Published on June 2nd, 2014 | by John Farrell1
Envisioning An Innovative Local Electric Utility
June 2nd, 2014 by John Farrell
Laboring to keep more of its energy dollars at home, community members in Boulder, CO, decided that they needed some numbers behind their vision of a cleaner energy utility. Listen in to hear Ken Regelson describe how the remarkable results of Boulder’s citizen-driven energy model have given them power to stand up to the incumbent electric monopoly with a vision for a 21st century clean energy system.
ILSR’s Director of Democratic Energy, John Farrell, interviewed Ken via Skype (apologies for the random construction noise) on Dec. 5, 2013.
A Remarkable Clean Energy Opportunity
The story of Boulder’s quest for a cleaner electricity system and its fight for local control are becoming legend. Listen to Episode 5 of Local Energy Rules to hear the story firsthand from Boulder’s former mayor, Susan Osborne. Ken’s tale begins mid-way, when the need for data became a paramount part of the local effort.
The results of Boulder’s new energy model are nothing short of transformational. The technical and financial model of a new energy system was projected to:
- Offer lower rates to residential, commercial and industrial customers, not just on “day one” but over a 20-year time frame;
- Maintain or exceed current levels of reliability, and future investments could enhance dependability;
- Reduce greenhouse gas emissions by more than 50 percent from current levels and exceed the Kyoto Protocol goals within the first year;
- Get 54 percent or more of its power from renewable resources, such as wind, hydro and solar;
- Create a model public utility that would allow for innovation in everything from energy efficiency to customer service.The energy model allowed the citizens of Boulder to “tell a story to the public about an electric utility that could be very innovative into the future.”
In late 2010, the grassroots advocates of a cleaner energy future in Boulder were tired of getting rolled by Xcel Energy at the state’s Public Utilities Commission. The utility would show up, and in response to the city’s request for more clean power development, respond with, “our model says…we can only do this much renewables.”
Ken and others formed a team of 20 or more individuals to create an alternative model. The key was a modeling software tool called HOMER energy system, and it allowed the citizen-led effort to offer a credible alternative to Xcel’s intransigence.
“You want to be credible when you stand up in front of a group of people…when you stand up and show a graph and you say ‘our modeling shows that based on these assumptions we can do 50% renewables at rate parity with Xcel.’ Then you have a very different discussion with people.”
Is Their Energy Model Good?
At this point, it’s not just a citizen-driven effort. The city of Boulder has invested its own resources in making the model more robust: challenging assumptions, refining numbers, etc. They’ve had the original volunteers, but also experts like retired electrical engineers and former commissioners from the Public Utilities Commission.
The city also hired a third-party, independent reviewer – Gregory Booth – to review the legal, technical, and other aspects of Boulder’s model. In his words: “I’ve never seen anyone do an acquisition study in such detail and with as many components as Boulder has. I have performed $1 billion of worth of successful acquisition projects and I promise you that those models didn’t come anywhere near the level of study and risk assessment as Boulder does.
“Put another way,” says Regelson, “Boulder gets an A+ on their modeling efforts.”
Can Other Cities Do It?
We knew that if this only happened in Boulder it wouldn’t be enough, says Regelson, and that fighting climate change would be more. That’s why they heavily documented their assumptions and their modeling process so that other cities could follow in their footsteps.
The other lesson, the key issue of modeling is that we can do a lot of renewables, but it’s the end of baseload power plants.
“Yeah, we have some bright people. But every time I talk to other places, to other cities – I have talked to people in Santa Fe and Minneapolis both – I’m incredibly impressed by how much people know about these topics already, things that we didn’t know when we started.”
Is a Good Model Enough to Win?
Boulder has already had three political votes that have ratified their interest in a cleaner utility future. In 2010, voters agreed to replace the franchise fee revenue from Xcel Energy with a utility “occupation tax,” basically just a different name for the same revenue, to allow the city to study municipalization.
In 2011, the citizens voted to authorize the city to proceed with municipalization, if it could meet benchmarks for renewable energy and cost-effectiveness. Again they won, even though Xcel outspent them 10-to-1 in the campaign.
And in 2013, Xcel Energy paid petitioners to put a measure on the ballot to kill municipalization. Again the city and its citizens won, this time with 69% of the vote, even though Xcel outspent them 3 to 1.
What’s the secret? Ken explains, “If you can tell a good enough story, not just a technical story…a financial story…of how a city can run a utility and do very well at it.”
“Most cities run their own water utility and do extremely well. Why is an electric utility any different?”
This is the 15th edition of Local Energy Rules, an ILSR podcast with Senior Researcher John Farrell that shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion. Other than his immediate family, the audience is primarily researchers, grassroots organizers, and grasstops policy wonks who want vivid examples of how local renewable energy can power local economies.
Photo Credit: Zane Selvans
Thanks to ILSR intern Jake Rounds for his audio editing of this podcast.