10/18/2010 11:21 am ET | Updated May 25, 2011

Boulder's 2B Means Progress Toward Clean Energy

In mountaineering there's a land feature known as a saddle -- a high ridge between two or more peaks from which a climber can study options for ascent or descent. The saddle is not a destination but rather a strategic place for planning. It's worth the energy spent in reaching, especially if the route or conditions are uncertain.

That's what Yes on 2B offers Boulder. It allows the City of Boulder to investigate real plans for its energy future and report back to voters in the next year or more. 2B is not an energy plan, but a mechanism to let the city have stable funding while being legally separate from Xcel Energy and its annual franchise fee amounting to about $4 million. 2B is therefore dubbed the "replacement tax."

Here is how two City Councilors put it in the Daily Camera:

2B has the unanimous support of city council and its passage is critical. Simply put, if it fails the city will need to cut its General Fund budget by over $4 million per year. That will significantly reduce support for a wide variety of essential services, including police, human services, libraries, parks and recreation, and open space.

To help clarify some misconceptions about Issue 2B, here is what it will not do:

2B will not affect Xcel`s provision of energy to Boulder customers in any way

2B will not change your relationship with Xcel as your energy provider

2B will not raise additional revenue for the city

2B is technically a new tax, but it will not cost you extra money

2B does not, in any way, imply support for replacing Xcel as the city`s energy provider

2B does not, in any way, affect your control, as a voter, over the ultimate decision about how Boulder will meet its future energy needs.

This "replacement of the franchise fee" could seem confusing, since a franchise fee itself is a strange creature. Why would any utility pay a city so much money rather than merely lower its utility bills? The tradition of franchise fees started as an inducement for the long term contract while giving the utility access to city property (like a lease). It was first paid out of the utility's earnings. Now utilities often collect and remit the fee directly from ratepayers. It's as if Xcel has morphed into being a taxing authority for the City, and this status will last to the end of this year when the franchise expires. 2B replaces that funding, allowing the city to provide familiar services with stable funding while exploring options for getting Boulder to a very high proportion of clean energy in the next several years.

There's no reason to assume that Boulder should hang tight with Xcel Energy and wait for its supposedly excellent plans for decarbonization to pay off -- for in fact many challenges have come against the coal plant retirement plan known as HB 1365 or the Clean Air-Clean Jobs Act. Xcel has recently stated that fulfilling its own proposal to retire up to 900 megawatts of coal capacity will risk reliability and unreasonable cost impacts on customers. The state's health department has stated that Xcel's plan cannot meet the air improvement requirements of law.

On top of that, this week, the Colorado Mining Association filed a motion to block two of three Public Utilities commissioners from ruling on the $1.3 billion plan to close several coal plants. The charge is that Chairman Ron Binz and Matt Baker are embroiled in conflict of interest having clearly negotiated with Xcel Energy on the framework for cost recovery for the utility's plan to replace coal capacity with natural gas turbines. "The Commissioners have breached their duty to the people of Colorado by making a private deal with Xcel Energy (PSCo) to allow it to 'spend itself rich,'" the motion alleges.

Xcel Energy defends its involvement by explaining that such negotiation is business as usual. But this time they're not saying it to powerless citizen intervenors, they're saying it to a major industry in the state.

So the legal challenge may devolve into a battle of the titans with limitless legal resources (Xcel's being paid for by ratepayers), and it could drag on.

Therefore it is truly fortuitous that Boulder's City Council chose not to renew its franchise agreement with Xcel, and can explore options for becoming a municipal utility or compelling Xcel to assist with legislative restraints and create for Boulder a unique business arrangement, such as it does with numerous major buyers in the state.

Boulder has the company of many communities that are breaking away from business as usual for their energy supply. Marin County in California fought its state's mega-utility, PG&E, to retain its right to form its own utility and now is the nation's first to derive 75 percent of its energy from renewable sources, with rates lower than those charged for natural gas. Winterpark, Florida, broke loose of its investor-owned utility through a five year process strongly supported by voters, resulting in higher reliability. Gainesville, Florida and Ontario, Canada have instituted guaranteed rates to buy renewable power, causing rapid installation at low rates.

These visions could be possible for Boulder, and they can be explored and vetted with no change in utility rates and no change in city services either, should 2B get passed by the voters. It's a good to get to a secure place where options can be thoroughly explored. Vote yes on 2B.

A version of this column appeared in the Boulder Daily Camera