Posts tagged franchise agreement

Xcel condition ends talks about possible wind deal

Several weeks of intensive and committed negotiations with Xcel Energy about the possibility of a wind purchase plan with Boulder ended this week, when Xcel refused to drop a condition that City Council agree to put a 20-year franchise on the ballot in November, without a corresponding wind agreement.

Xcel wanted City Council to put both the franchise paired with a wind deal and the franchise by itself on the ballot.  City staff had been working with Xcel to develop a proposal for council that could have included the franchise if it were paired with the increase in renewable energy that was associated with the possible wind agreement.

City staff advised Xcel multiple times that council support for a standalone franchise was unlikely. During each of these conversations, the utility’s representatives indicated they wanted to keep negotiating and take that issue “under advisement” later. On Tuesday, July 12, Xcel communicated a final determination that it would not agree to a wind deal at all if the standalone franchise was not a part of the proposal to council.

The city’s energy future goals include stable rates, more local control and a decreased carbon footprint.  While the franchise paired with significantly increased renewable wind energy would have moved toward some of these goals, the franchise by itself does not.  

Since then, Xcel Energy has continued to provide electricity to homes and businesses in the city without a franchise agreement, as required by state law. The city, meanwhile, has worked to define the community’s goals for its energy future and analyze a variety of paths for achieving them. One of these has been the possible creation of a municipally owned power utility.

In late May, Xcel outlined a proposal that could help the community achieve some of its goals without creating its own utility. The proposal involved the city paying increased initial costs associated with the construction of a new wind farm in eastern Colorado. The turbines would have put 200 megawatts of new wind power onto the state’s grid. Boulder, in return for its investment, would purchase the Renewable Energy Credits. While the city was interested in exploring a wind agreement, both the staff team and council members had significant concerns about the proposal. Among them was the level of financial risk the city would assume in this venture. Representatives of the city, Xcel Energy and wind developer NextEra Energy Resources began negotiations in hopes of resolving these concerns.

Many of the questions were addressed; however, Xcel’s insistence on a standalone franchise ballot option has brought the discussions to an end.

“The City of Boulder understands why Xcel Energy wants a 20-year franchise agreement, and it is possible that council and voters might have approved that, if such an agreement came with a well-negotiated wind purchase plan,” said City Manager Jane Brautigam. “But we know that a franchise by itself would tie the city to a long-term energy future that remains largely dependent on investments in coal and a business model that prevents local communities from making decisions about their own energy futures. This runs contrary to the goals Boulder wants to achieve.”

City Attorney Tom Carr said the city appreciates Xcel and NextEra’s interest and work on the proposal, but that successful passage of this option, given the utility’s demand, was unlikely.

“We spent many hours at the table, and it was clear that all the parties were committed to trying to reach a mutually acceptable agreement,” Carr said. “I thank everyone for their participation, but sometimes there are problems for which there are no solutions.  This appears to be an obstacle we could not overcome.”

Carr plans to provide a written update on the status of the wind negotiations as part of a memo that council members will receive prior to their July 19 meeting. He will also give a brief verbal presentation on July 19 under a section of the meeting called Matters from the City Attorney, which typically occurs near the end of the evening. A public hearing on other energy options will proceed as planned. Because the staff team does not believe that it can make a good faith recommendation that council consider a standalone franchise, and because Xcel has said it will not move forward without one, the wind proposal will not be a part of that hearing.

The full memo to council will be available at http://www.boulderenergyfuture.com before Tuesday’s council meeting. Additional information and previous memos are available at that same website now.