City News

Municipalization ballot measure 2E passing by significant margin, 310 failing
City outlines implications for possible creation of electric utility

While some votes remain to be counted tonight, ballot measure 2E appears headed for a significant victory with a competing ballot measure 310 poised for defeat.

The approval of measure 2E, pending final results, will give the city flexibility in moving forward with the initial 2011 voter-approved path toward exploring the creation of a local electric utility while also recognizing concerns about unforeseen costs and customer representation. Specifically, measure 2E puts a limit on the amount the city can pay to acquire the system and clarifies some out-of-city service issues. The ballot measure includes the following:

• Setting a limit of $214 million for acquisition of Xcel’s assets and stranded costs, if stranded costs are paid in one lump sum.
• Allowing out-of-city customers, if any are included, to serve on the advisory board of a potential local electric utility.
• Facilitating utility choice on a neighborhood-by-neighborhood basis to potential out-of-city customers.
• Requiring rates of out-of-city customers to be the same as those in the same class of in-city customers.
• Limiting brokerage fees associated with acquiring debt to industry standards.

These requirements are in addition to criteria passed by voters as part of the Charter in 2011. These are:

• Rates must be equal or less than those offered by Xcel Energy at the time of acquisition.
• The utility must have sufficient revenue to cover operating costs and debt, plus carry a reserve of 25 percent of the debt amount, referred to as “Debt Service Coverage Ratio.”
• Reliability must remain comparable to that being offered by Xcel Energy.
• There must be a plan to increase renewable energy in the supply.
• There must be a plan to decrease greenhouse gas emissions that result from a fossil-fuel based electricity supply.

The original 2011 voter-approved Charter language on municipalization can be found at –http://www.colocode.com/boulder2/charter_articleXIII.htm. The provisions in 2E will be added to the existing Charter requirements.

“We are pleased with the results of today’s election concerning the municipalization ballot items,” said Heather Bailey, executive director of energy strategy and electric utility development. “The additional requirements set by 2E will address concerns about the unknown amounts of acquisition and stranded costs associated with forming a local utility and help define the path the community would like us to take towards creating the electric utility of the future right here in Boulder.”

The next steps in the municipalization exploration study will focus on the negotiation and acquisition process associated with obtaining the infrastructure the city would need to operate a safe and reliable local electric utility.

All information related to Boulder’s Energy Future and the municipalization study is available atwww.BoulderEnergyFuture.com.

–CITY–