Editor's note: This is the first story in a series that will check the accuracy of statements made by both sides of the debate over whether Boulder should break from Xcel Energy and form its own electric utility. In November, Boulder voters will be asked to weigh in on Issues 2B and 2C, which would give the City Council the go ahead to begin the process of municipalizing.
The claims: The Boulder Smart Energy Coalition claims that voting for 2B and 2C will result in less renewable energy, while Citizens for Boulder's Clean Energy Future say a municipal electric utility could reduce carbon emissions by 60 percent.
The facts: When consultants for the city first presented their "feasibility study" for creating a municipal utility to the City Council on June 14 (http://1.usa.gov/nnRRBr), the report assumed that the city of Boulder would buy the electricity it needed (minus electricity produced by solar and the city's hydroelectric turbines) from the wholesale electricity market.
In this scenario, the consultants found that the city's electric rates would be slightly lower than Xcel's, but its fuel mix would be similar. Sixty percent of Xcel's energy now comes from coal and about 10 percent of its electricity in Colorado comes from renewable resources.
At City Council's meeting on Aug. 16, staffers presented three additional scenarios and their effects on future electricity rates (http://1.usa.gov/oRh9Nl). In the first, city consultants assume that the city buys electricity from natural gas generation instead of electricity from the wholesale market and they assume that the city creates a solar incentive program that would bring the total amount of solar power in the city to 22 megawatts by 2020.
In that scenario, only 5 percent of the city's electricity would be renewable resources in 2020, and the rates would be about 7 percent lower than Xcel's projected rates. By comparison, about 30 percent of Xcel's Energy will come from renewable resources by 2020, as required by state law.
But because natural gas produces about 40 percent fewer carbon emissions than coal per unit of electricity, according to the Union of Concerned Scientists, the scenario reduced overall carbon emissions by about 24 percent.
In a second scenario, the city added 41 megawatts of wind to the natural gas and solar mix, which increased the percentage of renewable energy in 2020 to 11 percent and reduced emissions by 29 percent. The second scenario also put the rates at the same level as Xcel's projected future rates.
In a final scenario, the city added 53 more megawatts of solar to the 22 megawatts of solar in the other model runs, and they eliminated the wind. The result was that 10 percent of Boulder's electric supply would come from renewables and carbon emissions would be reduced by 28 percent. The rates under this scenario would also be the same as Xcel's projected future rates.
A volunteer citizen's group, now organized as Citizens for Boulder's Clean Energy Future, also used a model created at the National Renewable Energy Laboratory to independently look at how much renewable energy Boulder could bring on board and what that would do to rates.
The citizen model showed that Boulder could derive about 40 percent of its electricity from renewable sources and purchase the rest of its electricity from natural gas while keeping rates slightly lower than Xcel's. The model also showed that carbon emissions would be reduced under that scenario by more than 60 percent.
The rates listed here for both the city's model and the citizens' model assume that it will cost about $121 million for the city to acquire Xcel's local distribution system and that the city will not have to pay any "stranded costs" to cover investments that Xcel may have made in anticipation of continuing to serve Boulder.
Xcel argues that the real cost of acquisition will be much higher and that Boulder will owe more than $300 million in stranded costs.