[bouldercouncilhotline] Hotline: Additional Questions for Municipalization Study Session

[cmosupport at bouldercolorado.gov]

Sender: Wilson, Ken

A local engineering consultant, who has had more exposure to the City's financial model for municipalization than I have sent me the following comments. I think his points are excellent and should be discussed in the study session:

 1. The financial modeling has to be transparent:

a. The executable model has to be fully available to the public (and critics) so that all the hidden assumptions can be vetted.

b. The assumptions [forecasts] have to be varied over a reasonable range to test the conclusion.

2. The results of the model have to be comparable to long term operating conditions:

a. By this I mean that the model results for the first year that are to be compared to PSCO can’t just use “INTEREST” only bond debt service,

b. the rates must include the required principle payments that Boulder rate payers will have to cover in their rates.

3. The amount of renewable generation [CO2 reductions] in the model needs to start with at least as good as PSCo [in the year modeled]. The multiple runs of the model should then performed to inform the council and citizens as to what the incremental change in rates would be when MORE renewables are added.

4. The City should be cautious and consistent about its position on Smart Grid:

a. If the City is going to propose new CAP programs that rely on smart meters and near real time electric usage data;

b. And if the City is planning in its model to deploy new and innovative DSM programs;

c. then the Smart Grid may have some value and the model needs to incorporate that payment to PSCo.


With respect to the appropriateness of various types of questions that I and others may ask at this study session, another friend dug up a quote that I think is perfect for this occasion:

I’m reminded of a great quote by Ernest Fitzgerald, former DoD civilian cost analyst, whistle blower, and member of Richard Nixon’s enemies list.  In congressional testimony on the C-5A aircraft overrun, Fitzgerald said:

“All great government programs have two phases.
In Phase 1 it’s too early to tell.
And in Phase 2, it’s too late to stop.”

Finally, I think there are some lingering misconceptions about what Smart Grid City is and what it isn't.  As an engineering consultant who has been working in the smart grid space for five years, I feel some obligation to set the record straight.  Before I do that I want to inquire about the current status of the large customer trial (of which I am a participant) that Xcel is conducting with Smart Grid City.  It is a multi-year, multi-part study of alternate rate structures using smart meters and Smart Grid City.  I selected the plan where on Peak Energy Days, I am paid by Xcel 47cents per kWhour saved between 2 PM and 8 PM.  Last month they recorede that I saved 18 kWhrs during the specified times.  This is about what I had estimated I had saved.  So it seems to be working at my house.  I will ask for a review of the overall program and make a report.

Ken Wilson