[bouldercouncilhotline] Hotline: RE: Community members think the City and City Staff are supporting 2B and 2C

[kohls at bouldercolorado.gov]

Sender: Gray, Crystal

Ken:  I read your HOTLINE posting and have to comment on a few things that you said.  

I absolutely disagree with you that Jonathan Koehn's comments in the paper were 'speculative' and made as an argument about why people should vote in favor of the ballot issues.  What was reported that Jonathan said - "But the city could also have some long-term agreements with electricity providers in place before bonds are sold"- was a repeat of the factual information that has been given to us - especially in the May 10, 2011 "Boulder's Energy Future" study session binder which contains the feasibility report and business plan.  As outlined in the business plan, power purchase agreements (PPAs) need to be secured in advance of the utility operation - the report further states the reasons for this.  There was discussion that the PPAs would provide price certainty before the last off-ramp but the PPA would be enforced only if the utility was formed - this would be a contingency in the PPA contract.  

You also comment on natural gas prices being highly variable, uncertain  etc.  All power purchasers (Munis, IOUs, Co-ops, Military, etc) deal with this and there was even a speaker that talked about the monitoring of natural gas and electricity price futures and how that is predicted, with built in uncertainties, and published by price clearing houses and marketeers such as Ventyx and Powerlytx. We are in the same situation with Xcel and others on this.  

You state that operational costs will be unknown until operations actually start and you ask where would all the green jobs go if we contract operations out. Our report states that operational costs will be known before operations are started and budgeted ahead each year to derive rates - the point of the business plan and the feasibility report is to identify the costs based on actual running of utilities and the system in Boulder.  The jobs of maintaining, running and governing the utility stay in the community and the report even states that in many cases the actual employees can come from the local investor owned utility's former employees.  In addition there can  be savings by combining billing of our existing utilities with the new Muni. That is just one opportunity and the business plan addresses the operations in detail.  

In reading  the 5"thick binder with all the reports brought back the two years of careful analysis that was provided to the city council and the public. I just don't get where you can say - "So for staff to defend a position about future costs and the resulting viability of the proposed municipal utility is a big stretch".  Our years of work included costs and viability. We had volumes of reports (that used conservative projections), we posed questions, ran models, had national experts peer review our consultant’s work, local experts and CU professors again reviewed the work and of course we had our own residents weigh in. We also looked at national munis around the nation as well as our own neighbors of Ft. Collins, Longmont, Colorado Springs etc., and yes, we even learned what pitfalls  to avoid. 

I do think it is regrettable to infer that the staff is acting improperly when they cite these reports or that the work is incomplete and that future costs have not been considered.  

I have attended almost all of the 'debates' regarding the 2B and 2C ballot issues (except the League of Women Voters due to a cold).  I have heard the intro of process regarding 'Boulder's Energy Future’, the summary of reports and the description of the ballot issues by staff - who were invited to present this before the debate started.  I have never heard staff  step into an advocacy role, they have stayed with the facts that are documented on our web site,  and if a question is directed to them that is political they refer it to the 'pro and con' presenters. 

As for your concern that people are reluctant to speak out because they do business in the city and with the city (and they disagree with the city)  I would point out that if they want to do business with the city that we have a professional finance department that handles all bids according to policies and the city council does not get involved in the selection of vendors, consultants etc. 

As for the "Know your Power" booklet - it contains a summary of years of reports and also contains a pro and con section.  The city staff announced to us, and the public, that it is available to anyone and it is the goal of many of us on council to give the public the facts and findings of the reports that council has used to make their decisions so the voters can make an informed decision.  I have a stack of these that I bring to events for those that want to know more and of course it is on the web.
Crystal
________________________________________
From: Wilson, Ken
Sent: Thursday, October 06, 2011 9:05 AM
To: HOTLINE
Subject: Community members think the City and City Staff are supporting 2B and 2C

I have received comments from several community members who think that the City and City Staff are supporting Ballot Issues 2B and 2C in ways that are not appropriate.  The article in this morning's paper is an example.  The last paragraph says: "But the city could also have some long-term agreements with electricity providers in place before bonds are sold, according to Jonathan Koehn, Boulder's regional sustainability coordinator."  This statement is clearly speculative and definitely seems to have been made as an argument about why people should vote in favor of the ballot issues.  For one thing, the municipal utility would not be formed for years - probably many years.  Natural Gas prices are highly variable and to speculate on how generation might be purchased in future years, and on agreements that might be signed before a utility is even formed (or ever formed based on future bond conditions) is unrealistic. There are also operational costs that will not be known until operations are actually started.  Yes, a utility could contract out all the operations to an outside company (where would all the green jobs go?) but such contracts would no doubt have many provisions for additional charges for unforseen problems.  My experience with big projects like this is that there would be many unforseen problems that could raise costs significantly.  So for staff to defend a position about future costs and the resulting viability of the proposed municipal utility is a big stretch.

I also understand that staff members are still participating in forums, defending the City's optimistic and improbable business case as if it was a plan that was sure to happen and sure to succeed.   The City is also apparently providing "Know Your Power" booklets that support municipilization to organizations that are adamently in favor of 2B and 2C.  Renewables Yes is using the city produced video on their website as though it were a campaign commercial.  I have been told that the City's actions have had a chilling effect on some people who would like to speak out against 2B and 2C because they do business in the city and with the city and don't want to oppose something the City is actively supporting.

In summary, I think the City is on thin ice here with respect to legal issues of supporting ballot measures.  I would ask the City Manager and City Attorney to review these issue so that we stay within the law and also do not have the appearance of supporting ballot measures.  These issues are very polarizing and the City should not be adding to this problem.

Ken Wilson
Deputy Mayor and Council Member