenig 11/12/12 303-443-4133
  2. Why is this an issue today?Question 2C(allowing the formation of a municipal utility)Yes: 13,784, 51.93%No: 12,757, 48.07%The ballot language allows the city to sell unlimitedrevenue bonds to condemn assets and pay separationcosts plus stranded asset settlements to Xcel Energy.
  3. 2011 Ballot Question No. 2CLight and Power UtilityShall the City of Boulder have the authority to establish, acquire, erect, maintain, andoperate, by any lawful means, a municipal light and power utility with programs andimprovements that include without limitation generation plants, renewable energy, energyconservation, and distribution systems, with all necessary powers appurtenant thereto if thecity council determines that it can acquire the electrical distribution system in Boulder andcharge rates that do not exceed those rates charged by Xcel Energy at the time of acquisitionand that such rates will produce revenues sufficient to pay for operating expenses and debtpayments, plus an amount equal to twenty-five percent (25%) of the debt payments; and withthe reliability comparable to Xcel EnergyShall the City, acting through the utility, issue enterprise revenue bonds payable solely fromthe net revenues of the utility, to finance the costs of acquiring from Xcel Energy and anyaffiliate thereof, and constructing, relocating, installing, improving, completing or expandingthe equipment, facilities and other assets comprising an existing electric distribution systemwithin or outside the City’s boundaries, and paying all necessary or incidental costs relatedthereto, and shall the City have the authority to adopt all means necessary or appropriate tocarry out the requirements, purpose and intent of this measure? To date, City Council has allocated an additional $300,000 from the citys general fund to cover municipalization cost overruns. Already in violation of the ballot charter?
  4. Summary Take-AwayThe municipalization decision criteria measurements, as designed by Heather Bailey andstaff, are rigged. If they pass City Council vote approval November 15, Bailey will havelittle trouble in avoiding a Council municipalization “off-ramp decision” and subsequentvote to proceed to condemnation court in March 2013. The rest of the process ismostly for show. Bailey is staffing up now for starting a Municipal Power Company.After condemnation filing, we pay for a multi-year legal battle with Xcel Energy, theFederal Energy Regulatory Commission, and many other electric power users inColorado. Legal costs are estimated near $10 million and will need taxpayer funding.Businesses will avoid expansion or location in Boulder while this power battle rages.How can we protect Boulder?1. Write and call 6 members of City Council before Thursday, November 15Vote NO on Heather Baileys "off-ramp avoidance" criteria.Vote YES on Ken Wilsons "municipalization decision addenda" at Council onNovember 15.2. Fight the city’s annexation of the East Boulder periphery properties in the interestof the public and property owners – and all Boulder residents. If the city doesn’t havejurisdiction over some critical Xcel assets, they can’t seize them throughcondemnation. Who wants the 1923 Valmont power plant anyway?
  5. Are human greenhouse gas emissions a global problem? YES!
  6. Is a Boulder City seizure, settlement and separation of Xcel’s distribution assets in Boulder a solution to greenhouse gas emissions? NO!
  7. Boulder City GovernmentHeather BaileyExecutive Director of Energy Strategy andElectric Utility Development Compensation exceeds $250K per yearConsists of the Mayor, Deputy Mayor and City Councilseven council members In Charge of City Manager Jane Boards, Commissions,implementing initiatives Brautigam appointed by Divisionsapproved by the Council City Council Boulder Energy 17 staff members also Future Project City Manager’s 17 City Stafflisted to aid the project Directed by Directors members Heather Bailey Source:
  8. Boulder Energy Future Project Resources Events leading to an increase in funding:• Voter-approved Measure 2B instituted a tax to provide $1.9 million to the project annually during the initial phases to cover study expenditures.• The City Manager recommended that the council allocate $300,000 from the city’s general fund to cover staff member costs.• Some of the unnamed consultants included in staff member costs receive rates of $900 per hour. (Source: The Boulder Daily Camera, Rising Costs in Boulder Municipalization Study, October 29, 2012)• discloses that the project has employed a number of consultants, without providing their identities.• The project has selected Duncan & Allen as FERC attorneys, and Duncan, Ostrander & Dingess to represent the city in any future condemnation proceedings with Xcel Energy.
