[BoulderCouncilHotline] Thoughts on the Muni

[Wallach, Mark]

   The upcoming decisions on whether to settle the current litigation with Xcel Energy, and whether the proposed Franchise Agreement is to be put on the ballot in November, are perhaps the most consequential decisions that the Council will make this year.  Considering the circumstances in which we presently find ourselves, and the issues the Council has had to deal with this year, that is saying quite a lot. And so, I thought it appropriate for me to detail my thinking on this issue, and not merely vote yea or nay, as I believe I owe that explanation to the community. Accordingly, here goes:

   As an initial matter, I want to be clear that I have, and do, support the muni. The advantages of a municipally owned energy utility are evident when one looks at comparative levels of reliability and rates that some of our sister cities experience with their munis. However, almost all of those were set up many years ago, and, as we have seen, the process for our liberation from Xcel has been arduous and expensive.

   Therefore, the issue before us is whether there are sufficient benefits to Boulder in the  Settlement Agreement and the Franchise Agreement to put the latter on the ballot for consideration by the voters of Boulder. In making this decision, I want to point out the following:

   1) First, we need to be clear about what  we are actually doing and what actions we are contemplating. No action taken by Council on Thursday will terminate the muni. The Settlement Agreement with Xcel will resolve a number of major legal issues between the parties, but will preserve our litigation status in the event that we subsequently resume our efforts to establish the muni. But the effectiveness of the Settlement Agreement is explicitly subject to  approval by the voters of the proposed Franchise Agreement. Therefore, we are also making a determination as to whether the proposed Franchise Agreement has enough merit to warrant being placed on the ballot.  It is by no means certain that this Franchise Agreement (and with it the Settlement Agreement) will be approved, but the issue is whether it is appropriate for the voters of Boulder to make that determination.

   2) This is far from a perfect deal. It leaves out elements that I would have preferred to see included, specifically some guard rails around potential stranded asset claims,  and as well as a greater commitment to reliability and performance standards.  And, if approved, it means at best a deferral of the dream of a municipally owned utility. But it does have other positive elements that recommend it, including the potential of a different kind of relationship with our energy provider than we have previously experienced.  I know that many people who have worked hard for the muni have a very high level of distrust for Xcel, a distrust that Xcel has richly earned. But if the Franchise  Agreement is approved,  Xcel will have the opportunity and obligation to perform as they have promised, and to create a new paradigm in the manner in which they interact with their municipal customer.  And, if they do not, we will have the ability  to resume municipalization no later than 2026 (and perhaps earlier), but this time with many of the outstanding  legal issues resolved as provided in the Settlement Agreement.

   3) Some members of the community have suggested that whatever defects exist in the Settlement Agreement and Franchise Agreement would be cured by additional time for negotiation. I disagree. Other than clarifying language changes which have recently been proposed to Xcel,  the documents represent the final product of vigorous, and occasionally contentious, negotiations. Our negotiating team has put in an enormous quantity of work, and has pushed hard for the best transaction for Boulder. Each of us can view the results of that work and determine whether they are satisfactory, but I do not believe that more time spent in negotiation would produce a substantially better deal. Similarly, the argument that we should continue to study this and put it on the ballot in 2021 is unpersuasive; it fails to recognize that deals do not remain in stasis for a year for the convenience of one party. And for those who have argued that there has been something undemocratic about the process I also disagree. These documents have been negotiated between representatives of our city and Xcel, but none of them have any effectiveness without the consent of Council and the voters of Boulder.

   4) Many commentators have questioned the effectiveness of the opt out provisions of the documents, and in conversation with representatives of Xcel I have requested greater clarity concerning the standards-based opt out provisions. But it seems clear to me that the 5, 10 and 15 year opt outs are unambiguous. I do not believe that any attempt by Xcel to litigate these provisions would be successful, and, for me, this does not represent a substantive concern with respect to our ability to return to the path of municipalization.

   5) For those members of the community who exhort us to fight on, because they believe we are close to achieving our goals, I suggest this is inaccurate. We still have years of litigation ahead of us, at exorbitant and unknown cost, and we would be continuing our efforts in a time of Covid, with diminished resources to carry on the battle. It is important for us to take a realistic view of the requirements to continue to fund this litigation and the timetable that is likely to be required to bring it to a successful conclusion. Very few of those who have emailed us have addressed this problem, and how it is to be resolved, but this is one of the crux issues in this conversation.

   6) Finally, and I say this as one who has supported the muni, and who ran on his support for the muni, I have always advocated that we should at least get to a go/no go vote on this issue. And now, that vote is here. It is not the go/no go vote I had anticipated. It is not the go/no go vote I would have preferred, with all of the costs clearly laid out before us. But it is the go/no go vote that we have. That is the nature of deals; they do not always come with all of the terms or on the schedule you desire. But that vote is upon us, and I believe it is a vote that the entire community must participate in. I cannot take the position that the voters of Boulder are either unwilling or incapable of making this decision, and that it is my duty to save them from themselves. That is a bridge I will not cross.

I will be listening closely to the staff presentation and the public testimony on Thursday with an open mind, and, frankly, with a desire to be persuaded; it is difficult for me to consider taking this path. But in the absence of some revelatory testimony (especially on the results of our recent RFP to alternative energy providers), it is my belief that there is substance to this agreement and it is time for the people of Boulder to  indicate the direction they wish to take.

    As a member of the Council, my primary responsibility is to vote in a manner that I believe best serves the needs of my community. And that is what I will be doing this Thursday. Some of you will support that decision, and others will, with varying degrees of vehemence, oppose it.  The only assurance I can give anyone is that my vote will represent my best judgment, in accordance with my understanding of the facts and my conscience.
And  if this Council elects to put the Franchise Agreement on the ballot, the voters of Boulder will have the opportunity to do the same.
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