[bouldercouncilhotline] Hotline: Energy Future questions/issues

[kohls at bouldercolorado.gov]

Sender: Appelbaum, Matt

I suspect all of these are being worked on, but I just want to make sure that a few key issues are thoroughly evaluated in time for our July meeting - and if possible, in time for next week's public session on the 28th:

-- There seemed to be some agreement on council that any needed up-front funds for municipalization (or, presumably, for the even more expensive Xcel proposal) might come from an increase in the current CAP tax.  But that tax was carefully set up to charge each customer class (residential vs. commercial, primarily) based on their expected "returns" from CAP programs.  That assumption clearly would not be appropriate any longer, so the relative contributions would need to be completely reevaluated.  Perhaps that makes the CAP tax a poor choice for this purpose, but it still, for me, seems better than an entirely new, earmarked tax of some sort.

-- Xcel's proposal essentially has Boulder purchasing a wind farm (RECs) and then hedging energy costs.  While we presumably couldn't exactly replicate their proposal (and thus might not be legally required to get competitive bids), could we effectively do so by acquiring similar RECs and then in various ways hedging energy costs?  What would that entail?  Would we really lose any benefits, or would we gain control and completely resolve issues like "avoided costs" and "curtailment" (among others) that come along with the Xcel deal?  Why wouldn't we just go out for a competitive bid regardless, unless there are some essential components of the Xcel deal  that we couldn't replicate?

-- More generally, we know that staff is looking at the potential benefits of setting up a "municipal energy authority" regardless of how everything else plays out (as is at least one of our neighboring cities).  I'd like to understand quite specifically what this would - and more importantly, what this wouldn't - allow Boulder to do, assuming that municipalization isn't pursued/approved.  For example, since we would still get our power from Xcel (with or without a franchise), how are rates set?  Are all of the limits on solar gardens still in effect?  Can we buy power from other providers and actually use it, or just get the RECs, or what?  Are we still (presumably) on the hook for all of Xcel's fossil fuel plants/projects?  These may not be the right questions, but I'd like to see (and I think the public would like to see) a very specific list of things we can do and things we can't do - particularly since some folks seem to believe that even without a muni there would be all sorts of energy tools at our disposal.

-- Finally, and obviously, I trust we will get very, very specific comments on the issues raised re our consultants' initial analysis of acquisition (and some related) costs.  While we can't necessarily respond to and evaluate every concern, any credible issues should be resolved as much as possible.  If that results in an increase in estimated costs, so be it.

Thanks -- Matt