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SOLUTIONS 9/4: Municipal strategy for clean energy

By Huck Fairman

Our town of Princeton, the university and many of the local citizens have taken a variety of steps to reduce emissions by using less energy and producing or buying cleaner energy. These steps include turning to electric vehicles, installing solar panels and/or geothermal systems, using LED light bulbs, biking, enhancing public transportation, and improving insulation and windows.

But Boulder, Colorado, and possibly Pueblo, Colorado, have, for 10 years, been thinking about going beyond the above list of green steps. Boulder’s idea was to create a town-owned public power utility that would replace, with greener energy, the energy generated by private energy companies.

In Boulder, the private utility, Public Service Company of Colorado, is a subsidiary of Xcel Energy. Xcel’s mix of power included, in 2019, 8% coal, 12% natural gas, 6% nuclear and a number of other sources. But its 2018 Colorado Energy Plan would reduce coal-fired generation, and will add wind, solar, and storage capacity, leading by 2025 to a 60% reduction of emissions.

In 2019, Boulder offered to buy Xcel Energy’s assets inside the city for approximately $93 million, which the city stated was double the original cost of those assets. But the plan stumbled when the coronavirus slowed the city’s economy. The city had to re-evaluate whether under the new circumstances starting a municipal utility was the best use of its assets.

This led, in July 2020, the city and Xcel to reach a tentative agreement for a partnership. Included in the agreement was:
• a pathway for Boulder to achieve 100% renewable electricity, including updating its electric grid
• both parties working collaboratively to allow innovation and development
• the city is permitted to use Xcel’s distribution poles to implement a broadband system
• allowing Boulder to in the future create a local electric utility
• allowing Boulder to use its election process to approve or terminate the agreement

It is notable that Xcel Energy currently carries a significant debt load, now a debt/equity ratio of 173%. The company also posted “negative changes” to its working capital in 2017, 2018, and 2019. How this will affect the company’s interest and ability to operate is unclear. But that it is willing to work with Boulder should extend some local political support.

Pueblo’s power company, Black Hill Energy, has proposed a 200-megawatt solar project, which may provide it with more public support.

While an arrangement like Boulder and Xcel have agreed upon, but between Princeton and PSE&G or other power providers may not be possible or practical, the Colorado examples do provide ideas and examples for towns and maybe counties or even states to consider and negotiate for, in the pursuit of cleaner and cheaper energy, which given the climate crisis, is in some form, essential to our well-being.

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