Why Boulder Voted to Abandon Xcel Energy In Favor of City-Owned Power Utility

Search form

Why Boulder Voted to Abandon Xcel Energy In Favor of City-Owned Power Utility

Why Boulder Voted to Abandon Xcel Energy In Favor of City-Owned Power Utility
Tue, 12/17/2013 - by Bob Massie
This article originally appeared on Cognoscenti

In a ground-breaking move in November, voters in Boulder, Colo., approved an initiative to end their relationship with Xcel Energy, a utility with $10.7 billion in revenues, thus clearing the way for the city to form its own municipal utility that would lower rates and make greater use of renewable energy.

Opponents of the effort had themselves put the question on the ballot in order to block measures by the city council. They also tried through a second initiative to hamstring the city from issuing enough bonds to be able to afford the purchase of Xcel’s facilities.

During the fierce battle that attracted national attention, corporate executives and their allies argued that the city had neither the money nor the expertise to manage such a complex enterprise.

Advocates for the municipal utility, including New Era Colorado Foundation, fought back with a crowd-funding campaign that raised more than three times their financial goal. In a landslide, two-thirds of voters supported the idea of bringing the utility under public control and then rejected the borrowing limits designed to kill the deal by a similar margin.

Though the utility industry has gone through a wave of consolidation over the last two decades, they are starting to show the strains of technological, economic and political change.

Municipal utilities are far more common than most people are aware, with more than 1,000 already functioning in the United States, serving 50 million customers, a population greater than the size of Spain. Most of these entities are owned by cities, and controlled by panels of local citizens. Some are even cooperatives owned by their members.

Proponents of change, not only in Boulder but around the country, have argued that public control creates three vital benefits.

First, decisions are made not by distant corporate managers whose first priority is to generate returns for absentee shareholders or to pay enormous salaries for executives, but by managers who are accountable to the community.

Second, because of this, municipal utilities can focus on important local goals, such as investing in renewable energy, efficiency, and other factors that increase community resilience.

And finally, the rates of municipal utilities are traditionally lower than their counterparts, and they channel any financial surplus—also known as profit—back into the community.

All of this comes at a time when the entire model of a corporate utility operating a centralized grid is facing steady erosion. Universities and cities across the country are expressing their desire to move away from both hiring—or even owning stocks in—companies that remain committed to fossil fuels.

In addition, every family who installs solar on their roof not only slashes their need for energy from a utility, but also cuts the revenue for those same firms.

As the number of customers inexorably drops, the firm must spread its costs across a smaller and smaller number of customers, which increases their rates and creates even more demand to leave the grid.

This long-term shift has caught the attention of both the U.S. Department of Energy, which supports it, but also the Edison Institute, the industry association of large utilities, which warned in January 2013 that the entire energy industry may follow the path of the phone companies, which struggled to maintain a vast system of land-lines even as customers flooded to widely distributed cell phones.

As the price of solar energy steadily comes down—and as oil continues to rise—the transformation of America’s energy economy is underway.

The critical question for those who want to see America shift to a new economy that is just and sustainable for people and the planet is whether the technological shift from a centralized fossil-fuel grid will be matched by a smaller shift from centralized, large-scale corporations to democratic control.

If this happens, with cities like Boulder leading the way, the energy, the dollars, and the decisions about the future will move into the hands of local communities, which would free more Americans to take the transformative steps we both want and need.

Bob Massie is president and CEO of the New Economics Institute.

ORIGINALLY PUBLISHED BY Cognoscenti

Article Tabs

Deutsche Bank, Libor, Georgina Philippou, Barclays

The penalties on Germany’s largest bank also involve a guilty plea to the Department of Justice.

Edward Snowden, whistleblowers, NSA surveillance programs, American Civil Liberties Union, Reform Government Surveillance coalition, Patriot Act

According to a worldwide poll, a large and important segment of global society sees Edward Snowden as hero and whistleblower — and its members are the future.

police killings, police brutality, Freddie Gray

Outrage over the police killing of 25-year-old Freddie Gray in Baltimore continued on Thursday after hundreds demonstrated in front of the Western District police station where Gray was taken following his arrest on April 12.

This Earth Day, an apology to future generations from Prince Ea.

Trans-Pacific Partnership, TPP, fast track authority, Bernie Sanders, wealth inequality, income inequality, populist candidate, money in politics, Citizens United

Whether or not this opponent of the billionaire class, corporate greed, Wall Street and environmental degradation – and this champion of working people, the unemployed, retirees, and student debtors – is our next president will be entirely up to us.

The number of homeless children has grown by 60 percent in the past six years.

Posted 6 days 4 hours ago

“We are convinced that the entire public interest is at stake, whether water, energy, health, and public transport – the communities are largely deprived of their ability to act."

Posted 5 days 4 hours ago
Danish wind power, Danish renewables movement, wind power technology

Wind power in Denmark has created tens of thousands of jobs, yet it's still facing stiff opposition from corporations and politicians.

Posted 4 days 4 hours ago
99%, occupy, OWS

What happened to Occupy should serve as a warning to everyone about the dangerous fusion of corporate interests and our public institutions.

Posted 4 days 4 hours ago
fast track legislation, fast track authority, Trans-Pacific Partnership, TPP, Bernie Sanders, corporate trade deal

This job-killing trade deal has been negotiated in secret, drafted with input by special interests and corporate lobbyists but not from the American people.

Posted 2 days 23 hours ago
Danish wind power, Danish renewables movement, wind power technology

Wind power in Denmark has created tens of thousands of jobs, yet it's still facing stiff opposition from corporations and politicians.

From student debt to climate change, and from fair pay to gun control, young people are seeing the issues that affect them most lose out to the interests of rich corporations and the super wealthy whose power shapes Congress.

World Bank policies, World Bank evictions, economic displacement

Since 2004, an estimated 3.4 million people have been forced from their homes, deprived of their land or had their livelihoods damaged because they lived in the path of a World Bank project.

killed environmentalists, climate talks, carbon emissions

Artificial, self-important UN summits could not be further from the frontline of protest, where environmentalists are being killed at an alarming rate.

FBI, Innocence Project

The Justice Department and FBI have formally acknowledged that nearly every examiner in an elite FBI forensic unit gave flawed testimony in almost all trials in which they offered evidence against criminal defendants over more than a two-decade period before 2000.

Sign Up