Thread by @shayshinecastle

After a brief and noisy break, we're back to talk muni. The city is done with the PUC process, having agreed with Xcel on the assets to be acquired *outside* substations. (Inside is still TBD, so not everything is done.)

Here's staff's presentation: www-static.bouldercolorado.gov/docs/Oct._10,_…

We're going over some background and "Why muni?" now.

Here's a good roundup of the votes taken on this so far:

Steve Catanach answering a question someone just asked me recently: Why does Longmont's utility boxes have art on them but not Boulder's?

Bc Longmont has their own utility, so they have that authority, apparently.

It saves the city $$ bc vandals don't generally tag other ppl's artwork, whereas they tag black boxes, which then has to be painted over.

Wait.. so the city can paint over graffiti but not paint art...? Confusing.

Catanach going over the benefits of local control.

Yates asking a q about local renewable generation. At 53MW today; "What about our current situation prevents us from" doing more?
Catanach: There are limits to Xcel programs that help buy down cost of solar panels.

Plus only a certain number of MW are allocated by Xcel for community solar gardens.

Jones: Everybody is limited to doing 120% of their usage. We're regulatorily limited.

Yates: So IBM wasn't exceeding that 120%? They have a lot of land to use but also a lot of need.

Yates asking about stranded costs; just wants to know if it's been calculated, "not looking for a number."

Catanach: We've had a lot of discussion but it's hard to calculate.

I wish I could define stranded costs for you. I knew once, but I lost it. I'm sorry.

I'm sure somebody could jump in and help me.

Boulder still working toward a final go/no-go vote in 2020 or 2021, with all the key costs, more detail on the operations and if the utility is a financially "viable thing to do or not," Catanach says.

Engineering progress is going well, Xcel and city's engineers are getting along, Catanach says. "The attorneys, not so much."

City is readying a Request for Proposals to "stand up" the utility (get it operational)

Update from Carr: PUC closed the case with Xcel and Boulder; has completed all conditions imposed in Sept. 2017

July 2015: Boulder district court said we had to go to PUC to approve separation of assets with Xcel before going to condemnation.

Final application in 2017, followed by 8-day trial. Order issued in Sept. 2017 with three orders to comply with.

Filed "final" agreement in Oct. 2018; Xcel withdrew in January of this year.

"We spent the last 10 months" negotiation with Xcel "trying to figure out why they objected."

PUC said this case is closed, we are done. "That removes the last barrier from the commission on us proceeding to condemnation of the assets."

Clapping from council and staff.

Carr: What this means, we are completely free to condemn assets OUTSIDE substations.

Assets inside substations have to be agreed upon still; through a federal process.

"We're hoping we can get to that agreement," Carr says, with Xcel.

Now decision is: condemn just outside substations or wait until everything is agreed upon and *then* condemn.

"We have final approval on vast majority of assets."

"We have no more PUC proceedings. They are simply happy to be done with us."

List of assets outside substations: over 1,000 pages
List of assets inside substations: couple hundred pages

Carr praising PUC's quick process on this "once they heard about delays."

Jones jokes that we'll throw them a party.

Jones: What's the timing? on condemnation decision.
Carr: We're "well along" in the process of agreeing on substation assets. Holdup is operations agreement.

"Who can go in where, touch what"
Even tho no substation will be co-located, but there's an operation agreement in place for one "mini" substation in town already with Xcel.

Transmission is "kind of regulated like the internet."

"They can't treat us different than any other customer."

"If we reach an impasse, there's a process we can go through which should not be very difficult."

2020 for go/no-go vote "is looking very unlikely now."

"I just don't think it's possible to get a condemnation done in the time needed to adequately inform voters."

RE: substation agreements. 3 of 6 have already been hashed out in terms of what the city is doing (I don't remember the details, sorry) Three others to be agreed upon. Carr says the disagreements have reached the point of "silliness."

Catanach talking about all the factors influencing costs of doing the muni that may make it too expensive.

Yates: Our last estimate of separation costs were $110M. Is that still your working number?

Catanach: 90% of design should be done by end of Nov. and we'll receive a 90% estimate. Xcel will have engineering costs of separation by May 1. So we'll have better number by then, and go out for bid.

Standup costs: Last estimate was $30M. We're doing RFP soon, so we'll have that cost sooner?
Catanach: If we'll have 2020 vote, yes. If 2021, later.

Carr touching on stranded costs: Deal feds made with providers: If someone departs your system, you have to let them use it, but they have to pay for any generation that you acquired in participation of serving them.

Stranded costs is ONLY generation costs and you ONLY owe it if you depart and continue to use the system. You can reduce your stranded costs by continuing to buy power from provider.

You can pay it in a lump sum OR over time with transmission costs. When ppl talk about it as a huge number, it's not a huge number all at once. It's a huge number paid over time.

Or it can be.

It looks more financially feasible to pay out stranded costs if we have to than to keep buying Xcel power, bc of the low cost of renewables.

Not only are we better off bc we'll have more renewables, but we save more $$ by paying out stranded costs over time through transmission costs.

Catanach going over the factors that impact stranded costs. How much can Xcel sell power we're not using for? When did we notify them?

Boulder contends it notified them with the first muni vote; Xcel contends it will be the go/no-go vote. "That will be contentious."

"Our strategy will really be to identify worst case" for the voters: The highest number possible.

Xcel does have an obligation to try and sell Boulder's power to someone else, another staff person says (missed her name, sorry)

Catanach: We've ID'd it as a risk, but it's not prudent for us to just come up with a number that's not based on anything.

Yates: I get that it can change month-to-month or year-to-year. I get that we can pay it over time. Procedurally, "do we anticipate having an estimate for stranded costs by go/no-go vote?"

"Our intent would be to identify the absolute worst case and that we are taking a conservative approach." (Catanach)

Brockett: If we generate more solar before we separate from Xcel, does that reduce our stranded costs bc it's power we're not using from them?
Yes, Catanach says.

Jones: Longmont and Fort Collins — both have municipal utilities — "are really preparing for the future and we're stuck in the slow lane."

That was RE: the California situation. cnn.com/us/live-news/p…

Morzel reading a statement from Weaver.

Still reading.

Still. (This email is public, so you can see it on Hotline.)

Ok that's over; now we're talking carbon offsets vs. RECs. REC is buying into a renewable energy credit; offsets are just paying to offset your carbon use.

Xcel's Windsource is buying into wind farms that "already exist out in the world" so you're not creating new renewable resources, Catanach says.

Catanach: We need to keep checking in to make sure this makes sense.

That was for the muni as a whole, btw. In response to a Yates q, but I missed it. Fading.

Jones: It's an important conversation to continue to have with the public. We're following the path that voters sent us on. I'm very heartened by today's actions at the PUC.

"It's no surprise that this process has been long and expensive. We knew Xcel was going to try and make it so, but it feels like we're making process here."

Still talking.

But basically this: Boulder won't stop advocating at the state level for change even if it goes ahead with a muni utility.

Carlisle: I really want to double underline that this is at the will of the voters that we're doing what we're doing now."

Finally know what Yates asked earlier that I missed: For another study session update for the new council next year.

That's all on muni. We're doing some scheduling stuff but I'll just put it in my newsletter.

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