  9. ---------------------------------------- Left Blank! ---------------------------------------------------- City Council will vote November 15, 2012 on the adequacy of the “charter requirement” proposed metrics as the “off-ramp” decision criteria in fulfillment of Ballot Measure 2C. Following this vote, other criteria may not be considered.Heather Bailey Verbal:February 25th - Council Study Session to discuss complete strategy options and askclarifying questions/request further information. No votes are taken at Study SessionsMarch 19th - Council Study Session to vote on complete strategy options.
  10. State Control of Power Monopolies? "Praise Joseph Stalin, the great protector of communism!" Didn’t work out so well.
  11. Likely Outcomes of Boulder City Council Control of Local Monopoly• Punitive Commercial Rate Structures(80% of total demand)• Forever lose consumer rate and reliability protection of Colorado Public Utilities Commission – No legal recourse with City Council• Technical and manpower limits to power reliability
  12. These are “feel-good” criteria. Not measurable.
  13. Xcel assets in Boulder are not a local grid (they serve the whole area) Xcel monitoring and dispatch are in remote bunker facilities near Golden – not Boulder. Not condemnable!
  14. Transmission StationsBoulder City LimitsLouisville/Lafayette/Superior City LimitsTransmission linesBoulder Council cannot condemn Xcelassets that are not within city borders.Hence the letters and proceedingsstarted to annex critical Xcel propertyand feeders on the East side of Boulder.Stop annexation! You have legal rights.
  15. Closing the Transmission Loop: South Boulder County on the way to Louisville and ValmontSeparation Problem: Belongs to Xcel Energy. Can’t be condemned since outside of Boulder city.
  16. The “Not in Boulder” Electrical Transmission LariatBoulder Valmont Plant Leggett Terminal
  17. Existing Boulder Commercial Rates are like sausage. Don’t knowwhat is inside. So how can Heather Bailey claim rate equivalence?Modeling commercial rates on only three category averages creates inflated revenueexpectations for a Boulder Municipal Power Company – plus “sticker shock” for businesses.
  18. Big Problem with Bailey’s decision metric! The majority of existing commercial ratesdon’t match simple categories. 80% of Boulder power is commercial and industrial.
  19. Primary Transmission Customers in Colorado Will stop investing in Boulder Will self generate rather than participate in Boulder municipal
  20. Bonding Boulder Municipal Power - by Gaming Debt Service Coverage Ratio(Interest time deferrals lead to customer power rate increases in later years) Easy to Game DSCR with Deferred Tranches
  21. Boulder Municipal Power Monopoly Decision $10 million of lawyers and hearings proceeding 2013 to 2017(?) followed by: $300 to $600 million of debt for: • Xcel asset settlements • separation engineering • new dispatch + transmission construction • start-up costs for service and ops people • punitive rates that drive business outVersus • Incremental renewable generation programs and incentives with return on investment for business and gov. • Demand destruction incentives where Xcel suffers, not a city power monopoly suffering • Negotiate and implement a broader set of interconnections with Xcel and the PUC for micro grids (University of Colorado example)
  22. Dear Council Member,Please vote NO on proceeding with inadequate financial, rate and reliabilitydecision criteria for Municipalization on November 15. I would like tocontinue living or working in Boulder with affordable and reliable power.There are far less costly and lengthy paths for implementing renewablegeneration and energy efficiency goals in our city.council@bouldercolorado.govCall council members who have supported proceeding with Heather Bailey’s“off-ramp avoidance” criteria, and ask them to support open governance forBoulder. Publish decision dates, reliability concerns and financial risks.Matt Appelbaum 303-499-8970 AppelbaumM@bouldercolorado.govKC Becker 303-218-8814 beckerk@bouldercolorado.govMacon Cowles 303-638-6884 CowlesM@bouldercolorado.govSuzanne Jones 720-633-7388 joness@bouldercolorado.govLisa Morzel 303-815-6723 morzell@bouldercolorado.govTim Plass 720-299-4518
  23. What else can I do?E-mail me to receive an invitation to join a new“PLAN-Rational” 501(c)4 education and issues non-profit that represents consumer, business, andtaxpayer rights in Boulder.Thanks for being involved in our local democracy!