My statement on 9/4/2017 on moving forward with municipalization:
Why I've changed my mind on municipalization
Like many in our community, I’ve supported moving to municipalize our energy system. I voted for the measure in 2011 and have supported continuing the effort as a current candidate for city council. But two major outcomes last week have changed my thinking — the partial rejection of Boulder’s application to the Colorado Public Utilities Commission and Xcel’s proposal to move to 55% renewable energy by 2026. Given Colorado’s regulatory burdens for Boulder to municipalize, the economic benefits of municipalization have fallen to the extent that I no longer believe funding municipalization is in the best interest of the city. We need to move forward with a strong local strategy to meet our climate goals.
Xcel’s move finally acknowledges the economic benefits of transitioning from fossil fuels to renewables — and the utility has fought to keep those benefits for itself. The economic incentives to shut down coal plants strongly validate Boulder’s main reason to municipalize: wind and solar cut costs significantly compared to coal while massively reducing the system’s carbon footprint. With Colorado’s strict regulatory structure and the state’s inadequate 30% renewable target, municipalization had been the only real way to 100% clean energy. Xcel has now shown a path to move far beyond the state requirement and closer to Boulder’s goal.
Boulder’s move to municipalize has been difficult and uncertain, largely because we’re the only city that’s tried to create a utility in decades. As the PUC commissioners stated, there is “no playbook” for separation, leading to a long, iterative process. A partial rejection of Boulder’s application offers a path forward — but with significant time, expense, and opportunity costs — and an earliest cut-over by 2024. Both the increase in debt the city would require and the delay in acquisition of renewable generation reduces the benefit of a Boulder utility relative to Xcel. We need a different strategy and set of investments to ensure we reach our climate goals. While the economic benefits have changed, Colorado’s monopoly energy system has not. Xcel’s structure does not give incentives to increase city autonomy or to share cost-savings in moving to renewables.
Boulder’s municipalization would have allowed the city to control the supply-side variables — sourcing for fuels, distributed generation, and local control of resources — which will be harder to impact without separating from Xcel. But as a city, we can and need to make large investments in demand-side solutions to reduce the carbon gap from our energy supply immediately. We can take further action on the transportation and land-use portions of the city’s carbon footprint as outlined in Boulder’s Climate Commitment to reduce all emissions 80% by 2050.
Whether the utility occupation tax passes or fails, I will push forward aggressively on our best options to meet our climate commitment. The effects of not combating climate change are massive. We have a responsibility to put our limited resources toward the most effective long-term solutions and continue to push forward on Boulder’s climate goals.
Read more about my plan to move forward at electEricBudd.org/muni.