[bouldercouncilhotline] Hotline: Muni Comparison

[kohls at bouldercolorado.gov]

Sender: Wilson, Ken

On Tuesday I discussed what I believe would be a valuable comparison of the modeled Boulder Municipal Electric Utility with other muni's of similar size and composition.  I would like to request that staff make this comparison.  If they lack the resources, or Council does not approve of this comparison, I will find a third party to do the analysis.  I think it would be a valuable comparison from a top-down perspective to give the current bottom-up model another test.  I believe council will be discussing how to control model runs tonight, so perhaps I can get an answer as to whether staff and council approve of this analysis.  Here is the specific request:

Take the budget (electric part only) of an existing Muni and do a quick analysis of total revenue and expenses.  Categorize expenses into power purchase, operations and maintenance, G&A and other categories as needed.  See what money the Muni has beyond basic expenses that either go back into the city or into renewable energy or conservation incentives or other items that are beyond basic expenses.  Then add to the city budget a debt service load that would support a the purchase of assets equal to 2X their revenue (it would be instructive to also use 1X, 3X and 4X their revenue, but not absolutely necessary).  The idea here is to see how the Munis would fare if they were paying off the acquisition of the distribution grid plus startup costs.  Of course, these Munis paid off such costs long ago.  This exercise would see how their financials would look if they had started the muni a few years ago.  We have discussed the virtues of several Muni's that are doing interesting things.  It would be good to see how they would operate under startup conditions such as a Boulder Muni would have during the first 20 years.

Here are some suggested Munis to evaluate.  Only Munis that do not have their own generation should be considered as the financials of Munis with large scale generation will be quite different:

Longmont
Ft. Collins
Others that meet the criteria and we can easilly get their financials???

This exercise is a common business practice to see how your prospective business would fare compared to others of similar composition and to see if your assumptions are in the ballpark with respect to existing businesses.

Ken Wilson