Xcel, Boulder negotiate over solar rebates, energy-efficiency programs
Officials from the city of Boulder and Xcel Energy met last week to try to hammer out an agreement about if and how the utility will continue to allow its Boulder customers to participate in its solar rebate, long-term wind power, solar gardens and energy-efficiency programs.
In November, Boulder voters approved ballot measures that allow the city to break from Xcel and form a municipal utility if the elected leaders choose to do so.
In late December, Xcel attorney Paula Connelly sent a letter to the city outlining Xcel’s position that continuing to provide “discretionary programs” — including Solar Rewards and a proposed long-term Windsource — to Boulder’s customers could hurt the utility’s other customers because the city may leave before the utility recoups the full return on its investment.
“We want to keep the people in Boulder as our electric customers, and we are hopeful that the city will find that the formation of a municipal utility is not a good proposition for Boulder,” the letter reads. “However, given the present uncertainty and the fact that Boulder customers make up a disproportionate share of our discretionary program participants, it could result in a situation where our other Colorado customers are paying more to support these programs in Boulder and that the public policy benefits of providing these programs will be lost if Boulder leaves our system in the future.”
The letter invited the city to work out an agreement with Xcel that would allow some of the programs to continue and would ensure that Xcel will be compensated for any investments the utility makes in Boulder customers beginning this year if the city severs its ties with the utility in the future.
Connelly lays out suggested agreements in her letter, including that the city would take over the payments that Xcel makes to customers who install solar panels and that Boulder would compensate Xcel for any energy-efficiency rebates that the utility might distribute, including incentives for upgrading heating and cooling systems.
Connelly also proposed that Xcel not allow Boulder customers to participate in two upcoming programs: solar gardens and long-term Windsource. Solar gardens will allow groups of customers to own shares in a solar array that is not located on their own properties, which will give renters, condo owners and those with shady roofs the opportunity to invest in solar.
The proposed long-term Windsource program would allow large electricity customers the opportunity to purchase wind power for a stable rate under a multi-year contract. The cost per kilowatt-hour would start out slightly higher than the standard Windsource program — which allows customers to stop buying wind power at any time — but, over time, if fossil fuel prices increase, those customers could receive money back from Xcel.
Any final decision about how and if Boulder’s access to Xcel’s discretionary programs should change will have to be made by the Colorado Public Utilities Commission, which regulates Xcel.
“We wanted to see if we could work this out with the city before going to the PUC,” said David Eves, president and CEO of Xcel’s Colorado operations. “The pressure is on us if this continues. if we don’t have an agreement, there will be questions from both sides.
“Hopefully, we get it resolved,” Eves said. “If not, we’re probably approaching some kind of filing with the PUC. our goals are not to disrupt (these programs) for our customers, but we don’t want to spend a lot of resources.”
Boulder City Attorney Tom Carr replied to Xcel’s letter with a short note Jan. 19.
“The city’s position is that we and Xcel Energy should work together to do everything we can to protect Xcel Energy’s customers in Boulder, while Boulder continues its voter-approved exploration of the costs associated with future municipalization,” Carr wrote. “The people of Boulder expect this from both of us.”
On Monday, Xcel sent letters to Boulder customers telling them that the future of Solar Rewards and other programs is “very unclear.” The letters also tell customers that the time for negotiating a new franchise agreement with Boulder has passed, and it points out that Boulder is moving forward with hiring outside lawyers to take the issue to court.
City officials have said that outside counsel is necessary to navigate the court systems and agencies that will give Boulder a clearer idea of what it would cost to buy Xcel’s local infrastructure.
On Tuesday, officials from Boulder and Xcel met to discuss the issues surrounding the utility’s discretionary programs.
“Lawyers for the city and Xcel held a very preliminary meeting and had a productive discussion, with both sides outlining their position and the challenges,” said Boulder spokeswoman Sarah Huntley. “And there’s some additional work that is going to be done on both sides.”
Former Boulder city councilman Steve Pomerance, who has been closely following the municipalization issue, said he believes the programs under discussion between the city and Xcel shouldn’t be referred to as “discretionary” at all. those programs are paid for through riders on all customers’ electricity bills — including those in Boulder — and Boulder residents are still paying those fees.
“Xcel said that they wanted to cut Boulder off from any rebates in the future but conveniently forgot to offer to pay Boulder back for its contribution to these programs through the rates that Boulderites will still be paying,” Pomerance said in an email.
Boulder residents make up about 5 percent of Xcel’s annual sales in Colorado, but they account for 20 percent of Xcel’s rooftop installations and 7 percent of its energy-efficiency rebates.
“Boulder customers participate in these programs at a high level,” Eves said. “That’s a good thing for us, if they’re going to be our customers long-term. if they’re not, then the city is going to have to step up to these kinds of programs.”
Contact Camera Staff Writer Laura Snider at 303-473-1327 or firstname.lastname@example.org.