Boulder votes to buy back the grid to accelerate renewables

Greentech Media

Voters in Boulder, Colorado overwhelmingly approved a ballot measure yesterday that moves the city closer to buying the local grid from the state’s largest utility, Xcel Energy.

Question 2E, a ballot measure that set a target price for purchasing Xcel’s grid assets, was passed with more than 64 percent of the vote.

Question 310, an opposing ballot measure that would have required additional approval of spending and limited Boulder’s municipalized grid to the city limits, only received 34 percent of the vote.

The competing measures set up a small campaign war in the Boulder area leading up to yesterday’s election. According to The Denver Post, both sides cumulatively spent $864,000 to rally voter support in recent months. That’s in addition to the $1.7 million Xcel has spent over the last two years to combat Boulder’s municipalization plans.

Advocates of municipalization declared Tuesday’s results a resounding victory, painting the election as a David-versus-Goliath battle.

“We were outspent by more than 2-to-1, yet we won by 2-to-1. Xcel had the war chest, but we had the army, and this campaign proved people are more powerful than money,” said Steve Fenberg, executive director of New Era Colorado, one of the grassroots groups leading the election campaign in support of municipalization, in a statement.

Supported by $300,000 in crowdsourced funds from more than 6,000 donors (including $65,000 from the Sierra Club), New Era Colorado was able to wage a door-to-door campaign in support of the ballot measure to buy the grid.

While Xcel was not directly responsible for putting the opposing measure on the ballot, it did help bring together more than $550,000 in donations — with $330,000 coming from the utility itself. That puts Xcel’s campaign to defeat Boulder’s municipalization at roughly $2 million.

Boulder’s multi-year fight to localize the grid has been watched closely in energy circles. It is the first city in the U.S. to municipalize specifically to support more clean energy and reduce carbon emissions, following a similar trend underway in Germany. And if Boulder finally breaks away, it could encourage other cities to do the same if local residents are unhappy with the pace of distributed generation deployment.

Proponents of a municipal grid in Boulder argue that Xcel is moving too slowly on developing renewables. Although the utility has been a leader in wind power integration, it still gets nearly 60 percent of its electricity from coal and another 22 percent from natural gas. Advocates in Boulder want the 100,000-person city to be run almost entirely on renewables — and they say localizing the grid is the only way to get it done quickly.

For its part, Xcel has helped leverage enormous amounts of wind, and, increasingly, solar. Due to its size and deep understanding of the energy market, Xcel says it is better equipped to provide renewable energy at lower costs. For example, the utility recently procured 170 megawatts of solar and 450 megawatts of wind at prices competitive with natural gas.

Boulder officials released a position paper over the summer concluding that a municipal utility could offer 50 percent more renewable energy than Xcel at comparable costs. Municipalization supporters pointed to the study as a reason for the city to break away.

“Studies show Boulder can replace coal with solar and wind at the same cost over the long run,” said Nancy LaPlaca, a Denver-based consultant who was formerly a policy advisor to the Arizona Corporation Commission. “It just makes sense.”

But Xcel criticized the study, saying it assumed the production tax credit for wind would stay in place and failed to account for additional infrastructure costs associated with integrating renewables.

“If wind power grows in the five to ten years it would take Boulder to form a utility, it is possible Boulder’s wind requirements would need additional infrastructure, because existing wind would already have used the physical limits of the power system,” wrote Xcel officials in a paper countering Boulder’s conclusions.

Cost is still the big question in Boulder’s municipalization push. Yesterday’s ballot initiative set a cost cap of $214 million for buying poles and wires from the utility. But Xcel says the cost of all its local grid assets could be three times that much.  Although advocates of grid localization are celebrating a win this week, there’s still a lot of negotiating and legal work left before Boulder can officially create its own utility.

This article was first published at Greentech Media. Reproduced with permission.